Home > Commercial Property Acquisitions > Applecross, WA
Applecross,
Western Australia
Commercial Case Study
Securing a High-yield Investment in Perth's Residential Market
Performance Property was approached by a long-term client seeking a balanced investment with strong growth prospects and a yield superior to that of single residential dwellings. The client, already having a diverse portfolio across commercial and residential assets, wanted to expand further. The challenge was to find a property that not only offered immediate returns, but also had potential for future development and value appreciation.
Challenges:
The search led Performance Property to the Perth unit market, identified through meticulous research as a strong prospect. The team came across a residential block of units/villas located in Applecross, prior to launching to the open market.
This property included seven single-level 3-bedroom, 1-bathroom villas spread over a 2176 m2 corner landholding with flexible zoning and future development potential. Despite its promising features, the initial asking price of $4.2 million did not represent good value. Performance Property needed to secure this property at a more favourable price while ensuring that the deal met the client’s investment criteria.
Outcome:
The property was allowed to go to market, with Performance Property closely monitoring the campaign. Leveraging our strong relationships with the sales agent, the team managed to secure the property for $3,805,000, well below the asking price. Our negotiation resulted in a price per unit of $543,500, with a net yield of 4.08%.
During the due diligence process, it was discovered that the cost of strata titling the asset was minimal. This insight revealed that the units could be sold individually at a combined price of $4.8 million, immediately adding an uplift of $1 million for the purchaser. Additionally, the property was 100% leased with a net income of $155,244 per annum, further enhancing its attractiveness.
Acquisition Overview
Applecross, WA 6153
Residential block of units/villas
Land: 2176 m2
Building Area: 7 single-level 3 Bed x 1 Bath Villas
- Corner landholding with flexible zoning providing future development potential
- 7 single-level villas all 3 BRM x 1 Bath with 107 m2 of living area
- Ability to strata title and sell down individually
- Low vacancy area with strong rental growth prospects
Asking Price: $4,200,000
Purchase Price: $3,805,000
Net Yield: 4.08%
Price Per Unit: $543,500
Net Income PA: $155,244
Tenancies: 100% Leased
Client Experience:
For the client, this investment was more than just numbers and statistics. It was about securing their financial future and ensuring a steady income stream, while also having the potential to capitalise on future market trends. The trust and relationship between the client and the Performance Property team was critical in this process. The client’s confidence in our expertise and personalised approach was instrumental in navigating the complexities of the market and helping the client make informed decisions.
Performance Property’s ability to understand our client’s unique needs and aspirations, coupled with our deep market insights and strong industry connections, transformed this challenging venture into a rewarding investment opportunity. This case study is a testament to how our team at Performance Property not only focuses on financial metrics but also places significant emphasis on building lasting relationships and delivering tailored solutions that resonate with our clients’ personal and financial goals.