Hello all
With increase of land values by up to 30% over the last two years in industrial/commercial areas such as Osborne Pk, Kewdale, Malaga, Welshpool it is now difficult to get a good return (10%+) unless you have big $.
I spotted a Commerical property on the market recently in Karratha at $205,000 (90 sqm) returning 10.5% 3x3x3 lease solid – with Government Department.
Would like to receive comments from formites who understand this market in Karratha, purchased commerical/ind property. Cheers
Hi Marisa,
Karratha is similar to Port Hedland in that Govt leases are great long term (as long as you don’t jerk them off), but, with wildly fluctuating populations you are exposing yourself to greater risk. I know that there is some development going on in Karratha at the moment 9not sure how long it will last) and that is where you make big dollars (if it is desired by the building companies).Do you go and find private tenants and miss out on the long term Govt lease? I don’t know. I like to Govt thing because it gives stability (and it iscertain for the time of the contract!). My opinion.
How do the numbers stack up?
Cheers
C@34
Hi C@34
Thanks for your reply, not sure
What do you mean by “if it is desired by the building companies”?I have a contact who will assess property, he is a valuer in Karratha and I guess the risk will be dependent on this information, lease agreement, stats.
Thanks for feedback.
Cheers, Marisa[biggrin]
Marisa,
What are you calling big $ ??
The suburbs you mentioned in Perth currently have many preoperties that I am evaluating that screen very well.
I am reluctant to look at Karratha as there are too many good deals down here.
My only hurdle is the bank….in terms of properties, there’s oodles that qualify.
Cheers,
Dazzling
“Go hard or go home”
Hi Dazzling
Around $500,000 +.[confused2]
Do you purchase without a lease in place?
Cheers, Marisa
Generally speaking no…however,
In the middle of settlement process with a Steptoe and Son type industrial place that has 6 units on it…The vendors occupy 2 units – obviously no lease there, 3 are on verbals agreements only and have been for the past 15+ years….joy – I’m looking forward to introducing them all to the reality of formal, written industrial leases…and the 6th is on a lease that isn’t worth the paper it’s written on.
Picked the place up for less than land value…so not too concerned, so actively applying this problem/solution thingy…still yet to be convinced there is actually a profit at the end of the rainbow though.
Cheers,
Dazzling
“Go hard or go home”
Hi Marisa,
Sorry it took so long to get back to you (I have been busy at work – surprisingly).
“if it is desired by the building companies”?this is a bad chioce of words. I was reffering to the construction companies involved in the development of Karratha. As in companies that build pipe-lines and Mining sites – Harbours for Iron Ore exportation, etc.
Hope that clarifies my earlier post and, subsequently makes it helpful.
Cheers
C@34
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