 Asset Class: | Industrial |
 Price: | $ 2600000 |
 Net Yield: | 5.80 % |
Net Yield - including solar strategy: | % |
 Property Market Status: | Off Market |
<b>Exceptional Strata Investment Opportunity</b><br><br>Presented below is a prime investment opportunity within an 8-lot complex strata, offering a substantial landholding of 3,577sqm with a building area of 1,945sqm. Constructed in 1996, the property presents evident depreciation benefits and is secured by a long-term lease to Viva Leisure Property Pty Ltd, a well-established gymnasium operator.<br><br>Acquired for $2,600,000, the asset generates a strong net income of $151,178.25 per annum plus outgoings and GST, delivering a net yield of 5.8%. The lease term extends until 31 July 2032, with a 5-year option to 2037, incorporating annual rental increases of 3% and a market review at option. Additionally, the tenant covers 100% of outgoings, including management fees, ensuring a hassle-free investment.<br><br><br><b>What We Like About This Asset</b><br><br>- Replacement value approx $3.96M ($1,800/sqm)<br>- Rent significantly below market > currently $78/sqm ($68/sqm incl mezz) - evidence of fair market rent at $100-$120/sqm<br>- Building purchase rate $1,296 (excl mezz) - market evidence between $1,800 - $2,000/sqm<br>- Experienced, national gym operator<br>- Clean, well-maintained concrete tilt-up warehouse<br>- Large exclusive land component of 3,577sqm (corner lot) > easy customer parking, good business exposure
How old is the asset?
Vendor's reason for selling?
Days property been on market?
Is this property strata titled?
Are the seller and tenant related parties?
How long has the current tenant been on site?
How long has the tenant been in business?
Is this property in a flood zone?
Is this lease a leaseback arrangement?
<b>The Commercial Market</b><br><br>Port Kennedy, WA, features a diverse commercial market with businesses spanning retail, industrial, and service industries. The Port Kennedy Business Park hosts showrooms, consulting rooms, offices, health studios, and medical and veterinary services, alongside warehousing and trade-related industries. The suburb's workforce is also engaged in supermarket and grocery retail, defense, takeaway food services, mining, and healthcare, highlighting a mix of local and regional economic drivers. With its proximity to major transport routes, Port Kennedy supports a mix of small to medium enterprises, making it an attractive location for business operations.<br><br>In terms of development density, Port Kennedy is experiencing significant commercial and residential expansion. The Kennedy Bay project is a major coastal redevelopment that integrates residential, recreational, and community spaces, capitalizing on the area's natural beauty and connectivity to Perth. Additionally, the Port Kennedy Industrial Estate, a 50-hectare industrial hub, is set to enhance economic activity by providing flexible lot sizes and strategic transport access. These developments signal a shift towards increased urban density, balancing industrial growth with lifestyle-oriented planning.<br><br><b>Lifestyle & Population</b><br><br>Port Kennedy, a coastal suburb approximately 48 kilometers south of Perth, offers residents a lifestyle that harmoniously blends natural beauty with modern amenities. The area boasts pristine beaches, making it ideal for swimming, surfing, and fishing. Outdoor enthusiasts can explore the Becher Wetland Suite, known for its unique linear wetland formations, and enjoy recreational facilities like the Lark Hill Sportsplex and The Links Kennedy Bay golf course. The suburb also provides essential services, including shopping centers, schools, and community centers, fostering a strong sense of community.<br><br>According to the 2021 Census, Port Kennedy had a population of 13,784, with a median age of 36 years. In recent years, the suburb has experienced substantial growth, with the median house value increasing by approximately 110.64% over the past five years. This upward trend is expected to continue, driven by ongoing developments such as the Kennedy Bay coastal community project, which aims to attract a diverse mix of residents and visitors. These developments are anticipated to enhance the suburb's appeal, contributing to sustained population growth and an enriched lifestyle for its residents.<br>
Additional Location Information File<b>Viva Leisure</b><br><br>Founded in 2004, Viva Leisure operates health clubs (gymnasiums) within the health and leisure industry.<br><br>The Company directly operates over 160 health clubs within the Australian Capital Territory, New South Wales, Queensland , Victoria and Western Australia, with the majority operating under the Club Lime and Hiit Republic brands. In addition, Viva Leisure owns the Plus Fitness master franchise which includes over 200 franchisee locations in Australia, New Zealand and India.<br><br><a style="color:rgb(51, 51, 51);display:inline;" target="_blank" href="https://vivaleisure.group/"><u>https://vivaleisure.group/</u></a><br>
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Under the lease all outgoings are 100% recoverable, including management fees and land tax.
