Transaction analysis from acquisition to disposal

Acquisition Disposal
Purchase Price $7.9 million $10.6 million
Sale Date May-14 May-15
Net Yield 6.2% 4.9%
NLA Rate $7,328/m² $9,838/m²
Site Rate $12,098/m² $16,232/m²
WALE 1.5 years 4.6 years
Past performance is not an indicator of future performance.

Overview

The asset is a modern building comprising six retail shops, three office suites and basement parking for 19 cars in the heart of the famous Armadale retail strip.


Background and Opportunity

Prior to acquisition, High Street’s retail vacancy levels were well over 10% and four or the six retail tenants had confirmed they were vacating within 12-months. Despite huge lease risk, Bayley Stuart was confident High Street was attractive at an affordable rental level, and we could present these shops more effectively than competing surrounding stock to secure a good mix of new tenants.

We were drawn to the ability to provide enhanced returns via leasing success and multiple exit strategies, particularly as the asset was already strata titled, providing the ability to sell shop by shop if any delays occurred in securing new tenants.


Project Strategy

Reposition asset via intensive leasing and management.


Target IRR

27.0% p.a.


IRR Achieved

36.4% p.a. (12 month project timeframe)