MMP212 Property Investment – Trimester 1 2020
Information Memorandum
Detailed Property information
Property Data-to be used to complete Assignments 1 & 2
Background
This data provides the necessary information to complete assignments 1 & 2 and has been derived from actual market evidence but important details have been altered to ensure privacy. You are to use this information as the primary source of information and you should seek additional property specific information-everything you need may not be here! You will however need to source publically available information such as economic and market trends.
You can inspect the external portion of the property, the surrounding area, location and infrastructure etc. using Google Map and other online tools, and provide any information you found online that you believe will enhance your report. However, PLEASE DO NOT ENTER THE BUILDING!
Property
Address– 18-20 Prospect Street, BOX HILL, VIC 3128
Property type– Grade A office
Building and site Particulars–
The site:
The property title particulars are; Title Volume 10652 Folio 536 being Lot 4 on Plan of Subdivision No. 06415A. Estate Fee Simple. The property comprises a rectangular shaped allotment with frontage to Prospect Street of approximately 40.27 metres. The information regarding the land and the planning of the property can be found in the documents attached.
Improvements
18-20 offers dominant frontage to Prospect Street, three level office building of 2,500sqm, with excellent natural light via an internal courtyard / lightwell that allows flexibility for tenants fitouts. Recently refurbished facade, lift and entrance lobby.
Building details:
| Substructure: | Concrete |
| External walls: | Concrete and glazing |
| Window frames: | Aluminium framed |
| Internal walls: | Plasterboard |
| Internal Ceilings: | Suspended acoustic tiling and plasterboard |
| Floor coverings: | Carpet, ceramic tile and concrete |
Zoning
To be investigated and determined by student.
Location
To be investigated and determined by student.
Tenancy Profile– The building is securely leased to three (3) tenants, these are: Eastern Melbourne PHN (EMPHN), Guardian Security Group (GSG) and ABM.
Lettable Area
Ground Floor 815 Square metres
First Level 848 Square metres
Second Level 837 Square metres
Total Area 2,500 Square metres
Tenant and Financial (rental income) Summary
| Level | Tenant | Area Leased m2 | Lease Commence date | Lease expiry | Term & options | Lease Type | Rent Reviews | Current Rental $pa | Cars | Parking rental $pa |
| Ground | ABM | 815 | 15/3/17 | 14/3/20 | 3y+3y | Gross | 4% pa | 330,890 | 25 | 30,875 |
| Level 1 | GSG | 848 | 1/6/18 | 31/5/22 | 4y+4y | Gross | 3.5% pa | 334,960 | 20 | 24,100 |
| Level 2 | EMPHN | 837 | 3/1/19 | 2/1/23 | 4y+2y | Gross | 4.5% pa | 323,082 | 24 | 28,800 |
| Casual carpark | 21 | 20,126 | ||||||||
Estimated outgoings
The following outgoings are estimated for the period 2019-2020 financial year. All expenses are to be allocated to tenants on an area pro-rata basis.
| Item | Amount |
| $ | |
| Statutory Expenses | |
| Land Tax (single holding basis) | 9,800 |
| Municipal Rates | 13,500 |
| Water Rates | 7,100 |
| Building expenses | |
| Air Conditioning | 30,000 |
| Building Liability Insurance | 20,300 |
| Common Area Cleaning | 31,400 |
| Electricity | 12,600 |
| Fire Services/Protection | 5,900 |
| Garden Maintenance | 7,230 |
| Lifts | 14,000 |
| Management/Administration | 73,500 |
| Repairs & Maintenance | 32,000 |
Sales evidence (Used in Direct Cap Method)
Sale 1
| Property: 363-365 Ferntree Gully Road, Mt Waverley | ||
| Purchaser: | Undisclosed | |
| Sale Date: | February 2019 | |
| Sale Price: | $10,750,000 | |
| NOI: | $782,000 | |
| Analysed IRR: | 8.92% | |
| Rate $/sqm NLA: | $4146/sqm | |
| Total NLA: | 2,593 sqm | |
| Car Parking: | 106 | |
| Parking ratio: | 1:24 (of NLA) |
The property is located on the north side of Ferntree Gully Road in the suburb of Mt Waverley, being 18 kilometres east of the Melbourne CBD. Exposed position adjoining a number of similar commercial and industrial buildings. The property comprises two freestanding buildings separately titled, with a central driveway. The fitout includes two office levels in good condition, circa B grade.
The property is leased to two tenants, Westpac (on a 10 year lease expiring in November 2022) and 7-Eleven (on a 5 year lease expiring in August 2020), returning a total net income of $782,000, which is slightly above market levels. WALEx of 5.76 years. Outgoings are estimated at $65psm.
