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Purchased

Essential service retail investment

  • Estimated net income: $256,725pa + GST
  • Everyday service tenants include District Coffee Shop, Richard’s Takeaway and Hairdressers Units, providing an excellent mix of daily retail needs
  • A brand new 10-year lease to SPAR Supermarket to 2031 plus options through to 2041, which represents 67% of the income

Purchase Details

Asking Price

$3,800,000

Purchase Price

$3,500,000

Deposit (assuming 65% debt) - 35%

$1,225,000

Stamp Duty

$195,213.70

Building Report*

$1,200

Solicitor Costs

$8,500

Valuation

$4,000

Total Cash Required

$1,433,913.70

Purchase Price + Purchasing Costs

$3,708,913.70

Net Annual Cash Flow Return

$256,725

Net Yield on Property

7.34%

Net Yield Accounting for Purchase Costs

6.92%

Cash-On-Cash Returns

Deposit Needed = 35% + Costs:

$1,433,913.70

Cost of loan (assume 5.25% pa on 65% debt):

$119,437.50

Return on Equity (pure cash flow return):

9.57%

Return on Equity with a 5% Capital Growth Rate:

21.78%

Return on Equity with a 7% Capital Growth Rate:

26.66%

Return on Equity with a 10% Capital Growth Rate:

33.98%

*approximate numbers

Building Type: Retail
Building Area: 1,137m2

NLA: 3,255m2
WALE: 7

How we helped this client

Rethink Investing’s acquisitions team recently secured this commercial property with a supermarket tenant on a 10-year lease. There are a total of four tenancies. The investment clears over $137,000pa in passive income and got the new owner. This is after 100% of the outgoings and the 65% mortgage costs at the current interest rates!

This is our client’s first property with Rethink Investing. They were looking for a high-yielding property to help build a passive income. This essential service investment had the best numbers out of any other deals we found at the time. Having multiple tenants also diversifies the income risk for the client.

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