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Purchased
Passive investment with a long lease featuring a high class tenant
Representing a board of directors, our task was to find a tenanted commercial investment, with a very long lease and a solid cash-flow. This property was perfect for their needs as it represents a near perfect passive investment which will require little involvement due to the ten year lease and the high class tenant.
Key Highlights
• Building Area: 940m2
• Land Area: 998m2
• Annual Net Rental: $448,000 p/a
• 10 year lease + options
• There are 24 car spaces on the title included in the lease
Purchase Details
Asking Price
7500000
Purchase Price
7300000
Deposit (assuming
70
% debt)
2190000
Stamp Duty
Nil
331000
Building Report*
1000
Solicitor Cost*
5500
Valuation*
3000
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
Total Cash Required
2530500
Purchase Price + Purchasing Cost
7640500
Net Annual Cash Flow Return
448000
Net Yield on Property
6.14
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
5.86
%
Cash-On-Cash Returns
Deposit Needed =
% + Costs
2530500
CASH FLOW AFTER
MORTGAGE COSTS
MORTGAGE COSTS
Cost of Loan
(Assume
3
% pa on
70
% debt)
127750
Return of Equity
(Pure cash flow return)
12.66
%
Return of Equity with a
5% Capital Growth Rate:
27.08
%
Return of Equity with a
7% Capital Growth Rate:
32.85
%
Return of Equity
10% Capital Growth Rate:
41.50
%
*approximate numbers
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