Commercial Car Park - Kingston Canberra

How does this sound?

6 years on lease remaining
Option for another 10 years
Current rent $93,400 nett
National tenant
Fixed annual increases

Linky

This could fit nicely inside a SMSF depending upon how much you have to stump up initially.

The upside is there is only one tenant, you get paid regardless of whether the carpark is full or not.

No mention of what is payble by way of strata levies.

 

what yield do carparks normally sell for?

Cheers,
Oracle.

 

@oracle - It is a very small market but I would envisage around the 4.5-5% however it may be tigher depending upon what rent could be struck upon exercise of the option (there may be a considerable uplift) but you would have to consider how much room there is for increases considering early bird is $6/day, all day is only $9.

Parking rates

 

What is the asking price $1.8mil?

 

EOI

 

Sounds good, solid returns with minimal maintenance? Depends on selling price though.

 

Rates passed through to lessee? History of back dated rate increases in the ACT. the other consideration is strata risk (e.g. special levies). Hopefully it is separate from the residential strata?

 

Are those numbers adjusted for GST ? Yield at 4.5% excluding GST becomes 4.12%

It never ceases to surprise me how listing agents will use the GST inclusive rent. Also can the property be acquired as a going concern ? This can reduce the cost by 9.09% without affecting yield. And lenders wont lend the GST element of the property cost.

 

Hi Scott did you end up buying this? What will you be watching out for with this kind of
investment?

There are quite a few for sale now in Vic by CBRE with brand new 7 yrs lease but 2% increment
only. Any idea what kind of cap rate and growth rate can be expected?

The issue may be this being land rich and having a large land tax bill.