[SYDNEY] Even in a Hot Commercial Market: there are still deals slipping between the cracks!

Discussion in 'Commercial Property' started by Chabs, 22nd Jul, 2018.

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  1. Chabs

    Chabs Well-Known Member

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    Freehold commercial properties are a hot commodity right now. Residential freestanding properties with yields over 4.5% are also unheard of, even with the cooling market. Throw in a low % of building to land ratio and you'd expect the market to love the type of product, right?

    This recent sale is a big surprise, as it seems to have gone for a cheap price!

    114-116 Bungarribee Rd, Blacktown, NSW 2148 - Property Details

    This property shows up under residential real estate searches, small wonder I missed it being for sale, may have been an interested buyer!

    Went pretty cheap, at $2 300 000 contract price and assuming the rental numbers are reasonably accurate, also assuming that the overheads are approx 0.6-1% p.a. this went for cheaper than most equivalent commercial sites are going!

    Working on 5% cost of funds, this property is close to neutrally geared at 105% theoretical LVR. Great example of a set & forget in the current market and plenty of upside. Essentially sold for land price with the rent paying off the cost of ownership.
     
  2. Chabs

    Chabs Well-Known Member

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    Currently hitting myself over the head for not seeing this one for sale.. but then remembering why real estate is a good investment class, lots of room in an inefficient market with the REA not marketing this through correct channels..

    So many prospective commercial buyers like me would never have seen this.
     
  3. Chabs

    Chabs Well-Known Member

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    Agent was in auburn , really have to dig deeper and search in unexpected places, lessons learned..
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    More effort put into the residential site than the CIP.

    Another great example of where having an out of area agent works to the buyer's advantage.