Payneham unit block offering rare investment opportunity

A rare offering of an entire block of units in Payneham is attracting strong interest from blue-chip investors set to enjoy immediate rental returns of more than $130,000 a year, with further financial gains likely through land banking.

The complex at 1-6/6 John St, which comprises six solid brick units, returns a combined gross income of $2510 a week, or $130,520 a year.

But selling agent Mike Lao, of Edge Realty, said the rents were under current market value, presenting an easy opportunity for higher returns.

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1-6/6 John St, Payneham.

1-6/6 John St, Payneham.

1-6/6 John St, Payneham.

“The rents are varying between $400 and $480 (per unit per week) but the property managers are suggesting market rents are more like $500 (per unit per week),’’ Mr Lao said.

He said one unit, which currently rents for $480 a week, had recently had its kitchen and bathroom updated.

Higher rents could be charged on the remaining units if they were similarly renovated, he said.

The property, set on an expansive 1271sqm allotment just six kilometres from the CBD and boasting a 24m frontage, also had strong potential for redevelopment, Mr Lao said.

“If this were (developed as) townhouses, you would get a massive return on investment because by building up you could squeeze a lot more onto it,’’ he said.

Mr Lao described the listing as a “once-in-a-lifetime’’ opportunity, which was attracting keen interest from those looking to purchase through self-managed super funds and land bankers.

“There’s been interest from some builders – not so much buying it to knock it down but just to acquire it and land bank it because (Payneham) is a tightly held area,’’ Mr Lao said.

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1-6/6 John St, Payneham.

1-6/6 John St, Payneham.

1-6/6 John St, Payneham.

“This is a blue-chip investment opportunity. Even if you don’t do anything (renovate the units) you can still increase the rent.

“Opportunities (to buy) something like this are very rare, it’s once in a generation.

“So, when they come up you grab them because they won’t come up again for another 30 years.’’

Lease agreements for each of the two-bedroom units end between September this year and June 2026.

Each unit comes with two bedrooms, a spacious open-plan living, meals and kitchen area, bathroom and separate laundry.

There is also one off-street, designated undercover carpark per unit.

Offers for the property close on Tuesday, July 1, unless sold prior.

No price guide has been released but Mr Lao expected it would sell for more than $2.2m.

– by Lauren Ahwan

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