Sale 2
| Property: 753 Doncaster Road, Doncaster | ||
| Purchaser: | Undisclosed | |
| Sale Date: | January 2019 | |
| Sale Price: | $5,000,000 | |
| NOI: | $340,000 | |
| Analysed IRR: | 8.95% | |
| Rate $/sqm NLA: | $3448/sqm | |
| Total NLA: | 1,450 sqm | |
| Car Parking: | 50 | |
| Parking ratio: | 1:29 (of NLA) |
Description
Two level Grade A office building constructed in 2002 with ground level entry. A walk-up building with stairwell access to all levels including basement carpark. Two tenants occupying a whole floor each. At time of sale, the NOI was $340,000 pa (including car spaces which are $100 per par per month each). The WALEx is 2.1 years. Outgoings estimated at $68psm.
Sale 3
| Property: 552 Blackburn Road Doncaster | ||
| Purchaser: | New Haven P/L | |
| Sale Date: | February 2018 | |
| Sale Price: | $5,800,000 | |
| NOI: | ||
| Rate $/sqm NLA: | $3,108/sqm | |
| Total NLA: | 1,866 | |
| Car Parking: | 42 spaces | |
| Parking ratio: | 1:44 (of NLA) |
Description
A modern two level Grade A office building built in 2003, with a front entrance from Blackburn Road having lift access to all floors including basement parking. Occupied by 5 individual tenants returning a total rental income of $734,210 per annum (including car park) with a WALEx of 3.5 years. Outgoings are $85psm.
Sale 4
| Property: 37-41 Prospect Street Box Hill | ||
| Purchaser: | Overseas investor | |
| Sale Date: | October 2018 | |
| Sale Price: | $13,800,000 | |
| NOI: | ||
| Rate $/sqm NLA: | $3,242/sqm | |
| Total NLA: | 4,256 | |
| Car Parking: | 130 spaces | |
| Parking ratio: | 1:32 (of NLA) |
Description
Modern 5 level Grade A office building with 2 lifts and basement car parking. Leased to multiple tenants including NAB, Loscam and Serco Global Services. Leased floor area has a WALEx of 1.6 years by income and outgoings of $56 per sqm. Total rental income is $1,465,714 per annum (including carpark). 3 Star NABERS rating.
Sale 5
| Property: 290 Tram Road Doncaster | ||
| Purchaser: | Australian Super | |
| Sale Date: | December 2018 | |
| Sale Price: | $8,250,000 | |
| Cap rate: | 8.00% | |
| Rate $/sqm NLA: | $3,882/sqm | |
| Total NLA: | 2,125 sqm | |
| Car Parking: | 85 spaces | |
| Parking ratio: | 1:25 (of NLA) |
Description
Modern three (3) level Grade B office building with floor plates of approximately 700 sqm constructed in 1998 with basement car parking access via rear of building. Three (3) tenants each occupy a whole floor and an overall rental income of $830,000 pa. The WALE is 4. 5 years and with annual CPI reviews. All leases are net with outgoings estimated at $80 per sqm pa.
Leasing evidence (market rent benchmark)
| Address | Comm. Date | Term (yrs) | Reviews | Out’s $m-2 | Gross Rental p.a. | Area | Cars | Parking Rental $pa |
| 883 Whitehorse Road Boxshill | Mar-19 | 3+3 | 3.5% | $65 | $440,500 | 1,150 | 25 | $33,050 |
| 1/1006 Doncaster Road, Doncaster | Apr-18 | 10+5+5 | 3.75% | $60 | $135,157 | 305 | 10 | $14,000 |
| 2/1006 Doncaster Road, Doncaster | May-19 | 3+3+3 | 3.25% | $60 | $70,742 | 162 | 5 | $6,200 |
| Suite 11, 37-40 Prospect Street Box Hill | Jul-18 | 5+5+5 | 4.0% | $48 | $105,376 | 232 | 6 | $7,688 |
| Suite 3, 1020 Doncaster Road, Doncaster East | Jun-19 | 3+3 | 3.0% | $48 | $80,103 | 200 | 6 | $7,616 |
| Suite 4, 12-15 Prospect Street Box Hill | Sep-18 | 10+5+5 | 3.5% | $47 | $68,584 | 170 | 4 | $4,968 |
| 667 Tram Road, Doncaster | Aug-18 | 5+5 | 4.0% | $90 | $240,443 | 555 | 14 | $16,900 |
| Suite 1, 6 & 7, 5-9Prospect Street Box Hill | Sep-19 | 10+5+5 | 3.0% | $45 | $260,913 | 612 | 16 | $19,400 |
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