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Purchased
Acquired for one of our clients – A rare 923 sqm freehold asset at this price point with an exceptional yield of 7.2%.
The client, a seasoned investor, looking to purchase their second commercial wanted a freehold asset with a high yield. The client knew this would be tough brief given the price point, however our acquisition team found a gem, the key was to make a quick decision and put the property under contract. An established baker, the tenant has just exercised the option of his lease expiring in July 2029.
Purchase Details
Asking Price
1520000
Purchase Price
1250000
Deposit (assuming
70
% debt)
345000
Stamp Duty
50341
Building Report*
1000
Solicitor Cost*
6500
Valuation*
2000
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
29034.5
Total Cash Required
433875.5
Purchase Price + Purchasing Cost
1238875.5
Net Annual Cash Flow Return
82992
Net Yield on Property
7.22
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.7
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
433875.5
Cost of Loan
(Assume
6.5
% pa on
70
% debt)
56875
Return of Equity
(Pure cash flow return)
7.07
%
Return of Equity with a
5% Capital Growth Rate:
20.32
%
Return of Equity with a
7% Capital Growth Rate:
25.62
%
Return of Equity
10% Capital Growth Rate:
33.57
%
*approximate number
Key Highlights
• 927sqm freehold• NLA 343sqm
• 14 car bays + overflow
• Net rent $82,992pa + Outgoings + GST
• Purchase Price $1,150,000• Established tenant
• Frontage to two streets• Future development site with beneficial access
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