Investment Analysis for Properties in Queensland, Australia

Running head: INVESTMENT ANALYSIS
Investment Analysis
Name of the Student:
Name of the University:
Authors Note:

INVESTMENT ANALYSIS
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Contents
Introduction:....................................................................................................................................2
Market analysis:...............................................................................................................................2
Investment analysis:.........................................................................................................................8
Conclusion and recommendations:................................................................................................23
References:....................................................................................................................................26

INVESTMENT ANALYSIS
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Introduction:
The two properties selected for the purpose of analysing the possibilities of investing in these
properties from the point of view of an investor are both situated in the state of Queensland,
Australia. First property to be analysed for the purpose of investment is 4503/71 Eagle Street,
Brisbane City QLD 4000 and the second property is situated at 222 Margaret Street, Brisbane
City QLD 4000.
The first property, 4503/71 Eagle Street, has a total floor area of 1,200 square meter is situated
near the Brisbane Metro makes it a hot property for the investors. Second property located at 222
Margaret Street is relatively small property with a total floor area of 500 square meter. However,
the biggest difference between the two properties is the facilities available in 4503/71 Eagle
Street are significantly more than the facilities in second property (Dwomoh, 2018). Taking into
consideration the market condition in the Queensland for similar properties a detailed analysis of
the two properties from the perspective of an investor is provided below.
Market analysis:
The market analysis of the property situated at 4503/71 Eagle Street is conducted below using
the following data table about the property.
Property 4503/71 Eagle Street, Brisbane City QLD
4000
Address of the property 4503/71 Eagle Street, Brisbane City QLD
4000

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Queensland
Type of property Rental property
Property area in square meter : 1200 Square meter
Property cost $28,000,000
Number of years for the analysis 5
Rate of inflation 6%
Expenses expected to be reimbursed
Maintenance $5.00 Per square meter
Property tax $12,000 per yr.
Property Insurance $15,000.00 per yr.
Utilities $15.00 Per square meter
Administrative expenses $20.00 Per square meter
Expenses (It is not to be reimbursed)
Management expenses 5% of Annual gross rent

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Terms and conditions
Market Rent $3,000.00 Per square meter
Capital improvement expenses $25.00 0
Tenancy period 5 years
Assumptions for resale at the end of year 5
Cap rate applicable for terminal value 12%
Commission on resale 5%
Market rate of interest (to be used as cost of
capital)
12.00%
As per the available information about the above property it is expected that the annual rent of
$3000 can be charged per square meter from the tenant. It has been assumed that the rate of
inflation is 6% per annum and the operating expenses have to be adjusted using the inflation rate
to calculate the cash inflows and cash outflows from the property. The property insurance is
expected to be $15,000 per annum along with property tax of $12,000 per annum. Both these
expenses are fixed and will remain so over the course of the next five years, i.e. till the time
investor is expected to hold the property before reselling it. As per market information it is also

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expected that the property will have a terminal cap rate of 12% to calculate the resale value at the
end of five years.
The market analysis of the property situated at 222, Margaret Street is conducted below
using the following data table about the property (Firer and Gilbert, 2018).
Data
Property 222 MARGARET STREET, BRISBANE CITY,
QLD 4000
Address of the property 222 MARGARET STREET, BRISBANE CITY,
QLD 4000
Queensland
Type of property Multi-cultural central shopping area
Property area in square meter : 500 Square meter
Property cost $970,000
Number of years for the analysis 5
Rate of inflation 6%
Expenses expected to be reimbursed