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Purchased

Entire blue-chip shopping centre

  • $700,000 pa + GST + Outgoings
  • Centre comprises 15 tenants
  • High Growth Corridor

Purchase Details

Asking Price

$10,700,000

Purchase Price

$10,000,000

Deposit (assuming 70% debt) - 30%

$3,000,000

Stamp Duty

$592,249

Building Report*

$900

Solicitor Costs

$5,500

Valuation

$3,000

Total Cash Required

$3,601,649

Purchase Price + Purchasing Costs

$10,601,649

Net Annual Cash Flow Return

$700,000

Net Yield on Property

7%

Net Yield Accounting for Purchase Costs

6.60%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$3,601,649

Cost of loan (assume 3% pa on 70% debt):

$175,000

Return on Equity (pure cash flow return):

14.58%

Return on Equity with a 5% Capital Growth Rate:

28.46%

Return on Equity with a 7% Capital Growth Rate:

34.01%

Return on Equity with a 10% Capital Growth Rate:

42.34%

*approximate numbers

Building Type: Shopping Centre
Building Area: 1,371m2

Land Area: 4,800m2
WALE: 3.7

How we helped this client

This is our valued client’s third commercial property purchased with us. As a result, they have built a passive income of over $1.5 million per annum in positive cash flow. Their first two properties were industrial assets, and they were keen to add a neighbourhood shopping centre to their portfolio. When we undertook our due diligence we uncovered several incomplete leases and discrepancies in the numbers, which, whilst these issues didn’t affect the quality of the asset, we took the opportunity to use them as leverage to secure a strong lease and negotiate an exceptional price for our client.

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