THIS OPPORTUNITY IS NOW FULLY BOOKED (AS OF 2/8/2020) – NEVERTHELESS THE DETAILS ARE GIVEN BELOW
Friends – Here is an interesting investment opportunity where I am investing and want to share with all my readers. The picture above is of the property that I am talking about.
The details are as follows:
- Investment required for participating in this opportunity – Rs 25 lacs (You can combine with friends and relatives if the amount seems large).
- Your will be owning part of a company proportionate to your investment (through shares in this company) which will own this warehouse property.
- The property is in a 2.13 acre plot with a 40,000 sq ft warehouse (including cold storage) in Jigani area in Bangalore and it is owned by a UK/Irish pharma company called Randox Labs since 2006.
- Randox Labs is selling this property and leasing it back for their use.
- The lease terms includes a 4.5% rent increase every year and a 12 year lock in clause w,e,f Sept 2020.
- The total purchase price of the land /warehouse building is appx 26 crores – which is lower than the market price by about 15% (as per my analysis and a recent evaluation report by JLL)
- There is an extremely high confidence that this land will appreciate over the years. This location is such that there is no space available in the neighborhood. It is well connected by road. The property can have a built-up space of 2.1 lac sq feet – where as the current built up area is only 40,000 sq ft. Neighboring property is a warehouse by India’s largest warehouse company called Indospace on a 5 acre plot. In the same area are many well known names like Biocon, HCL Tech, Cipla, Mylan, Schnieder, Mahindra Electric etc.
- This land is legally clean as it was sold by KIADB (a govt body) to Randox in 2006.
- The rental returns after management fees etc is 8.7% and if you add another 5% capital appreciation of land value per annum) – the ROI comes to 13.7% – this is most conservative as I believe the land will appreciate at more than 5% per annum.
- I am happy to invest here for the passive rental income where the principal investment is also inflation proofed due to capital appreciation. As most of us know, rental yields in residential properties is around 2-3% and investment in office properties will see some downside due to covid impact in the coming years.
- Like any real estate investment – the timelines should be 5 years or more for this investment. Exit routes are available for those who want to exit before that through sale of shares.
I expect this investment to be snapped up by investors very soon – by August first week (as it just needs 100-110 investors of 25 lacs each to make up for the 26 crore property) and so it is best to act fast.
So if you are interested – please do write to me at email@example.com and I will be happy to share the details and introduce you to the company front-ending this deal.