Property spotlight
Crestmead, Queensland.
A Crestmead industrial asset was acquired for $5 million, fully leased, with below-market rent and later value uplift above $2 million.
- $5m
- Purchase price
- 6.32%
- Net passing yield
- $315,962
- Net income p.a.
- 3,120 m²
- Building area
- 100%
- Leased
A Strategic Acquisition of a High-yield Commercial Asset in Queensland
Our client was in search of a high-yielding commercial asset in a capital city. This opportunity was sourced off-market, and Performance Property saw significant value as the rent was 10-15% below current market rates and significantly below replacement cost. The property was initially secured under due diligence at a price of $5,050,000, and some minor issues found during this period allowed for a reduction of $50,000 before settlement. Rents in the area have continued to rise, leading to an increase in the value of the asset.
Challenges:
Performance Property successfully secured the property at a favourable price, overcoming initial challenges during the due diligence period.
The strategic location and features of the property, combined with the rising rental market, led to significant value appreciation.
At the expiry of the current lease, Performance Property were able to secure a new tenant on a 5+5 year lease, paying approximately 40% more rent, resulting in an increase of over $2 million in the asset's value.
Acquisition Overview
| Detail | Value |
|---|---|
| Location | Crestmead, QLD 4132 |
| Type | Industrial |
| Land | 6339 m2 |
| Building Area | 3120 m2 |
Property Features
- High clearance, clear span warehouse
- Strategically located between Gold Coast (60 kms) and Brisbane (31 kms)
- 700 Amps 3 phase power available Excellent access to warehouse via 4 electric roller doors
- Large rear hardstand area for container storage
- 50 Onsite private car parks Secure gated complex
Purchase Details
| Detail | Value |
|---|---|
| Asking Price | $5,500,000 |
| Purchase Price | $5,000,000 |
| Net Passing Yield | 6.32% |
| $/m2 Building Area | $1600/m2 |
| $/m2 Land Area | $780/m2 |
Tenancy Details
| Detail | Value |
|---|---|
| Lease Term | 4 Year lease term (2 years remaining) |
| Net Income PA | $315,962 |
| Net Income $/m2 | $101/m2 |
| Tenancies | 100% Leased to one tenant |
Client Experience:
For the client, this commercial investment offered a robust combination of high yield and substantial value growth. Our team’s expertise in identifying undervalued assets and negotiating favourable terms was crucial in securing this opportunity. Our personalised approach and deep market insights provided by the Performance Property team helped our client navigate the complexities of the commercial property market, ultimately leading to a highly rewarding investment.
The Performance Advantage
Performance Property’s ability to identify off-market opportunities and negotiate advantageous terms resulted in securing a high-yielding asset with significant growth potential. This case study demonstrates how Performance Property not only focuses on financial metrics but also prioritises building lasting relationships and delivering tailored solutions that align with clients' personal and financial goals.
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