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Purchased

Passive investment with a long lease featuring a high class tenant

  • Annual Net Rental: $448,000 p/a
  • 10 year lease + options
  • There are 24 car spaces on the title included in the lease

Purchase Details

Asking Price

$7,500,000

Purchase Price

$7,300,000

Deposit (assuming 70% debt) - 30%

$2,190,000

Stamp Duty

$331,000

Building Report*

$1,000

Solicitor Costs

$5,500

Valuation

$3,000

Total Cash Required

$2,530,500

Purchase Price + Purchasing Costs

$7,640,500

Net Annual Cash Flow Return

$448,000

Net Yield on Property

6.14%

Net Yield Accounting for Purchase Costs

5.86%

Cash-On-Cash Returns

Deposit Needed = 30% + Costs:

$2,530,500

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

$127,750

Return on Equity (pure cash flow return):

12.66%

Return on Equity with a 5% Capital Growth Rate:

27.08%

Return on Equity with a 7% Capital Growth Rate:

32.85%

Return on Equity with a 10% Capital Growth Rate:

41.50%

*approximate numbers

Building Type: Office Space
Building Area: 940m2

Land Area: 998m2
WALE: 10

How we helped this client

Representing a board of directors, our task was to find a tenanted commercial investment, with a very long lease and a solid cash-flow. This property was perfect for their needs as it represents a near perfect passive investment which will require little involvement due to the ten year lease and the high class tenant.

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