Industrial Parks of Australia have available for sale to the astute investor a range of tenanted properties.
IPA industrial leases typically feature the following advantages:
- Medium to longer terms
- Tenants pay all outgoings including strata levies, repairs, rates and taxes
- “Make-good” obligations by the tenant at end of lease
- Security deposits or bonds
- Automatic annual increases
- Depreciation allowances available as a tax deduction
- Attractive yields compared to residential property
- Reduced maintenance and fewer management issues for industrial premises compared to residential.
- All GST on outgoings recoverable from the tenant
- No GST payable on the purchase price as tenanted property is a “going concern” and GST free
Sample Investor Returns on a Leased Industrial Unit
Purchase Price :: $400,000
Initial Rent :: $34,000
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
| Rent over 5 Years |
34,000 |
35,360 |
36,774 |
38,245 |
39,775 |
| Increases provided in Lease |
1,360 |
1,414 |
1,471 |
1,530 |
1,591 |
| Outgoings Recovered |
5,100 |
5,100 |
5,100 |
5,100 |
5,100 |
| Total Income |
40,460 |
41,874 |
43,345 |
44,875 |
46,466 |
| Less Outgoings Paid |
(5,100) |
(5,100) |
(5,100) |
(5,100) |
(5,100) |
| Simple Net income $ pa |
35,360 |
36,774 |
38,245 |
39,775 |
41,366 |
| Simple Net Return % pa |
8.8% |
9.2% |
9.6% |
9.9% |
10.3% |
| Average Net Return Over 5 Years |
9.6% |
|
|
|
|
Geared Investment Returns
Gearing Ratio :: 70%
Interest Rate :: 7%
| Loan Amount (Less Surplus Income pa) |
280,000
|
264,240
|
245,962
|
224,934
|
200,905
|
Equity Amount
|
120,000
|
|
|
|
|
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Simple Net Income $ pa (above)
|
35,360 |
36,774 |
38,245 |
39,775 |
41,366 |
Less Interest
|
(19,600) |
(18,497) |
(17,217) |
(15,745) |
(14,063) |
Income After Interest
|
15,760 |
18,278 |
21,028 |
24,030 |
27,303 |
| Return on Equity Invested |
13.1% |
15.2% |
17.5% |
20.0% |
22.8% |
| Average Net Return Over 5 Years |
17.7% |
|
|
|
|
Commercial lease providing for all outgoigs paid by the tenant and annual rental increase of the greater of CPI or 4%.
All amounts exclude GST, market rental reviews and inflation/capital gains. E&OE.
After tax returns may be enhanced with available depreciation allowances and negative gearing.
The above is offered as an example only and does not constitute financial advice or imply a guarantee of returns.
It also does not take into account individual circumstances, taxation or negative gearing opportunities or regulations.
Investors or purchasers should obtain their own independent advice.
A Range of Locations and Investments
:: Western Sydney
:: Northern Sydney
:: Hills District
:: Larger warehouses to $5m
:: Smaller factory units from $300,000
:: Main road fronting showrooms/display units
:: One only main road fronting leased Fitness Centre
|
