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Purchased
Freehold shopping centre!
This is our client’s 2nd property with Rethink Investing. The client was targeting off-market shopping centres, one of our specialties. We found this high-yielding asset for them, which resulted in us purchasing without competition. We also negotiated rental guarantees for two vacancies which significantly reduced the risk of this asset.
Purchase Details
Asking Price
4400000
Purchase Price
4100000
Deposit (assuming
65
% debt)
1435000
Stamp Duty
232066.9
Building Report*
2000
Solicitor Cost*
9000
Valuation*
4000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
4400000
Total Cash Required
1682066.9
Purchase Price + Purchasing Cost
4347066.9
Net Annual Cash Flow Return
287512
Net Yield on Property
7.01
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.61
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
1682066.9
Cost of Loan
(Assume
4.5
% pa on
65
% debt)
119925
Return of Equity
(Pure cash flow return)
9.96
%
Return of Equity with a
5% Capital Growth Rate:
22.15
%
Return of Equity with a
7% Capital Growth Rate:
27.03
%
Return of Equity
10% Capital Growth Rate:
34.34
%
*approximate number
Key Highlights
• Building Area: 1,228m2
• NLA: 6,420m2
• 11 tenants with the Spar and Liquorland tenancies underwriting almost 50% of the income stream
• Annual income: $287,512pa + outs + GST
• Asking price = $4.4 million (Negotiated price = $4.1 million with 5-year rental guarantees)
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