A fully-tenanted property, comprising one house and 14 flats and zoned for business usage, that has become available in George is expected to generate considerable interest amongst potential investors.
Bryan de Beer of Lew Geffen Sotheby’s International Realty, which has been mandated to market the property, says “Opportunities of this nature are relatively rare. The asking price for the property, which is situated in Merriman street, is R6,5 million (excluding VAT) – a considerable discount to the replacement cost. More importantly, all the units are currently subject to renewable leases, thereby providing the new owner with a guaranteed income and return on investment.”
The total size of the erf is .?2168m The house, which is , and?currently let as a ‘backpacker’s lodge’ is 163m .?each of the 14 flats is 74m The house is currently let for R5 000 per month and each of the flats for R2 800 per month.
“At the current rentals,” notes de Beer, “the income for the property amounts to R44 200 per month, or R530 400 annualised. Assuming realistic costs of R79 662 each year in respect of administration, insurance, maintenance and rates, the net annual income of R450 738 represents an initial yield of 6,9% on an investment of R6,5 million. Assuming a 10% increase each year in rentals, monthly income will rise to R48 620 in 2008, R58 830 in 2010 and R71 184 each month by 2012.”
“The property is in good shape and has ample parking. It will appeal to investors requiring an immediate and good return on their investment, and to those who might wish to utilise the business rights and develop the property further,” he concludes.