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Purchased
2014 constructed industrial warehouse!
Our client was buying in a partnership and was looking for a low-risk investment play. As a result, they focused on an industrial property with a strong lease. This asset was perfect as it came with an impressive 10-year lease. There should be some good capital growth for this asset due to the swiftly tightening industrial market in the area.
Purchase Details
Asking Price
2800000
Purchase Price
2550000
Deposit (assuming
70
% debt)
765000
Stamp Duty
123303
Building Report*
900
Solicitor Cost*
8000
Valuation*
3500
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
2800000
Total Cash Required
900703
Purchase Price + Purchasing Cost
2685703
Net Annual Cash Flow Return
156870
Net Yield on Property
6.15
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
5.84
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
900703
Cost of Loan
(Assume
3
% pa on
70
% debt)
53550
Return of Equity
(Pure cash flow return)
11.47
%
Return of Equity with a
5% Capital Growth Rate:
25.63
%
Return of Equity with a
7% Capital Growth Rate:
31.29
%
Return of Equity
10% Capital Growth Rate:
39.78
%
*approximate number
Key Highlights
• Building Area: 1,200m2
• NLA: 1,832m2
• 10+3+3 year lease
• Includes 600m2 of modern freezer room space
• Total current net rent: $156,870 (after 100% of the outgoings)
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