Secured off market - brand new childcare centre under construction
- Leased / Pre-committed to strong child care operator at rental of $340,000 net + outgoings pa
- 15 year lease + 2 x 5 year options
- Substantial depreciation benefits
- Wealthy catchment within huge growth area
Purchase Details
- Asking Price $6,800,000
- Purchase Price $6,548,000
- Deposit (assuming 70% debt) - 30% $1,964,000
- Stamp Duty $373,000
- Other purchasing costs $40,000
- Total Acquisition Costs $2,377,400
- Net Rental $340,000
- Net Yield on Property 5.20%
Cash-On-Cash Returns
- Deposit Needed = 30% + Costs: $2,377,400
- Cost of loan (assume 2.5% pa on 70% debt): $114,590
- Return on Investment (cash on cash): 9.48%
- Return on Investment with a 5% Capital Growth Rate: 23.25%
*approximate numbers
** Does not include benefit of depreciation which improves the above ROI figures
How we helped this client
Our client was seeking to diversify a substantial profit made on another investment into a secure long term “bricks and mortar” commercial property asset. Being a first time venture into commercial property they required guidance to assist them to find and secure an A Grade passive investment in very competitive market conditions.
Anton Property Co was able to introduce our client through our networks to a developer going through the final stages of a childcare development, who were open to an off market sale. After some face to face negotiations we were able to secure the property on favourable terms for our client that would not have been achievable if put to the open market.
The transaction itself was made slightly complicated due to the project still being under construction, however we were able to guide our client, and the seller, solicitors, lender and valuer successfully through to completion.