Leasing

Leasing decisions can have significant long-term financial and operational implications. To support informed decision-making, entities should undertake robust financial analysis that considers the full costs, benefits and risks of available options. A cost-benefit analysis (CBA), supported by whole-of-life cost (WoLC) assessment, helps entities demonstrate value for money, meet Commonwealth Procurement Rules (CPRs) requirements and provide a transparent basis for lease investment decisions.

Entities should consider budget, funding and approval requirements early when planning for a new lease, lease extension or other significant leasing decision. See Informed decision-making and value for money for further guidance.

For more information on budgeting principles, funding arrangements, and related approval processes, see Informed decision-making and value for money.

The Public Governance, Performance and Accountability Act 2013 (PGPA Act), Commonwealth Procurement Rules (CPRs), and Commonwealth Property Management Framework (CPMF) all require value for money to be considered when making procurement decisions.

Leasing decisions must be supported by an appropriate CBA to verify a decision represents value for money and is consistent with the CPMF principle to undertake property management with integrity and appropriate accountability measures. A CBA should be proportionate to the scale and complexity of the required decision.

A detailed WoLC analysis is a key component of the CBA.

Entities are responsible for developing CBAs to support their property decisions and for confirming that the analysis is appropriate and accurate. Under the Property Services Coordinated Procurement Arrangements (PSCP Arrangements), PSPs can assist with developing these documents.

Under the PSCP Arrangements, PSPs are required to undertake financial analysis (a CBA), for each leased property option. Entities remain responsible for reviewing, validating and using this analysis to inform their decisions.

Guidance is available to help entities calculate WoLC and to inform the value for money decision. This guidance is available through PSPs or via the GovTEAMS Commonwealth Property Community.

The CPRs also provide information relevant to value for money considerations. The CPRs also include consideration of non-financial costs such as sustainability factors, in line with requirements of environmentally sustainable procurement policies.

Officials can seek assistance from their PSPs for their property costings.

A CBA is an assessment that compares the costs and benefits of feasible options to inform decision-making and demonstrate value for money. 

The CBA must include an assessment of local impacts as the assessment can help entities understand the broader impacts of office relocation. The assessment includes considering potential impacts on local economies, transport and logistics infrastructure, and social or community dynamics.

The scope and level of detail of the assessment should be commensurate with the scale, complexity and potential impacts of the proposed relocation. 

The detail of the local impact assessments for each option will correlate with any potential move being considered and will factor in the potential benefits of relocation as well as any potential negative outcomes at the existing property location.

Local impact assessments do not require the additional approval from the Minister for Finance, but entities may wish to inform their own Minister of potential relocations for their input.

For more information on CBA contact see the GovTEAM Commonwealth Property Community or contact propertyframework@property.finance.gov.au.

Lease Review Process

The Lease Review Process (LRP) is a two‑stage assurance process that supports robust and transparent decision‑making for leasing transactions. It allows lease transactions to be appropriately planned and aligned with policy requirements before entering into binding agreements to support value for money outcomes.

The intent of the LRP is to provide opportunity for Finance and the Strategic Property Advisor (SPA) to work proactively with PSPs and entities at 2 distinct stages of the leasing transaction process:

• from the planning phase of a lease prior to formally approaching the market to ensure it is timely, robust, aligned with the CPMF, consistent with entity operational needs, and commercially sound, and
• prior to entering into a formal leasing contract with the landlord, after approaching the market.

Is the lease in scope?

In-scope leases for the lease review process are where the whole-of-life cost (WoLC) is more than $2 million, including options and GST.

The Minister of Finance determines the thresholds for leases requiring Finance support or Ministerial endorsement and may amend these settings or call in any transaction for review.

Minimising space

When undertaking lease planning and making leasing decisions, officials are encouraged to consider options to minimise office space. Options may include:

• assigning a lease to another Australian Government entity
• entering a Memorandum of Understanding (MoU) with another entity to share space
• disposing of a lease to a third party outside of the Australian Government.

Officials may find it helpful to work with their PSP to explore these options to confirm the right amount of space is used.

The Australian Government Property Register (AGPR) includes a Property Marketplace where officials can advertise or search for vacant Australian Government leased or owned office space. For access to the Property Marketplace, email propertydata@finance.gov.au.

Officials should consider whether entity accommodation needs can be met through existing Australian Government leased or owned office space before seeking new premises on the open market, where this aligns with business needs and broader strategic considerations.

For further information on leasing options, email propertyframework@property.finance.gov.au.

Sharing Australian Government properties

When sharing property, the primary objective is to maximise the efficient use of Australian Government office space and minimise surplus accommodation, rather than prioritising cost recovery between entities.

