Purchased

High yield shopping centre!

  • Location: Townsville
  • Commercial Type: Freehold shopping centre with 11 tenants
  • Total current net rent: $254,000 (after 100% of the outgoings)

Purchase Details

Asking Price

$3,800,000

Purchase Price

$3,410,000

Deposit (assuming 70% debt) - 30%

$1,023,000

Stamp Duty

$188,945

Building Report*

$1,300

Solicitor Costs

$8,500

Valuation

$5,000

Total Cash Required

$1,226,745

Purchase Price + Purchasing Costs

$3,613,745

Net Annual Cash Flow Return

$254,000

Net Yield on Property

7.45%

Net Yield Accounting for Purchase Costs

7.03%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$1,226,745

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

$71,610

Return on Equity (pure cash flow return):

14.87%

Return on Equity with a 5% Capital Growth Rate:

28.77%

Return on Equity with a 7% Capital Growth Rate:

34.33%

Return on Equity with a 10% Capital Growth Rate:

42.66%

*approximate numbers

Building Type: Commercial
Building Area: 826m2

NLA: 3,077m2
WALE:

How we helped this client

This is our valued client’s first purchase with Rethink Investing. One of their requirements was to get a 7% net yield or better, which is very difficult in this market. However, using our strong contacts in the industry we were able to secure this asset off-market for our client earlier this year. It’s a proven successful centre with some A-grade tenants such as BWS, Domino’s and a range of other tenants who have been trading out of the centre for many years. After the due-diligence process went smoothly and this asset settled, our client is now on the hunt for their next commercial property.

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