- Purchase November 2022.
- We helped a high net worth client purchase this prime asset on the main street of Margaret River in the beautiful south west of WA.
- The properties comprises three retail tenancies on the ground floor and 6 small offices on the top floor anchored by Pharmacy 777.
- Original asking price of $4.5M - we negotiated the price down to $3.95M
- The property was self managed by the owners requiring significant work in the due diligence period to understand leases, outgoings and net income.
- Settlement was then conditional on receiving deeds of variation to correct key lease terms with several tenants.
- Final net rent of $265k p.a. equating to a passing yield of 6.72%.
- Strong rental growth expected given most leases have CPI market reviews, with a yield of +7% expected within 12 months, which is top of the range for Margaret River.
Acquisition Details
Purchase Details
Purchase Price
$3,950,000
Net Rent
$265,000
Net Yield
6.7%
Financing
Borrowing
Deposit
100%
$3,950,000
Acquisition Costs
5%
$197,500
Total Funds Required
$4,147,500
Free Cash Flow
Net Rent
$265,000
Interest Expense
Free Cash Flow
$265,000
Return on Cash Invested
6.4%
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