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Purchased
Freehold shopping centre!
This is our client’s 2nd property with Rethink Investing. The client was targeting off-market shopping centres, one of our specialties. We found this high-yielding asset for them, which resulted in us purchasing without competition. We also negotiated rental guarantees for two vacancies which significantly reduced the risk of this asset.
Key Highlights
• Building Area: 1,228m2
• NLA: 6,420m2
• 11 tenants with the Spar and Liquorland tenancies underwriting almost 50% of the income stream
• Annual income: $287,512pa + outs + GST
• Asking price = $4.4 million (Negotiated price = $4.1 million with 5-year rental guarantees)
Purchase Details
Asking Price
4400000
Purchase Price
4100000
Deposit (assuming
65
% debt)
1435000
Stamp Duty
Nil
232066.9
Building Report*
2000
Solicitor Cost*
9000
Valuation*
4000
Other Fees* (Depreciation
report, bank fees)
report, bank fees)
Total Cash Required
1682066.9
Purchase Price + Purchasing Cost
4347066.9
Net Annual Cash Flow Return
287512
Net Yield on Property
7.01
%
Net Yield Accounting for
Purchasing Costs
Purchasing Costs
6.61
%
Cash-On-Cash Returns
Deposit Needed =
% + Costs
1682066.9
CASH FLOW AFTER
MORTGAGE COSTS
MORTGAGE COSTS
Cost of Loan
(Assume
4.5
% pa on
65
% debt)
119925
Return of Equity
(Pure cash flow return)
9.96
%
Return of Equity with a
5% Capital Growth Rate:
22.15
%
Return of Equity with a
7% Capital Growth Rate:
27.03
%
Return of Equity
10% Capital Growth Rate:
34.34
%
*approximate numbers
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