Additional Financial Information FileInitial Term:
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Rental Comparables 8/1-5 Sunlight Drive, Port Kennedy - 1,945m2 - $77/m2 4/14 Jacquard Way, Port Kennedy - 422m2 - $142/m2 48 Bakewell Drive, Port Kennedy - 655m2 - $143/m2 1/16 Paxton Way, Port Kennedy - 364m2 - $115/m2 13 Paxton Way, Port Kennedy - 433m2 - $134/m2 Sales Comparables 8/1-5 Sunlight Drive, Port Kennedy - 1,945m2 - $1,295/m2 13 Sunlight Drive, Port Kennedy - 1,651m2 - $1,893/m2 1/16 Fielden Way, Port Kennedy - 580m2 - $2,560/m2 4 Crowley Street, Port Kennedy - 280m2 - $3,929/m2 2 Dalloway Rd, Port Kennedy - 342m2 - $3,655/m2 2/12 Helmshore Way, Port Kennedy - 286m2 - $2,220/m2
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<b>Purchase Price:</b> $2,600,000 (negotiated)<br><br><b>Current Net Rent:</b> $151,178.25pa + Outg + GST (incl mng) <br><b>Any Additional Areas</b>: Exclusive use of 1,633sqm land (in addition to NLA)<br><b>Current Net Yield:</b> 5.8% (incl mng)<br><b>NLA / Land:</b> 1,945sqm (excl 234sqm mezz which agent claims to be approved - TBC) / 3,577sqm (total footprint including exclusive land)<br><b>Building Purchase Rate per sqm:</b> $1,296/sqm (excl mezz)<br><b>Net Rent per sqm:</b> $78/sqm (excl mezz)<br><b>100% Outgoings Recoverable: </b>Yes<br><b>Outgoings (per sqm):</b> $56,313.4pa (excl mng) ($28.95/sqm)<br><b>Age of Asset: </b>approx. 27 years<br><b>Any Incentives in the Lease:</b> None<br><b>Are Seller & Tenant Related:</b> No<br><b>Re-letting Period:</b> expect 2-4 months in the current market<br><b>Flood Zone:</b> No<br><b>Bushfire Zone:</b> No<br><b>Contamination:</b> No<br><br><b>Asset Composition: </b><br><ul style="list-style-type:disc;list-style-position:inside;padding-inline-start:20px;"><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Strata (8 units in total)</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Concrete Tilt-Up construction</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">3,577sqm of exclusive land</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">1,945 sqm of NLA</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Office & Amenities 359sqm</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Warehouse/Gym 1,615sqm</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Mezzanine Area 234sqm (approved according to agent, awaiting confirmation)</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Exclusive use of 1,633sqm land (excluded from NLA)</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Two level gym, with a broad range of gym areas and facilities.</span></p></li></ul><br><b>Infrastructure Level:</b> Tier 1<br><br><b>Key Highlights:</b><br><ul style="list-style-type:disc;list-style-position:inside;padding-inline-start:20px;"><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">8-lot complex strata with 3,577sqm of allocated land</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">1,945sqm of building area</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Built in 1996 > depreciation benefits evident</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Purchase Price $2,600,000</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Current net rent $151,178.25pa + Outg + GST</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Net Yield 5.8%</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Lease Expiry 31 July 2032 + 5-years (2037)</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Annual increase at 3%, </span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">market review in 2026 (capped at 5%) and at option</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">100% of outgoings paid by tenant (incl mng)</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Tenant - Viva Leisure Property Pty Ltd</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">In a complex of eight units, three of which form part of the Viva Leisure, Port Kennedy gym facility</span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Located 50km north of the Perth Airport </span></p></li><li style="list-style-image:none;color:rgb(51, 51, 51);"><p style="display:inline;"><span style="color:rgb(51, 51, 51);font-weight:normal;font-style:normal;">Located 46km North of the Perth CBD</span></p></li></ul><br><b>Agent Questions:</b><br><br><b>How old is the building?</b> 1996 approx<br><b>Why is the owner selling?</b> A sale of jointly owned assets by a brother and a sister.<br><b>Is the tenant related to the owner in any way?</b> No<br><b>Are mng and taxes recoverable?</b> All costs recoverable<br><b>Does the property need any maintenance work?</b> No<br><b>Is the floor area 100% council approved?</b> Yes, to my knowledge it is. However, I will obtain confirmation in writing.
