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Off-Market A-Grade Freehold Investment

We secured this commercial investment off-market on behalf of our client. The A-grade office/warehouse facility is of modern concrete tilt-panel construction, with a total Gross Lettable Area (GLA) of 2,812m2 situated on a 4,132m2 allotment. The complex is occupied by nine tenants across nine (9) separate units, with the potential to be strata-titled in the future (Subject to Council Approval).

These units range from 193sqm to 428sqm respectively and comprise a combination of office, warehouse and retail uses. Why do we like this deal? It’s a high grade building built in 2008 and there is significant upside due to two reasons; 1) Opportunity to strata title for profit (STCA) and, 2) Circa 30%-35% upside in the rents due to them being leased well below current market value. This will give the asset significant future rental income & capital growth.

Purchase Details
Asking Price
7500000
Purchase Price
7050000
Deposit (assuming
70
% debt)
2115000
Stamp Duty
413261.8
Building Report*
1200
Solicitor Cost*
8500
Valuation*
5500
Other Fees* (Depreciation
report, bank fees)
Total Cash Required
2543461.8
Purchase Price + Purchasing Cost
7478461.8
Net Annual Cash Flow Return
446114.49
Net Yield on Property
6.33
%
Net Yield Accounting for
Purchasing Costs
5.97
%
Cash-OnCash Returns
Deposit Needed =
% + Costs
2543461.8
Cost of Loan
(Assume
6
% pa on
70
% debt)
296100
Return of Equity
(Pure cash flow return)
5.9
%
Return of Equity with a
5% Capital Growth Rate:
19.76
%
Return of Equity with a
7% Capital Growth Rate:
25.3
%
Return of Equity
10% Capital Growth Rate:
33.62
%
*approximate number

Key Highlights

• Building Area: 2,812m2

• Land Area: 4,132m2

• NET Annual income of $446,114.49.a + GST (this is after rental management and land tax)

• Diverse Income Profile: The diverse mix of tenants also comes with aggressive rental increases of 4% or higher with CPI.

• Location: Brendale, QLD

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