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A premium should be regarded as advance rent. For a cash purchaser this is an opportunity cost of c?12.5k p.a. This makes the effective rental c?42.5k p.a.


To borrow money to pay the premium would be a suicide pill.


Perhaps the Hindwoods' staff are too young to remember East Dulwich when premiums were non-existant or small.

macRoban i disagree that it would be a suicide pill. The busy restaurants in the area could repay that premium back in a small number of years plus profit, that's why they are valued so high. Remember the Tulip being just a working mans cafe' sold for ?130k, leasehold 26k p.a including the flat above. There are other expamples i could give but i would be here all day. :)

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