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Purchased
Large industrial complex with international tenant
Our valued client was only looking for off-market freehold industrial assets in a metro market. There was also a need to have a minimum WALE of 3 years to help with lending. This was a tough task in a hot market but we managed to use our superior industry contacts to secure this premium asset off-market. We purchased at a near 7% net yield in a market where 6% was difficult to achieve. Due to this strong purchasing our client should already have equity built up from day one.
Purchase Details
Asking Price
2900000
Purchase Price
2675000
Deposit (assuming
70
% debt)
802500
Stamp Duty
143977
Building Report*
750
Solicitor Cost*
2000
Valuation*
4000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
2900000
Total Cash Required
953227.5
Purchase Price + Purchasing Cost
2825727.5
Net Annual Cash Flow Return
182000
Net Yield on Property
6.8
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.44
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
953227.5
Cost of Loan
(Assume
3
% pa on
70
% debt)
56175
Return of Equity
(Pure cash flow return)
13.2
%
Return of Equity with a
5% Capital Growth Rate:
27.23
%
Return of Equity with a
7% Capital Growth Rate:
32.84
%
Return of Equity
10% Capital Growth Rate:
41.26
%
*approximate number
Key Highlights
• Building Area: 2,185sqm
• Land Area: 4590m2
• $182,000 pa + GST + Outgoings
• Long standing tenant since early 2000
• Secure asset with 6-month bank guarantee
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