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Purchased

Industrial investment with national business tenant

  • Purchased off-market 6.25% net return
  • Annual Net Rental: $114,000 pa + GST + Outgoings
  • National Business with a 5 + 5 year lease

Purchase Details

Asking Price

2,000,000

Purchase Price

$1,825,000

Deposit (assuming 70% debt) - 30%

$547,500

Stamp Duty

$91,957.50

Building Report*

$800

Solicitor Costs

$1,500

Valuation

4,000

Total Cash Required

$645,757.50

Purchase Price + Purchasing Costs

$1,923,257.50

Net Annual Cash Flow Return

$114,000

Net Yield on Property

6.25%

Net Yield Accounting for Purchase Costs

5.93%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$645,757.50

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

$31,937.50

Return on Equity (pure cash flow return):

12.71%

Return on Equity with a 5% Capital Growth Rate:

26.84%

Return on Equity with a 7% Capital Growth Rate:

32.49%

Return on Equity with a 10% Capital Growth Rate:

40.97%

*approximate numbers

Building Type: Industrial
Building Area: 790m2

Land Area: 1215m2
WALE: 4

How we helped this client

For our client’s first purchase with us, they were interested in a blue-chip location and freehold industrial investment close to the CBD. We sourced this incredible asset just 13km from the CBD. Purchased off-market, it comes with a 5+5 year lease to a national business. We liked this property because of its exceptionally high yield for an inner city market and a long lease. The tenant had been there many years which gave us more confidence about the long term stability of the asset.

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