For the purposes of market rent review under s 37(2) of the Retail Leases Act 2003 (Vic), where a lease permits gaming as a use, the valuer is required to assume that the hypothetical tenant has access to the existing premises approval for gaming and gaming machine entitlements; these are treated as attributes of the premises rather than personal rights of the sitting tenant. The profits method of rental valuation (using EBITDAR ratios) remains a valid methodology for gaming venues, provided it is applied by reference to a competent operator of average efficiency. However, [name withheld]'s dissent raises significant questions about whether the profits method can be applied where the assumptions about the availability of regulatory approvals to a replacement tenant are untested against market reality. The question of whether a premises approval holder can surrender the approval without the owner's consent remains unresolved and Parliament has been invited to clarify the position.
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