Northlakes Commercial?

[klublok]

I hear from the grapevine that there are commercial properties in North Lakes here in Brisbane with yields of around 12%. Tenants are government departments with 3 x 3 x 3 options.

Thought that was a good start, I investigated on the net but found nothing. Anyone else heard about this sort of stuff?

Is North Lakes a good place? I know it was up and coming a few years back - am I too late for this?

Also what other expenses should I be aware of - I know that when tenants move out in commercial premises there is usually a fit out period for the next tenant - is the landlord paying for that?

Thanks

 

[WinstonWolfe]

klubok, I looked at health services there a few years ago. I wanted to lease with option to buy or buy outright. With qld health building a day center, and a small private hospital, there were multiple opportunities. Though things have moved slow.

In 2004, Westfield offered me $100 /m2 above the bistro but they were desperate. I didn't take it because visibility and access were an issue.

In 2007, the medical centre near the library wouldn't sell a unit to me and he was asking $500 /m2 to lease.

Emmanuel Drivas (Coffee Club) owns the little centre with the takeaways, dvd, and dentist. He was asking $500/m2 in 2006.

Spoke with Jane Garwood (evergreeen lifestyle centre 12-18 discovery drive) in 2006 but didn't agree her vision for Northlakes had the same potential as the Gold Coast and Noosa. 8% yields there now.

Maybe if you get a govt dept and 11 stories, you can get 11%. or maybe the valuations have tanked.

I'd have a very close look at the demographic for the area before buying into the hype.

 

[klublok]

Thanks WinstonWolfe

I think it is because the valuations have tanked. I hear that they were getting around $450/m2 which means that even if you borrow 100% you are positively geared from day 1.

As you said, I was worried about the demographic and whether I have missed the growth run - although couple of clients in the large scale development game started drooling when I mentioned the above to them ...

Is it true that you can pass some of the fitout costs to the tenant under the terms of a lease?