Commercial Investment in Canterbury

[Malcolm1]

Not too sure if this would be allowed on this forum, but please delete if that is the case....
We have recently put our investment property on the market:

https://www.waimakrealestate.co.nz/investment-for-sale/canterbury-wre12585

Would be interested from followers of this forum what their thoughts are about value and what useful clauses should be included in the S&P Agreement?
Recently upgraded building to 67% & above NBS, 25 yrs left on lease if all renewal options taken, $165,000 rent plus GST plus Opex, hotel business going very well, estimated at $3.5m T/O ( we use to operate the business until 2015), great location, excellent lease conditions, repaint every 9 years and iconic business & buildings.
Interested in your thoughts.....thank you Malc...

[JBM]

For me would Depend on many of the finer details like around the lease how long of fixed period and reviews on lease is their a fixed ratchet cause or CPI adjusted per year or every 5 etc .. would be all about funding for me so the numbers would have to stack up .. I,m sure if the yield ratio to price was attractive wouldn’t be hard to secure a buyer

[Anthonyacat]

Looks nice! I'll give you $750k for it right now, unconditional. PM me.

Seriously though (well, actually, if you're keen I was 100% serious) you just need to work out what yield you'll sell on. The lease terms are important, as above ratchet and/or CPI/market reviews when? Surely your real estate agents are helping you with this?

Usually, $165k net rent in a medium sized city (I don't know much about Rangiora) I'd be surprised if it sold outside the range of 6.5% - 10% yield, which would be $1.65-2.5M. But then there's also a whole bunch of undeveloped land which might add value for the right buyer.


Genuinely, I'd love to own this. It's like my dream commercial investment. But not sure it's the right time for me in terms of finance. Why are you selling up - and would you consider selling down just part of it and retaining some ownership?

[JBM]

Yes now having another look some great land to develop around the property could well sell at a much lower net yield 5% etc because of this ... also wish I had a spare million sitting in the bank as a really great property I actually visited with some friends from the area last year .