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Long term Medical tenant

Our client wanted help to secure an off-market property and after looking at a number of them, this asset was for them. It was a high yielding sub $2m freestanding medical asset. Properties like this are rarely seen at yields over 5%. This one was secured at 6.71%. We like this property because this medical commercial asset has a long-established medical specialist tenant having occupied the site since 2009. This site has dual street access and great retail exposure, with a glass shop front. Better yet, this is a freestanding asset.

Purchase Details
Asking Price
1600000
Purchase Price
1475000
Deposit (assuming
70
% debt)
442500
Stamp Duty
70500
Building Report*
800
Solicitor Cost*
4000
Valuation*
2500
Other Costs*
Other Fees* (Depreciation
report, bank fees)
1600000
Total Cash Required
520300
Purchase Price + Purchasing Cost
1552800
Net Annual Cash Flow Return
99000
Net Yield on Property
6.71
%
Net Yield Accounting for
Purchasing Costs
6.38
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
520300
Cost of Loan
(Assume
3
% pa on
70
% debt)
30975
Return of Equity
(Pure cash flow return)
13.07
%
Return of Equity with a
5% Capital Growth Rate:
27.25
%
Return of Equity with a
7% Capital Growth Rate:
32.92
%
Return of Equity
10% Capital Growth Rate:
41.42
%
*approximate number

Key Highlights

• Building Area: 275m2

• Land Area: 400m2

• $99,000 + GST + tenants pay outgoings

• 7 consulting rooms, Theatre Room, Reception Area and Staff kitchenette

• Prominent corner positioning

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