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Purchased
2014 constructed industrial warehouse!
Our client was buying in a partnership and was looking for a low-risk investment play. As a result, they focused on an industrial property with a strong lease. This asset was perfect as it came with an impressive 10-year lease. There should be some good capital growth for this asset due to the swiftly tightening industrial market in the area.
Key Highlights
• Building Area: 1,200m2
• NLA: 1,832m2
• 10+3+3 year lease
• Includes 600m2 of modern freezer room space
• Total current net rent: $156,870 (after 100% of the outgoings)
Purchase Details
Asking Price
2800000
Purchase Price
2550000
Deposit (assuming
70
% debt)
765000
Stamp Duty
Nil
123303
Building Report*
900
Solicitor Cost*
8000
Valuation*
3500
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
Total Cash Required
900703
Purchase Price + Purchasing Cost
2685703
Net Annual Cash Flow Return
156870
Net Yield on Property
6.15
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
5.84
%
Cash-On-Cash Returns
Deposit Needed =
% + Costs
900703
CASH FLOW AFTER
MORTGAGE COSTS
MORTGAGE COSTS
Cost of Loan
(Assume
3
% pa on
70
% debt)
53550
Return of Equity
(Pure cash flow return)
11.47
%
Return of Equity with a
5% Capital Growth Rate:
25.63
%
Return of Equity with a
7% Capital Growth Rate:
31.29
%
Return of Equity
10% Capital Growth Rate:
39.78
%
*approximate numbers
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