Clean and tidy Perth industrial asset

This was our client’s first commercial property. They were looking for a clean and tidy industrial asset with a decent yield. After viewing a few different assets Rethink Investing presented them, they landed on this property which is located in Perth.

It was a fairly straightforward process throughout due-diligence as the tenants were paying on time, the building report was near perfect and all the legalities of the leases and the building passed with flying colours. The client is now on the hunt for their second commercial asset through Rethink Investing.

Key Highlights

  • Building Area: 1521m2
  • NLA: 2,400m2
  • Concrete tilt panel construction
  • $144,334 net return (Lot 1 $75,334 + Lot 2 $69,000)
  • Container height roller door
Purchase Details
Asking Price
$2,250,000
Purchase Price
$2,150,000
Deposit (assuming 70 % debt)
$645,000
Stamp Duty
$102,000
Building Report*
$500
Solicitor Cost*
$5,500
Valuation*
$2,500
Total Cash Required
$755,500
Purchase Price + Purchasing Cost
$2,260,500
Net Annual Cash Flow Return
$144,334
Net Yield on Property
6.71 %
Net Yield Accounting for Purchasing Costs
6.39 %
Cash-On-Cash Returns
Deposit Needed = % + Costs
$755,500
Cost of Loan (Assume 3 % pa on 70 % debt)
$45,150
Return of Equity (Pure cash flow return)
13.13 %
Return of Equity with a 5% Capital Growth Rate:
27.36 %
Return of Equity with a 7% Capital Growth Rate:
33.05 %
Return of Equity 10% Capital Growth Rate:
41.59 %

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