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Modern retail centre

We helped our client secure and complete all the due diligence on this modern retail centre. The asset incorporates three (3) national and chain brand tenancies including Supercheap Auto, Prices Plus and Domino’s Pizza plus an Amazon storage locker. The centre features a strong lease expiry profile (WALE) of over 5 years by income with all tenants secured on net leases. This is our valued client’s first purchase with Rethink Investing.

They are successful businessmen who are looking to set up a passive income independent of their business. Their requirements were to target low-risk and high-quality commercial properties that would produce strong rental growth over time. This asset ticked all the boxes.

Purchase Details
Asking Price
9500000
Purchase Price
9000000
Deposit (assuming
70
% debt)
2700000
Stamp Duty
531053
Building Report*
1000
Solicitor Cost*
9500
Valuation*
4500
Other Costs*
Other Fees* (Depreciation
report, bank fees)
9500000
Total Cash Required
3246053
Purchase Price + Purchasing Cost
9546053
Net Annual Cash Flow Return
497160
Net Yield on Property
5.52
%
Net Yield Accounting for
Purchasing Costs
5.21
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
3246053
Cost of Loan
(Assume
3
% pa on
70
% debt)
227223.72
Return of Equity
(Pure cash flow return)
9.49
%
Return of Equity with a
5% Capital Growth Rate:
23.36
%
Return of Equity with a
7% Capital Growth Rate:
28.9
%
Return of Equity
10% Capital Growth Rate:
37.22
%
*approximate number

Key Highlights

• Building Area: 1,545m2

• NLA: 5,914m2

• 100% leased investment, all being national and chain traders – Supercheap Auto (300+ stores); Prices Plus (30+ stores) Domino’s (860+ stores)

• Very strong rental growth build into leases (CPI+1.5% annually)

• Strong lease profile (WALE) – The centre features a WALE of 5.1^ years by income

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