St Laurence has no problem with tenants in new offer
St Laurence has rolled out a new proportionate ownership scheme for a building in Wellington which should have no problem with the tenants.
Wednesday, November 16th 2005, 6:16AM
The building in Wakefield Street is going to be the new offices for the St Laurence Group.
St Laurence has a contract to purchase the for $4.5 million, and it plans to package it up as its eighth proportionate ownership scheme.
St Laurence managing director Kevin Podmore says the offer will provide a cash return of 8.25% per year, paid quarterly. St Laurence will lease the entire building for an initial six year term commencing upon settlement with two rights of renewal of 3 years each, which if exercised mean the lease expires on 14 December 2017.
A total of 120 interests each of $25,000 are on offer; investors may purchase one or more interests in the scheme.
The $3 million raised, together with $2 million of bank debt, will be applied to purchase the property, and fund the establishment costs of the scheme as well as the $250,000 of improvements required by the tenant.
St Laurence structured the investment opportunity as a proportionate ownership scheme in order to minimise upfront costs and pass on the depreciation benefits to investors.
Podmore sees continued interest from investors in proportionate ownership investment opportunities. As a consequence, St Laurence is now actively seeking properties within the $3m to $10m bracket.
“Having established a reputation for this type of direct property investment, St Laurence benefits from a number of ‘off-market’ opportunities.
“Essentially we are providing opportunities to a number of investors, through this type of structure, to participate in the ownership of a commercial building without the necessity for outright ownership. Investors cannot only diversify their risk but also benefit from our property acquisition and property management experience.”
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