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Purchased

Set-and-forget!

  • 12-year lease expires 2034
  • Strong 6.24% net yield
  • Total current net rent: $265,000 (after 100% of the outgoings)

Purchase Details

Asking Price

$4,800,000

Purchase Price

$4,250,000

Deposit (assuming 70% debt) - 30%

$1,275,000

Stamp Duty

$233,178

Building Report*

$900

Solicitor Costs

$8,000

Valuation

$3,500

Total Cash Required

$1,520,578

Purchase Price + Purchasing Costs

$4,495,578

Net Annual Cash Flow Return

$265,000

Net Yield on Property

6.24%

Net Yield Accounting for Purchase Costs

5.89%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$1,520,578

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

$89,250

Return on Equity (pure cash flow return):

11.56%

Return on Equity with a 5% Capital Growth Rate:

25.53%

Return on Equity with a 7% Capital Growth Rate:

31.12%

Return on Equity with a 10% Capital Growth Rate:

39.51%

*approximate numbers

Building Type: Retail
Building Area: 1,335m2

NLA: 4,430m2
WALE: N/A

How we helped this client

This is our client’s third purchase with Rethink Investing. They were looking to buy a set-and-forget style of investment to help them prepare for retirement. This purchase was perfect as it came with the security of a global brand that has been in operation since 1965 (Gold’s Gym) and a very expensive fit-out, which would make it very difficult for the tenant to move.

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