Property spotlight
Willawong, QLD.
Willawong commercial case study covers a first-time client securing a capital-city value-add industrial asset without debt and lower initial yield pressure.
- $2.4m
- Purchase price
- 4.92%
- Net passing yield
- $118,185
- Net income p.a.
- 1,118 m²
- Building area
- 100%
- Leased
Securing a Prime Industrial Asset
A first-time client was seeking a quality “value-add” opportunity in a capital city. The buyer, not taking on debt, was less concerned about the initial yield.
Challenges:
This opportunity was sourced off-market, and Performance Property saw significant value as the rent was 50% below current market rates. The existing tenant had been in the property for over 12 years and was also the tenant of an adjoining property along with another property down the road.
Discussions during due diligence established that the tenant was well ingrained in the area and would incur significant costs in moving, giving the impression that they would extend their option and remain in the property for the foreseeable future.
Outcome:
Shortly after settlement, the tenant renewed their option, and the rent increased to market rates. This adjustment increased the initial yield from 4.92% to 7.22%, resulting in an increase of approximately $600,000 within just six months of settlement.
Acquisition Overview
| Detail | Value |
|---|---|
| Location | Willawong, Queensland 4110 |
| Type | Industrial |
| Land | 1893 m2 |
| Building Area | 1118 m2 |
Property Features
- Concrete tilt panel, high clearance, clearspan warehouse
- Strategically located, quality industrial catchment
- Excellent access to warehouse via extra wide electric roller door
- Fully fitted two level office
- Onsite private car parks
- Secure gated complex
Purchase Details
| Detail | Value |
|---|---|
| Asking Price | $2,600,000 |
| Purchase Price | $2,400,000 |
| Net Passing Yield | 4.92% |
| Market Yield | 7.22% |
| $/m2 Building Area | $2146/m2 |
| $/m2 Land Area | $1267/m2 |
Tenancy Details
| Detail | Value |
|---|---|
| Lease Term | 5 Year lease term (8 Months remaining) |
| Net Income PA | $118,185 |
| Net Income $/m2 | $106/m2 |
| Market Income | $173,290 |
| Net Income $/m2 | $155/m2 |
| Tenancies | 100% Leased to one tenant |
Client Experience:
For the client, this investment provided a significant value-add opportunity with immediate growth potential. Our team’s expertise in identifying off-market opportunities and negotiating favourable terms was crucial in securing this asset. Our approach and deep market insights provided by our team helped our client navigate the complexities of the commercial property market, leading to a highly rewarding investment.
The Performance Advantage
Performance Property’s ability to identify undervalued assets 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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