Insights —
with vision

Tuesday, 19th April 2016

$6.15 million profit in two years

Client Success Story

Prosper Group assisted their client in making a 58% profit or $6.15 million in two years.

How was this done?

Acting on behalf of their client Prosper Group;

• Sourced the property as an off market transaction, meaning their client didn’t have to compete against other buyers in the market.
• Using their negotiation skills and experience a price reduction of $1 million was achieved.
• Thoroughly analysing the property during the exclusive due diligence period meant their client gained the satisfaction that there were no major issues with the property.
• Handled the Asset Management for the property to maintain and achieve its highest and best value in its current form.
• Closely monitoring the market and identifying that the development market was at the high end of its cycle, therefore presenting an opportunistic time to sell and realise the properties highest and best value.
• Managing the entire sales process which included negotiating directly with developers who were approaching the vendor, and appointing the appropriate sales agent and managing the entire campaign to achieve the highest possible sales price

Original purchase details;

• Purchase date; November 2012
• Original asking price; $11.6 million
• Purchase price; $10.6 million
• Yield; 6.5% passing yield, and 10.2% fully leased net yield
• Capital value;$3,595/m2 (floor area), and $7,749/m2 (land)

Final sale details;

• Sale price; $16.75 million
• Yield; 4.4% passing yield, and 7.1% fully leased net yield
• Capital value;$5,680/m2 (floor area), and $12,245/m2 (land)

The property;

• Modern 4 storey office building with north facing balconies and 2 levels of basement car parking.
• Total floor area is 1,368m2.
• Total land area is 2,949m2.
• The B4 mixed use zoning allowed for a maximum FSR of 6:1 and a maximum height of 80m.

The tenancies;

• The building was 72% leased to 4 tenants.
• The upper floors had full floor tenants and the ground floor had two tenancies.
• One of the upper floors was vacant at the time of the final sale.
• The estimated fully leased net income was $1,190,279

The location;

• The property backed onto the Parramatta River recreation area.
• Located 50m from the Parramatta river cat terminal and 750m from the Parramatta train station.

Client testimonial: "During 2011-12, I commissioned Prosper Group to find a multi-tenanted commercial building for investment. Following many months of patient search and negotiation I eventually bought an attractive property with long term future development upside in October 2012. Detailed and patient due diligence process assured me it would be a good medium-long term hold. Proper Group managed all aspects of the purchase, ongoing management, and advised on the subsequent sale. During the next few years the boom of conversion of commercial sites to residential apartments rapidly grew.  After many unsolicited enquiries and offers we decided to openly market the site. This was advised by Prosper Group and resulted in my accepting a very attractive offer with a delayed settlement. Also in late 2012 through Prosper Group I bought another multi-tenanted commercial property with the same objective and criteria.  Planning changes in this area have now created significant capital gain that will be realised in 3 to 4 years.  In April 2009, Prosper Group further assisted me in buying a large single tenanted industrial building that has been an excellent well performing investment. I have great faith in Prosper Group’s service, and would highly recommend them to anyone seeking an independent and professional service. I will certainly be using them in the future."

R Glasson