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Entire blue-chip shopping centre

This is our valued client’s third commercial property purchased with us. As a result, they have built a passive income of over $1.5 million per annum in positive cash flow. Their first two properties were industrial assets, and they were keen to add a neighbourhood shopping centre to their portfolio. When we undertook our due diligence we uncovered several incomplete leases and discrepancies in the numbers, which, whilst these issues didn’t affect the quality of the asset, we took the opportunity to use them as leverage to secure a strong lease and negotiate an exceptional price for our client.

Purchase Details
Asking Price
10700000
Purchase Price
10000000
Deposit (assuming
70
% debt)
3000000
Stamp Duty
592249
Building Report*
900
Solicitor Cost*
5500
Valuation*
3000
Other Fees* (Depreciation
report, bank fees)
Total Cash Required
3601649
Purchase Price + Purchasing Cost
10601649
Net Annual Cash Flow Return
700000
Net Yield on Property
7
%
Net Yield Accounting for
Purchasing Costs
6.6
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
3601649
Cost of Loan
(Assume
3
% pa on
70
% debt)
210000
Return of Equity
(Pure cash flow return)
14.58
%
Return of Equity with a
5% Capital Growth Rate:
28.46
%
Return of Equity with a
7% Capital Growth Rate:
34.01
%
Return of Equity
10% Capital Growth Rate:
42.34
%
*approximate number

Key Highlights

• Building Area: 1,371m2

• Land Area: 4,800m2

• $700,000 pa + GST + Outgoings

• Centre comprises 15 tenants

• High Growth Corridor

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