Join Rethink Commercial Education - Sign up for the 3rd exclusive cohort waiting list!

Purchased

Freehold shopping centre!

  • 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

$4,400,000

Purchase Price

$4,100,000

Deposit (assuming 65% debt) - 35%

$1,435,000

Stamp Duty

$232,066.90

Building Report*

$2,000

Solicitor Costs

$9,000

Valuation

$4,000

Total Cash Required

$1,682,066.90

Purchase Price + Purchasing Costs

$4,347,066.90

Net Annual Cash Flow Return

$287,512

Net Yield on Property

7.01%

Net Yield Accounting for Purchase Costs

6.61%

Cash-On-Cash Returns

Deposit Needed = 35% + Costs:

$1,682,066.90

Cost of loan (assume 4.5% pa on 65% debt):

$119,925

Return on Equity (pure cash flow return):

9.96%

Return on Equity with a 5% Capital Growth Rate:

22.15%

Return on Equity with a 7% Capital Growth Rate:

27.03%

Return on Equity with a 10% Capital Growth Rate:

34.34%

*approximate numbers

Building Type: Retail
Building Area: 1,228m2

NLA: 6,420m2
WALE: 5

How we helped this client

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.

More properties

Contact Us