I've noticed over the last couple of weeks big advertisements for buying retail and office units in a new development in Cremorne in Sydney. While I'm not looking to buy there or at this moment, I am generally interested in commercial property possibilities.
The complex is on Military Road (the main drag there) and properties range from affordable ($200K or so) up to a couple of mil. The retail properties seem to be leased already, but I'm not sure about the office ones.
The ads state a net return of 5%-7%. I'm just wondering if that would be considered reasonable for commercial property of this type. And would "net" return be after all likely costs (except personal borrowing) or just after their management fees? I gather tenants pay the outgoings, but there must still be insurance and other costs involved.
I'm just interested in thoughts on whether something like this could be a good investment or unlikely. Military Road can be a very busy road, and it says there's reasonable parking, but without spending more time there, I'm not really sure how popular a shopping area it is or what sort of vacancies shops and offices have there.
GP
The complex is on Military Road (the main drag there) and properties range from affordable ($200K or so) up to a couple of mil. The retail properties seem to be leased already, but I'm not sure about the office ones.
The ads state a net return of 5%-7%. I'm just wondering if that would be considered reasonable for commercial property of this type. And would "net" return be after all likely costs (except personal borrowing) or just after their management fees? I gather tenants pay the outgoings, but there must still be insurance and other costs involved.
I'm just interested in thoughts on whether something like this could be a good investment or unlikely. Military Road can be a very busy road, and it says there's reasonable parking, but without spending more time there, I'm not really sure how popular a shopping area it is or what sort of vacancies shops and offices have there.
GP