Property with Telstra telecom tower lease

Hi guys, I’m interested in buying a 40-year-old house in the Hills District as IP. There is a 20+ meters tall Telstra 4G tower at the front of the property. The property has about 600 sqm usable land size. Telstra is leasing the 25 sqm land for $25K pa with 3% increase pa. Telstra also has the option to renew the lease every 5 years and it is unlikely that they will be moving away in the near future

The property is selling for $1.45M, which is about 10-15% cheaper than others for obvious reasons. The agent is confident finding tenants for $500 per week (would be $600-650 normally).

I have researched other similar properties in the area with Telstra tower. The tower certainly devalues the properties by 20%. However, it seems that the CG of these properties could still reach the suburb average.

I'm attracted to the high yield generated from the Telstra lease but concerned about the long-term implications. I was unable to find much information about this topic online or on this forum

I was wondering if anyone has any experience, info, advice, suggestions could share some thoughts on whether it is worth buying as IP?

Thanks in advance.
Colin

 

@Astraclassic - very unusual for a Tower to be located on a residential block - drop me a PM as it's a very specialist area of property.

You will find more on the topic under commercial.

 

If you are buying for the long term (over 20 years), I am pretty sure tower wouldn’t be there. Telco is destined to move to satellite which would kill traditional cell towers. Last I checked, Elon Musk’s SpaceX was in public beta which means it’s now publicly available anywhere in Australia.

 

At least you won't get any 5G conspiracy theorist tenants.

 

It's better than a granny flat - they don't use water/have any shared services, their problem if they lose the keys, don't require additional access, small loss in rent on the house but you pick up an extra $500/wk for a 0/0/0 ground lease.

 

Hi, any ideas on who to approach to see if your land is suitable for a mobile phone tower? There seems to be lots of companies that will negotiate and buy leases, but I can't find how you can approach a telco to get one built and land leased intially. Thanks.

 

@Sosey

• Where's the site?
• What's it zoned?
• What's the elevation?
• How large an area is available?

 

Bruce Willis is the vendor ?

I wouldnt choose to buy a property cheaper for a tower. Its like considering absestos filled land. Its cheaper for a reason. You will always lose 20% of the enhances value OR MORE

1. If it double in value you lose 20% of the doubled valoe OR
2. In tight markets it will be hard to move. In boom markets anything sells. Outside this you must drop your pants to encourage buyers...
3. Lower valuation for finance ?
4. Access and alteration rights. That tower will get taller, bigger and uglier over time.
5. Tower usually have a "machine room"that includes a small insulated shed/cabin and a/c. Cables and lead-ins run out and up the tower. Its 24/7 acecess and noise issues ?
6. Tower wont go to satellite. Towers can be upgraded ie 6G, Netflix data transmission ? 5G, 4G and other spectrum licenses. Towers are cheap to add another antenna. eg Voda/TPG, Optus etc. They are obliged to share them and not install new towers. Satellites cost a mint. They cant be updated. Its one major concern with Starlink.

 

Yeah but nah!

It's a specialist investment field & not for the faint hearted. It can be quite lucrative if you understand what you're buying (some major restrictions on the land & an understanding of the Telco Act) & who's leasing it.

It can enhance yields substantially not reduce them unless you negotiate a dud deal.