Toowoomba, QLD

CLIENT BRIEF

Purpose of Purchase: Commercial Investment

Property Type: Retail

Key Criteria:

  1. Long term tenant
  2. Good quality building
  3. Return of +7%

Client Outcome

Key Positives:

  • 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%.

 

Location

Toowoomba, QLD