Recent FIRB changes a big win for many foreign tenants

The Foreign Investment Review Board (FIRB) has reinstated the normal monetary thresholds for the renewal or extension of leases for non-sensitive developed commercial land. This is a big win for many foreign owned tenants who wish to renew or rollover an existing property lease of commercial premises.

Until recently, commercial property leases of five years or more (including any option for a lease extension) triggered the requirement for FIRB approval. This led to significant delays as the FIRB statutory decision period was extended from 30 days to six months and leasing deals with foreign entities often left in a state of flux. Tenants were concerned about the risk of entering into a new lease and fitting out the premises without FIRB approval whereas landlords were unable to collect rent from the premises. This situation has no doubt been challenging for many businesses already suffering the impact and commercial disruption from the COVID-19 global pandemic.

For a foreign government investor, the monetary threshold for a lease interest in non-sensitive developed commercial land continues to be $0.

We expect the reinstatement of the normal monetary thresholds for eligible commercial leasing transactions will act as a green light for many leasing deals that have otherwise been put on hold.