Going Commercial

westminster said:
China
send your money over to the wild wild West

8.4% http://www.realcommercial.com.au/property-offices-wa-perth-500799651
8.5% http://www.realcommercial.com.au/property-offices-wa-perth-500826835
7.5% http://www.realcommercial.com.au/property-offices-wa-perth-500833343


How about the management rights to a resort in Mandurah?
http://www.realcommercial.com.au/property-hotel+leisure-wa--500737987
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Looks like CBD yields in Perth CBD are much better than Sydney CBD. As a total novice, I am hesitant to try anything far from home and cannot visit readily. I know this is illogical as an investment concept but that's just my way of thinking. Whereas, I know various areas of Sydney very well and can ascertain vacancy rates, tenancy demand easily. But I appreciate your kind input. If I lived in Perth, I would most likely be taking a much closer look at the above properties.
 
china said:
Looks like CBD yields in Perth CBD are much better than Sydney CBD. As a total novice, I am hesitant to try anything far from home and cannot visit readily.
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It comes down to risk: Perth IS a country town, country towns have a higher risk profile esp if largely dependent upon a single industry (eg mining), choice of tenant is smaller etc...
 
Scott No Mates said:
It comes down to risk: Perth IS a country town, country towns have a higher risk profile esp if largely dependent upon a single industry (eg mining), choice of tenant is smaller etc...
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That's a good point about risk.

That's why commercial property has a higher return- it does have a higher risk.

China is a very conservative person financially, and appears quite risk adverse- having been bitten before. That's partially why I'd suggest he look at resi rather than commercial. The returns may be smaller, but if a comm property loses a tenant it could be vacant for some time.
 
With China's resources he could easily buy a $5m commercial property - which gets you pretty good sites. That would be my pick rather than wasting time with the $1m stuff in Sydney metro.
 
Scott No Mates said:
This is in the middle of no mans land on Hay St. Great street but wrong position- not Subiaco & not quite CBD, hence may be a risky proposition. (I didn't check on proximity to the train line).
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No mans land?

obviously it isnt subiaco, not quite sure the relevance of that though. It is actually a pretty good spot but imo these were all over priced when originally sold at around $9000-10000/sqm.

you also need to learn more about perth (and possibly refrain from posting about it until you do) if the corner of hay and barrack isnt CBD to you.
 
sanj said:
No mans land?

obviously it isnt subiaco, not quite sure the relevance of that though. It is actually a pretty good spot but imo these were all over priced when originally sold at around $9000-10000/sqm.

you also need to learn more about perth (and possibly refrain from posting about it until you do) if the corner of hay and barrack isnt CBD to you.
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Sanj - I am just stating the obvious, not a prime possy and over priced.
 
coastal said:
Why not buy a Medical Centre Mr China?
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Client of mine is a Doctor at few hospitals along with private practice, he is looking to purchase a commerical property to move his private practice into then will also lease out the rest of the property to his other doctor friends :)
 
Brady said:
Client of mine is a Doctor at few hospitals along with private practice, he is looking to purchase a commerical property to move his private practice into then will also lease out the rest of the property to his other doctor friends :)
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This is one of the few cases where a person can use an SMSF to purchase an asset which they can also use.
 
Aaron_C said:
With China's resources he could easily buy a $5m commercial property - which gets you pretty good sites. That would be my pick rather than wasting time with the $1m stuff in Sydney metro.
Click to expand...

This would mean all eggs in one basket. My PPOR, my cash, and big borrowings all on one 5m site. The 1m situation allows me to test the waters and if it is too chilly, I should not be too damaged.
 
Last edited:
http://www.realcommercial.com.au/property-medical+consulting-nsw-crows+nest-500439655

I found one at a better price point and higher yield in about 5 minutes.


china said:
I missed out on one recently - in Concord, near sydney cbd. Average yield about 7% but should have good capital growth potential. And very stable and long term tenants. And I knew the area well, having worked there for a couple of years. Ticked all boxes for me.

http://www.realcommercial.com.au/property-retail-nsw-concord-500757963

And I havent been able to find something similar ever since
Click to expand...
 
china said:
This would mean all eggs in one basket. My PPOR, my cash, and big borrowings all on one 5m site. The 1m situation allows me to test the waters and if it is too chilly, I should not be too damaged.
Click to expand...

A $5m site is a hefty investment however as for risk, you are probably looking at a multi-tenanted building. So unless the lease expiry profile is skewed to a particular time (exposing you to several possible concurrent vacancies), then you are also able to spread/lessen the vacancy risk.

Once you get above the $2-3M mark, the number of bidders thins out substantially and these are too small to attract the attention of decent sized syndicates or property trusts who will generally seek assets over $10m.
 
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