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Purchased

Industrial Warehouse Investment Opportunity

 

This 3,590sqm freehold block with 2 industrial warehouses in an extremely tight rental market which sees this type of property lease within only 20 days. Both warehouses are currently significantly under-rented by approx. $80k pa. A conservative cap rate of 6.5% equates to a value uplift of $1.23M+.

With a total building area of 1,879 sqm, the rebuilt value is around $3.75M ($ 2,000 sqm) + land at $900k ($250/sqm), making this an excellent purchase at only $2.15M.

Key Highlights of this property include:

• 3,590sqm freehold block (54m street front)
• 2 leased warehouses
• Net Rent $140k pa + outgoings + GST
• Tight rental market for industrial units leasing within 20 days
• Under-rented by $80k pa
• Adjusted rent = $225,480pa + outgoings + GST
• Adjusted net yield = +10.4%

Purchase Details

Asking Price

$2,300,000

Purchase Price

$2,150,000

Deposit (assuming 70% debt) - 30%

$645,000

Stamp Duty

$63,891.50

Building Report*

$1,500

Solicitor Costs

$8,500

Valuation

$3,500

Total Cash Required

$772,326.50

Purchase Price + Purchasing Costs

$2,277,326.50

Net Annual Cash Flow Return

$140,000

Net Yield on Property

6.51%

Net Yield Accounting for Purchase Costs

6.15%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$772,326.50

Cost of loan (assume 6.25% pa on 70% debt):

$94,062.50

Return on Equity (pure cash flow return):

5.95%

Return on Equity with a 5% Capital Growth Rate:

19.87%

Return on Equity with a 7% Capital Growth Rate:

25.43%

Return on Equity with a 10% Capital Growth Rate:

33.79%

*approximate numbers

Building Type: Industrial

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