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)