Purpose of Purchase: Commercial Investment
Property Type: Retail
- Long term tenant
- Good quality building
- Return of +7%
- National Tenant on new 7 year lease
- Lease increases of 4% p.a.
- Long term tenant history of 10 years
- Modern building in Toowoomba CBD
- High flow of vehicles and pedestrians
A Successful Investment:
The client was an experienced commercial investor and was seeking a strong yield (over 7%). As part of our negotiation process we had a 5 year option period added to the current lease (to reduce the risk of the tenant requesting a rent free incentive to execute a new lease at the end of their current term). During the due diligence period it was discovered that the first year net income had been incorrectly reported so we re-negotiated a significant reduction to bring this back in line with the originally expected yield. We secured the property at a Net yield of approximately 8.4% and with 7 years remaining on the lease, by the expiry the return will have increased to 10.67%.