the facts

the hampton retail collection

SHOPS 1 - 4, 427 HAMPTON STREET

hampton

Sold 427 Hampton Street Hampton 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

Located on Hampton Street, Hampton – one of the Bay’s best lifestyle strips
Close proximity to Hampton Beach
Low interest rates
Food and lifestyle tenancies were in a market strong point – potentially the strongest
Security of brand new, long term leases to known tenants
Brand new property, construction had not completed yet – providing full depreciation benefits and full benefit of lease term
One shop was offered for sale with vacant possession
This is a buy and sit for the tenanted shops – with no concern for the following
- Maintenance
- Loss of tenant
- Loss of rent

THE CONS

Property is a strata title, hence limited growth in comparison to a free standing title
The base build, nor the fitouts were complete – Purchasers were paying a completed price i.e. a fully functioning and fitted out tenancy, for a raw shell and depended on the tenant, completing said fit out
Price in comparison to other strata titles, or a free standing title, was high
The leased were negotiated by Savills – the rents were on the low side and locked in for considerable time frames

The Facts Sale Hampton Retail Collection 427 Hampton Street Hampton Retail Hampton Investment Commercial Real Estate TCI

The Facts Sale Hampton Retail Collection 427 Hampton Street Hampton Retail Hampton Investment Commercial Real Estate TCIv

THE CHALLENGES

There were two major challenges in this campaign – the price and the nature of what we were selling i.e. unfinished retail shells
Discussions on price centered on the following
- Marketing the location as the best the Bay had to offer
- Reinforcing this by identifying the best specialty, national and multinational nearby tenants
- Security of long term leases, allowing a sit and wait approach to property investment
Discussions on the building condition centered on the following
- Providing confidence to buyers in the builders capacity to complete – the builder was the developer, who had completed many projects previously, without issues
- Highlighting the development was in the final stages, with completion due imminently and fitouts thereafter
- Highlighting the strength of each tenant, with example of their other locations, providing confidence in their ability to complete their fitouts

THE REVEAL

After a short campaign on market, TCI sold all shops for the following. Shop 1 was sold with vacant possession, while Shop 2 and Shop 3 & 4 were sold tenanted
- Shop 1 $1,100,000
- Shop 2 $1,100,000
- Shop 3 & 4 $2,150,000
Which represented the following
- Shop 1 $8,462 per m²
- Shop 2 $8,271 per m² or a 4.5% return
- Shop 3 & 4 $8,175 per m² or a 4.2% return
Final result being 17% above market expectations
The sale of Shop 1, highlighted the undervalued rents
That is, we sold Shops 1 as a raw shell, with no leasing incentive provided to a tenant, for the same as Shop 2, which was fully completed and the tenant was provided a leasing incentive

the facts

the hampton retail collection

SHOPS 1 - 4, 427 HAMPTON STREET

hampton

THE PROS

THE CONS

THE CHALLENGES

THE REVEAL

the facts

market expectation

return

return

higher

Campaign performance

PERCENTAGE

PERCENTAGE

RETURN

market average

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

sold 427 hampton street

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