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Purchased
Passive investment with a long lease featuring a high class tenant
Representing a board of directors, our task was to find a tenanted commercial investment, with a very long lease and a solid cash-flow. This property was perfect for their needs as it represents a near perfect passive investment which will require little involvement due to the ten year lease and the high class tenant.
Purchase Details
Asking Price
7500000
Purchase Price
7300000
Deposit (assuming
70
% debt)
2190000
Stamp Duty
331000
Building Report*
1000
Solicitor Cost*
5500
Valuation*
3000
Other Costs*
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
7500000
Total Cash Required
2530500
Purchase Price + Purchasing Cost
7640500
Net Annual Cash Flow Return
448000
Net Yield on Property
6.14
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
5.86
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
2530500
Cost of Loan
(Assume
3
% pa on
70
% debt)
127750
Return of Equity
(Pure cash flow return)
12.66
%
Return of Equity with a
5% Capital Growth Rate:
27.08
%
Return of Equity with a
7% Capital Growth Rate:
32.85
%
Return of Equity
10% Capital Growth Rate:
41.5
%
*approximate number
Key Highlights
• Building Area: 940m2
• Land Area: 998m2
• Annual Net Rental: $448,000 p/a
• 10 year lease + options
• There are 24 car spaces on the title included in the lease
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