commercial/industrial yield in christchurch

[sam green]

hi,

we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

thanks guys
sam

[Malcolm1]

CHCH yields

hi,

we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

thanks guys
sam

Hi Sam, for valuation purposes 6% seems abit light around CHCH presently, with plenty of stock available.

[Rosco]

hi,

we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

thanks guys
sam

Why would you buy this?

Bank will require the loan to be repaid over 10-15 years, which will suck all your cash and you will likely have to put in money.

6% is quite low and doesn't give you any room for upside. The yield depends a lot on the term of the lease and property and could be a lot higher than 6% (ie lower value for the property).


Why not try to find something where you can add value?

I would also ideally like multiple tenants to reduce the risk?

Is there earthquake issues?

Ross

[nick000]

The cap rate will depend on where the property is. If it's Bromley you'll want a larger cap rate. Industrial generally at the moment is closer to 7%

[JBM]

hi,

we're considering buying our first commercial property. it is a small unit under 500k, half garage/workshop and half office or showroom. it is a unit title property (with one other.)

for valuation purposes, should we be looking for a yield of around 6%? presume this is worked out on the gst-excluded rental figures?

thanks guys
sam

Personal would have to be one very prime well built commercial property for me to be happy with 6% yield ....unless potential to increase yield
without much capital outlay