the facts
105 - 107
MURPHY STREET
RICHMOND
Sold 105-107 Murphy Street Richmond TCI - An in depth look behind the scenes of the campaign. We'll explain the pros, the cons, the challenges and the reveal!
THE PROS
- Exceptional three street frontage land holding
- Long term lease (10 years with two further 5 year options) to one of Australia’s best – Kennards Hire
- Recently renovated in 2022 on new Lease execution
THE CONS
- The property has a substation on the River Street frontage – impacting the potential of a future development
- Slightly lower than market rental tied into long lease term
THE CHALLENGES
- While the long lease created security from an investment perspective – it also meant the property could not be sold to an owner occupier on land/building rates – which was the highest and best outcome
- From an investment perspective, it is likely the market would expect the property to sell for a circa 5% return, which equates to circa $3.25m
- The land/building rate was significantly higher and the key was to emphasise on the long term land bank value of the asset, while having secured long term rental income
- The Lease contained a first right of refusal for the tenant, which also restricted the type of public campaign we could run
THE REVEAL
- To satisfy the requirement of the first right of refusal of the Lease and the request of the Vendor to hold an ‘off market’ campaign, we sourced buyers through our network and held a boardroom Auction. TCI sold the property to an investor for $4,630,000 – which equated a 3.5% return
- Market expectation was approximately 5%
- Final result being 43% above market expectations
the facts
market expectation
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RETURN
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RETURN
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Campaign performance
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PERCENTAGE
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