Property deal - hot or not?

[V8mate]

Piece of land. £26m price tag.

Sitting tenant. 39 years of a forty year tenancy to run.

£1.38m pa rent (indexed - RPI equivalent). Five year reviews.

[JQ]

Based on the information provided it's impossible to tell.

If it's let to Peacock's probably not, if it's let to Tesco, possibly.
If the true Market Rent is actually £500,000pa, then probably not.
If the true Market Rent is actually £3m pa, then most definitely
If it's in central london with a Vacant Possesion value of £40m then yes.
If it's in Workington with a Vacant Possession value of £1m, then no.

I could go on, but you get the idea.

Assuming it all stacks up, is in a reasonable location and is let to a good covenant, then it's a reasonable deal - 5.0% net intial yield with 39 years future growth.

[Oi_Oi_Savaloy]

I guess it also depends on the cost of your money?

It's not a great return at that asking price. Unless, as JQ says, it's an A1 tenant.

Is any of the land vacant? Does that element have development potential?

Happy to offer advice if you could expand on the opportunity a little.

[BravoMikeWhiskey]

If you've got the money in the bank then on the face of it then you're going to get a better return.

Is the sitting tenant going to disappear/go bump?

Is it 39 years at the same rent? Is there capital growth? Rack/under/over-rented?

Rent reviews?

So many questions to ask before you can have a definitive answer and you'd pay good money for that advice