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Property Investment Strategies Overview

The document provides an overview of property investment strategies from the perspective of Andrew Kraefft, a guest lecturer with experience in real estate investment and leasing. It discusses key concepts like capitalization rates, operating expenses, discounted cash flow analysis, and commercial lease terms. Examples of major office towers Kraefft has worked with are also summarized, including Chifley Tower, 25 Martin Place, 32 Smith Street and 60 Station Street, and St Kilda Road. The document concludes with questions about target markets and sectors for property investment.

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Vaishnavi Hallikar
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161 views26 pages

Property Investment Strategies Overview

The document provides an overview of property investment strategies from the perspective of Andrew Kraefft, a guest lecturer with experience in real estate investment and leasing. It discusses key concepts like capitalization rates, operating expenses, discounted cash flow analysis, and commercial lease terms. Examples of major office towers Kraefft has worked with are also summarized, including Chifley Tower, 25 Martin Place, 32 Smith Street and 60 Station Street, and St Kilda Road. The document concludes with questions about target markets and sectors for property investment.

Uploaded by

Vaishnavi Hallikar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Property Investment

Strategies

Guest Lecturer - Andrew Kraefft


[email protected]
Education
Melbourne Business School
Master of Business Administration (MBA) 2019

Nottingham Trent University (UK)


Master of Real Estate 2012

University of Sydney
Bachelor of Applied Science (Physiotherapy) 2010

Property Work History

Charter Hall, General Manger of Chifley Tower

Investment
2021- Current

The GPT Group, General Manger (32 Smith St & 60 Station St)

A Leasing & Asset 2020 - 2021

Office Perspective Dexus, Commercial Manager of 25 Martin Place (MLC Centre)


2018 - 2020

Knight Frank, Office Leasing (Melbourne)


2013 - 2017
Cap Rates
Cap Rate (Capitalisation rate) = what your investment return or yield will be.
In general, higher the cap rate, higher the risk and return.
Cap rate is inverse to value - lower cap rate, equals higher value

Net Operating Income / Property Value = Cap Rate


$1,000,000 / $20,000,000 = 5% 

Net Operating Income (NOI) / Cap Rate = Property Value


$1,000,000 / 8% = $12,500,000 or $1,000,000 / 7.5% = $13,333,333
Operating Expenses for a Commercial Tower
Discounted Cash Flow
Commercial Terms - Lease
Commercial Term Examples
Lessor / Landlord Landlord
Lessee / Tenant Tenant
Premises (Building) Suite 3, Level 15, Collins Street
Area 300sqm, 30,000sqm
Net Rent $130/sqm, $1,745 / sqm
Outgoings $250/sqm
Term 3yr, 5yrs, 10yrs, 15yrs

Options 1 x 5yrs

Commencement Date 1 July 2023


Annual Rent reviews CPI, 3.75%
Incentive 30% (Yr 1 Gross Rent x Term x 0.2)
Bank Guarantee 9 months gross rent
Expansion / Contraction Rights Hand back half a floor after year 3
Condition of Premises As inspected
Chifley Tower
Chifley Tower
Source: SMH
Source: SMH
Source: Charter Hall Annual Report FY22
25 Martin Place

Source: Dexus 2022 Annual Report


25 Martin Place
Source: Dexus 2022 Annual Report
Source: Dexus 2022 Annual Report
32 Smith Street & 60 Station Street, Parramatta
Source: GPT 2022 Annual Report
2016 Annual Report

Source: GPT 2016 Annual Report


Source: Knight Frank
St Kilda Road

Source: GPT 2016Annual Report


What market are you
investing in?

> Premium Core?


> Suburban Fully Lease?
> B Grade Value Add?

Source: JLL Research


What sector are you
investing in?

> Office?
> Retail?
> Industrial?

Source: CBRE Research


Listed Real Estate
Goodman Group

Source: Goodman Group Annual Report 2022


Source: Scentre Group Annual Report 2022

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