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Off-market supermarket investment

The asset is a strong-performing supermarket with a rare 12-year lease. There will also be strong capital growth for this asset due to its undervalued nature. This opportunity suits an astute investor seeking to break into the Sydney market with a great set-and-forget asset providing a healthy cash return.

This is our clients’ first purchase with Rethink Investing. They are a business owner with plans to retire in the next 5 years. Their goal is to build $200,00pa in passive income quickly. We planned on targeting supermarkets in Sydney for stage one of this plan as it fits their lower risk tolerance. This investment was perfect as it gave them a 6% plus net yield and proximity to Sydney’s CBD! We are now on the hunt for property number two.

Purchase Details
Asking Price
4500000
Purchase Price
3864199.42
Deposit (assuming
65
% debt)
1352469.8
Stamp Duty
205982.4
Building Report*
800
Solicitor Cost*
7500
Valuation*
4000
Other Fees* (Depreciation
report, bank fees)
Total Cash Required
1570752.2
Purchase Price + Purchasing Cost
4082481.82
Net Annual Cash Flow Return
236700
Net Yield on Property
6.13
%
Net Yield Accounting for
Purchasing Costs
5.8
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
1570752.2
Cost of Loan
(Assume
5.5
% pa on
65
% debt)
138145.13
Return of Equity
(Pure cash flow return)
6.27
%
Return of Equity with a
5% Capital Growth Rate:
18.57
%
Return of Equity with a
7% Capital Growth Rate:
23.5
%
Return of Equity
10% Capital Growth Rate:
30.88
%
*approximate number

Key Highlights

• Building Area: 319m2

• NLA: 319m2

• Annual income of $236,700pa net + GST

• Strong tenant with over 5 years of trading history at this location

• Prominent location in the heart of Waterloo’s Diversity precinct

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