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Shopping Centre Investment Property with 7.31% Net Yield

Our client was looking for a high-yielding shopping centre. While this purchase took six months to complete, this large asset was one of the highest-yielding ones we could find in the metro capital city location. Sitting on 14,459m2 of prime land, this fully leased, modern mixed-use, commercial and retail centre was secured 100% off-market.

Initially, we were only going to purchase two of the buildings in this asset, but that later spread over to acquiring the third building. This additional purchase brought the total tenant count from 13 to 23 tenants and over $1.4 million in income per annum.

Purchase Details
Asking Price
21000000
Purchase Price
19500000
Deposit (assuming
65
% debt)
6825000
Stamp Duty
999618
Building Report*
3900
Solicitor Cost*
18000
Valuation*
11000
Other Fees* (Depreciation
report, bank fees)
Total Cash Required
7857518
Purchase Price + Purchasing Cost
20532518
Net Annual Cash Flow Return
1424570
Net Yield on Property
7.31
%
Net Yield Accounting for
Purchasing Costs
6.94
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
7857518
Cost of Loan
(Assume
5
% pa on
65
% debt)
633750
Return of Equity
(Pure cash flow return)
10.06
%
Return of Equity with a
5% Capital Growth Rate:
22.47
%
Return of Equity with a
7% Capital Growth Rate:
27.44
%
Return of Equity
10% Capital Growth Rate:
34.88
%
*approximate number

Key Highlights

• Building Area: 14,459m2

• NLA: 14,459m2

• $1,424,570 net income

• Significant land holding of 14,459m2

• High exposure with 22,000 vehicles per day

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