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Purchased

High-yielding Industrial With Upside

  • NET Annual income of $142,552 p.a + GST (after rental management and land tax)
  • 4 year lease with annual CPI increases
  • Proven tenant with 15 locations

Purchase Details

Asking Price

$2,200,000

Purchase Price

$1,955,000

Deposit (assuming 65% debt) - 35%

$684,250

Stamp Duty

$100,336.32

Building Report*

$5,000

Solicitor Costs

$7,500

Valuation

$4,000

Total Cash Required

$801,086.32

Purchase Price + Purchasing Costs

$2,071,836.32

Net Annual Cash Flow Return

$142,552

Net Yield on Property

7.29%

Net Yield Accounting for Purchase Costs

6.88%

Cash-On-Cash Returns

Deposit Needed = 35% + Costs:

$801,086.32

Cost of loan (assume 5.75% pa on 65% debt):

$73,068.13

Return on Equity (pure cash flow return):

8.67%

Return on Equity with a 5% Capital Growth Rate:

20.88%

Return on Equity with a 7% Capital Growth Rate:

25.76%

Return on Equity with a 10% Capital Growth Rate:

33.08%

*approximate numbers

Building Type: Industrial
Building Area: 917m2

Land Area: 2,750m2
WALE:

This is our clients first purchase with Rethink Investing. They were looking for a high yielding investment with upside. This property had a great initial yield plus it was under rented. This means there is upside in the numbers once the lease expires. The due-diligence uncovered some small discrepancies with the numbers which allowed us to negotiate another $30,000 off the price.



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