CASE STUDY
25 MAHINUI ROAD, FIELDING
PROPERTY OVERVIEW
The property is made up of substantial buildings and spare land. At time of purchase in late 2021, the property was very under-rented, and a new lease was put in place in October 2023.
The land area is 15,565sqm and the buildings and land were purchased at $218/sqm, when land only is selling at $200-250/sqm.
The surplus land of 2,500sqm, is presently being sub-divided and is for sale.
The property is valued considerably less than what its replacement value is, and over time it has substantial upside.
TENANCY OVERVIEW
The tenant is a long-established manufacturer of Fibreglass products and has been at the site since 1978. In that time the company has put a significant investment into the property.
LEASE DETAILS
The new lease (October 2023) meant a significant increase in rent and the lease has annual increases to take it to market rent in 2027.
Rights of renewal (five years): 1 October 2027 and 1 October 2032.
Expiry: 30 September 2037.
Purchase price October 2021: $3,230,000
Land area: 15,565sqm
Floor area: 4,802sqm
Equity 60%: $1,938,000
Debt 40%: $1,292,000
Initial rent net: $180,000
Present rent September 2023 net: $234,789
Ongoing expenses: Outgoings by Tenants
Valuations (building and separate land):$4,050,000
Capital return: $820,000
Return on equity excluding dividends from positive cashflow: 42%
Increase in value - building under two years: 25%
Insurance building replacement valuation: $8,099,000
Land value (estimated): $2,801,700
Total replacement value (land and buildings): $10,900,700