Where entities are considering a co-location arrangement, they should work together to choose the cost-sharing method that best suits the circumstances. For example, this could be based on a pass-through work point rate, a per-square-metre rate or market effective rent.

The agreed cost-sharing methodology forms the basis for an arrangement, with entities having flexibility to include add-on charges for additional access and services. Additional charges may be applied to reflect enhanced access, security or other services required by participating entities, including specialist security fit-outs and access to shared facilities such as meeting and conference rooms.

Regardless of the cost-sharing method chosen, entities should consider aligning any increases in shared accommodation costs with the head lease’s rent escalation rate and rent review arrangements.

Advertising or searching for vacant space

The Property Marketplace on the Australian Government Property Register (AGPR) and the Property Disposal Clearing House (Clearing House) can help officials in reducing surplus space by finding existing space to use or to advertise vacant space.

The Property Marketplace can be used to advertise surplus leased space (noting that advertisements can be broader than just surplus space) while the Clearing House supports testing of whether there is an alternative government use for Australian Government owned properties, prior to their disposal.

For information on surplus property criteria for Australian Government owned property see Commonwealth Property Disposal Policy (CPDP). Note that both the Clearing House and CPDP apply only to the disposal (sale) of property, not to leasing or ongoing property management.

Security considerations when sharing space

While the Protective Security Policy Framework (PSPF) permits co‑location where risks are appropriately assessed and managed, practical considerations may materially affect feasibility. In practice, co‑location is most viable where participating entities have broadly aligned security requirements, risk appetites and operational needs and:

• entities are willing to work collaboratively to agree to proportionate security, access and accommodation arrangements that meet their respective obligations
• participating entities recognise and accept the additional costs, constraints and operational complexities that may arise from shared occupancy, including security controls, fit‑out modifications, and ongoing operational requirements.

Entities should consider these factors early in planning discussions to ensure that cost, security, and operational risks are fully understood and appropriately managed. A Surplus Space Management Fact Sheet can be found on the GovTEAMS Commonwealth Property Community, with further resources coming soon.

Cost-sharing options

Entities acting as landlords, tenants or sub-tenants are expected to work collaboratively to reach mutually beneficial leasing or sub-leasing arrangements. These should be reflected in a formal MoU. Further guidance and co-location MoU templates can be found in the Commonwealth National Lease (CNL) suite. Accountable authorities should consider whole-of-Australian Government benefits in line with section 15(2) of the PGPA Act. An entity’s PSP can assist with identifying costs applicable to shared space arrangements.

Entities should also consider relevant capital funding and approval requirements where shared accommodation arrangements involve fit-outs, refurbishments or other capital works activities.

Information on pricing models for hosting and subleasing arrangements is available on the GovTEAMS Commonwealth Property Community.

The Commonwealth National Lease (CNL) suite contains a range of standardised documents, templates and supporting guidance to help officials with lease negotiations to make the leasing process more efficient. Officials should seek legal advice and consider relevant policy requirements before using the templates. The suite was last updated in September 2025.

The suite aims to:

• save time and reduce costs during lease negotiations
• provide landlords with a clear understanding of the Australian Government’s preferred leasing approach
• support consistent and effective leasing outcomes across the Australian Government
• help entities when sharing Australian Government properties.

The CNL suite of templates is available under Tools and templates in the right-hand menu.

Additional resources including templates to support the CNL, User Notes and MoU templates are available to government entities through the GovTEAMS Commonwealth Property Community.

Under the PSCP Arrangements, PSPs are responsible for delivering facilities management services as part of the Core Services offering.

Officials should engage with their relevant PSP for facilities management requirements. Information on the facilities management services available through PSPs, including service scope and delivery arrangements, is available on the PSCP Arrangements page and the GovTEAMS Commonwealth Property Community. 

The PSCP Arrangements provide Commonwealth entities with access to leasing and facilities management services through a whole-of-government procurement framework. The arrangements support value for money, consistent property management practices and the efficient delivery of property services across the Australian Government.

Officials should use the PSCP Arrangements when engaging for leasing and facilities management services and work with the SPA and relevant PSP throughout the property lifecycle. This includes support for property planning, market engagement, lease transactions, fit-outs, facilities management and property-related advice.

For more information on the roles of the SPA and PSPs, and how entities are expected to engage under the framework, see PSCP Arrangements.

The Property Marketplace can help officials in advertising their vacant space, and/or identifying vacant space that they can sublease or host from another entity.

For more information on emissions reduction, see Planning.

For more information on disposal of Australian Government property, including off-market sales, notification requirements and relevant legislative considerations, see Disposal.

For more information on property data reporting obligations, including AGPR data contributions, office and owned estate data collections and LAA reporting requirements, see Reporting.