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Purchased
NSW Office Asset | $1,250,000 | Net Yield: 6.81%
Prime, newly renovated office investment less than one kilometre from the CBD, offering approximately 385 m² of net lettable area and fully leased to a national consultancy on a three-year term commencing February 2025. This is a set-and-forget asset delivering immediate income security, professional covenant strength and day-one presentation within an irreplaceable near-CBD position that will continue to benefit from strong tenant demand and connectivity.
Key Highlights
- Starting Net Yield: 6.33% in year 1 or greater than 6.5% after-tax including depreciation deductions. Projected to increase to 7.42% in FY27-28 following a market rent review on lease expiry
- Net Year 1 Passive Cashflow: ~$20,000 p.a. after mortgage costs (assumes 70% LVR, 6.75% interest rate on lending)
- Rental Upside: Currently under rented by $20-$30/m² presenting an opportunity to raise rents to market and realise a ~$120,000 equity uplift (10%) at the next market rent review in January 2028
- Modern Fit-Out: Newly renovated office that is professional, functional and suitable for a range of businesses and government departments
- A Clean Set and Forget Asset: Minimal ongoing maintenance and capital expenditure required following recent renovation
- Rental Income: ~$79,000 p.a. net of outgoings, land tax and property management costs with CPI annual increases ensuring long-term, stable returns
- Lease Term: Tenant recently signed a new 3-year lease in February 2025 (2 years, 7 months remaining) offering stability
- Building Area: 385m² (47.5% site coverage)
- Total Land Area: 810m² with a value of $374,000 (30% of purchase price) underpinning value
Purchase Details
Asking Price
Purchase Price
1250000
Deposit (assuming
35
% debt)
437500
Stamp Duty
Nil
50762
Building Report*
2000
Solicitor Cost*
5500
Valuation*
2000
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
23750
Total Cash Required
521512
Purchase Price + Purchasing Cost
1334012
Net Annual Cash Flow Return
85093
Net Yield on Property
6.81
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.38
%
Cash-On-Cash Returns
Deposit Needed =
% + Costs
521512
CASH FLOW AFTER
MORTGAGE COSTS
MORTGAGE COSTS
36343
Cost of Loan
(Assume
6
% pa on
35
% debt)
48750
Return of Equity
(Pure cash flow return)
6.97
%
Return of Equity with a
5% Capital Growth Rate:
18.95
%
Return of Equity with a
7% Capital Growth Rate:
23.75
%
Return of Equity
10% Capital Growth Rate:
30.94
%
*approximate numbers
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