A mate is offloading his commercial IP & offered it to me - I'm not interested, but it seemed like a reasonable deal.
It's a grocery store in a small town within reach of Sydney - population 2500. The tenant is 2 years into a 10+5+5+5 lease.
It yields 10% on the asking price of $900K. with increases annually at CPI. All outgoings are paid by the tenant, so the 10% is nett.
The established grocery is the main one in the town, it's weekly turnover is $55K-$65K so seems like a business that is unlikely to disappear in hard times.
Is 10% yield increasing at CPI reasonable in todays environment ?
It's a grocery store in a small town within reach of Sydney - population 2500. The tenant is 2 years into a 10+5+5+5 lease.
It yields 10% on the asking price of $900K. with increases annually at CPI. All outgoings are paid by the tenant, so the 10% is nett.
The established grocery is the main one in the town, it's weekly turnover is $55K-$65K so seems like a business that is unlikely to disappear in hard times.
Is 10% yield increasing at CPI reasonable in todays environment ?