New Zealand State of the Art Factory up for Sale that Shareholders paid for, page-53

I have sighteda draft of the lease to Keystone Enterprises (NZ) Company Limited for $164,639 + GST per annum net which equates to $128.83/sqm based on the floor area of 1,278sqm (which includes the high clearance awning). Estimated outgoings of $19,738 which are recoverable from the tenant which means a gross rent equates of $184, 377 + GST or $144/sqm. I have no knowledge of the NZ industrial rental market but comparatively to Aus this seems reasonable. With a current exchange rate of 1.10 AUD to NZD this looks even cheaper.

Assuming theabove rent is in line with the market below may give us some idea of what thismay sell for.

Capitalisationsensitivity analysis:

$164,639 @ 5%= $3,292,780

$164,639 @ 5.5%= $2,993,436

$164,639 @ 6%= $2,743,983

$164,639 @ 6.5%= $2,532,908

Convertingback to AUD obviously results in slightly lower figures. The questions as wellfor the shareholder is how big was the mortgage for the property?

Directcomparison on a rate per square metre of building area would be the most appropriatemethod of assessment in this instance as the tenant is a related party to the vendorwith no guarantor apparent. However, I couldn’t find any good sales data freelyin NZ.

Happy to becorrected on any of the above, but I think it proves $7m is complete clown workby our friend Sydney.