Background
The Kyneton Airfield is located at 1503 Kyneton-Metcalfe Road in Kyneton on Council-owned land. The Airfield currently includes 34 hangars and typically houses about 60 aircraft.
All hangars are privately owned and constructed on Council land; for leasing purposes these are known as ground leases. A ground lease is a lease of the land component only, with the tenant responsible for the construction or installation of buildings and any ongoing maintenance or works related to them.
There are 33 hangar leases with 29 currently in ‘overholding’, or a month-to-month tenancy, as the previous leases have reached the end of their term. Three remaining leases have 12 months left on their lease term, and one hangar was constructed about 3 years ago, and the proposed new lease is the first to be negotiated for this site.
Historically, the lease terms for airfield hangars have varied significantly depending on when the lease commenced, including different rental fees, with variations depending on a variety of negotiated inputs, including (but not limited to) the age, the size applied to the hangars and whether the leases had fixed percentage or CPI-based annual rental increases.
To ensure consistency, equity and transparency going forward for all hangar owners, Council is implementing a standard lease, including like terms and the same rental rate on a per-square-metre basis for all hangar site leases, regardless of previous arrangements. These terms are proposed consistent with Council’s recently updated Lease and Licence Policy. Council has recently independently surveyed the Airfield site to confirm the sizes of each hangar for the purposes of calculating the rental amounts for each proposed hangar lease.
Each lease is proposed for a term of 10 years, with an option for a further 10 years included. This provides certainty for hangar owners who have invested in capital infrastructure of their hangars, flexibility for those who may wish for a shorter-term engagement, and increased efficiency for Council in the management and renewal of the leases. The proposed length of lease terms proposed triggers the community engagement process under the Local Government Acts 2020 and 1989 and Council’s Lease and Licence Policy.
A summary of the key lease terms proposed for consultation are as follows:
| Item | Details |
| Site | Kyneton Airfield - 33 Hangar Sites |
| Lease Type | Ground Lease (land only) |
| Use | Private aircraft hangars (aviation infrastructure) |
| Proposed Term | 10 years + 10 year option |
| Rental Assessment | Market rental determined by registered valuer |
| Community Consultation | Required under Local Government Act 2020 s115(4) - open for submissions from 24 July to 21 August 2025 |
| Maintenance Responsibility | Tenant (full responsibility for building maintenance and insurance) |
| Outgoings | Commercial terms apply – all costs borne by tenant |
| Capital Contribution | Tenants have funded and constructed their own hangars |
| Council Role | Landlord only (no ongoing maintenance obligations) - retention of some liability as landlord |
