Retail properties sell on 7% yield
Three adjoining commercial properties at Taylors Lakes, in Melbourne’s northern residential growth corridor, have sold under the hammer for $2.91 million. The indicative yield to the investor was 7.1%.
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Located at 900 Old Calder Highway in Taylors Lakes, the retail properties are leased to Souvlaki Hut restaurant, Bamboo Asian Restaurant and the Commonwealth of Australia.
The properties were sold in one line by DTZ Australia.
The first property, leased to the Commonwealth of Australia , operates as the local electorate office for Brendan O’Connor, Federal Member for Gorton. It has a building area of 210 sqm and is leased for six years from May this year with a further three year option.
The current annual rental is $85,008 plus GST, with the lessee meeting all building outgoings. There are annual rent reviews of 4% provided in the lease or to market rates as an option. The property also holds a parking right for eight vehicles.
The purchase price attributed to this property is $1,195, 137.
The second property is leased to the Souvlaki Hut Greek style restaurant and has a building area of 131 sqm. The lease is for five years from 15 May this year with three further five year options.
The current annual rental is $55,000 plus GST with the tenant responsible for building outgoings. The lease is also supported by a security deposit and directors guarantees, and provides 4% annual rental reviews or to market as an option. The property also holds 12 car parking spaces.
The purchase price for this property was $773,187.
The third property in the complex has an area of 380 sqm and is leased to Bamboo Asian Restaurant. The lease has a ten year currency from 8 May this year with two further five year options.
The current annual rental is $67,000 plus GST with a review to $75,000 for 2007 and $80,000 plus GST for 2008, thereafter with 3% annual reviews. Outgoings are also met by the tenant.
The lease is also supported by a security deposit and director’s personal guarantees. The tenant has a 16 car space parking right.
The purchase price attributed to this property is $941, 676.
DTZ Australia selling agent Marcus Quinn said that the two properties leased as restaurants benefit from the rapidly growing Taylors Lakes and Sydenham residential corridor adjacent to the Calder Freeway.
“Both tenants are businesses serving the growing local community and occupy a modern building complex with plenty of car parking,” said Mr Quinn.
“We anticipated they would sell for prices in line with current investor expectations to show yields of around 7%,” he added.
Source: http://www.propertylook.com.au