Commercial property investment
In commercial, you are not really buying a building. You are buying a lease, and the quality of that lease sets the value, the yield and what a lender will lend against it. Most of the category leads with a yield number and stops there. We look at the document that produces it.
Lease, WALE and covenant assessed
Lender appetite checked before you bid
Acting Australia-wide
Why the numbers get read properly
A commercial asset is an income stream with a building attached. The lease sets what it earns, the tenant’s covenant sets how reliable that is, and the two together set both the valuation and how much a lender will advance against it. That is an accounting problem before it is a property one, and it is where most commercial purchases are actually won or lost.
Religare Realty is run by a Chartered Accountant. Our sister business, Religare Home Loans, holds a commercial finance panel spanning bank, second-tier, alt doc, SMSF, private, construction and short-term lenders. So the person modelling your return is also the person who knows what a lender will do with the asset — established before you commit, rather than discovered during the finance clause. Very few buyer’s agencies can do both sides of that, and the gap between them is where deals fall over.
What we assess that a yield figure hides
A 7% yield on a two-year lease to a single small tenant is not a better asset than a 5.5% yield on a ten-year lease to a national covenant. It is a different risk wearing a bigger number.
| What we look at |
Why it decides the outcome |
| Tenant covenant |
Who is actually on the hook. A national brand, a franchisee of that brand and a sole trader are three different risks behind the same shopfront. |
| Lease term and options |
Remaining term drives the valuation. Options belong to the tenant, not to you — they are not guaranteed income. |
| WALE |
On a multi-tenanted asset, the weighted average lease expiry tells you when your income cliff arrives. |
| Rent review structure |
Fixed, CPI or market. Over a ten-year hold this is often worth more than the entry yield. |
| Outgoings recovery |
Net or gross, and what is actually recoverable. The difference between a stated and a real net yield. |
| Make good and capex |
What falls to you at expiry, and what the building will need in the meantime. |
| Lender appetite |
Some assets banks will not touch at any price. Better to know before you bid than during the finance clause. |
Asset types we look at
Industrial & warehouse
Office
Neighbourhood retail
Large format retail
Medical & consulting
Childcare
Fast food & QSR
Service stations
Self-storage
Mixed use
Specialised assets — childcare, service stations, hotels, self-storage — are financed very differently to standard commercial, typically at materially lower leverage and against going-concern value rather than the building alone. We will tell you what that means for your cash requirement before you go near a contract.
Who this is for
Most common
Residential investors moving across
You have three or four residential properties, serviceability has run out and the portfolio does not pay you anything. Commercial changes both problems at once — and it is a genuinely different discipline, not more of the same.
Highest value
Business owners buying their premises
You are paying rent to a landlord for a building you could own. Often the strongest lending position of any commercial borrower, because you are the tenant — and sometimes able to be held inside your fund.
Specialist
SMSF trustees
Trustees who have already taken licensed advice that property inside the fund suits them. Business real property is the one asset class a fund may lease to a related party. More on SMSF property →
Common questions
How much do I need to get started?
Commercial lending sits at lower leverage than residential. Standard assets — industrial, office, retail, medical — generally need a 20% to 40% deposit depending on the asset and the lender, and specialised assets typically 35% to 50%. Stamp duty and acquisition costs sit on top. Realistically most commercial acquisitions start around $500,000 and the majority of what makes sense for a first commercial purchase sits between $1m and $3m. The indicative lending parameters are set out on our
commercial property loans page.
Is commercial riskier than residential?
Different, not simply riskier. Vacancy hurts far more — a vacant commercial property earns nothing and can stay that way for a year, while you still pay outgoings. Against that, leases are longer, tenants pay most of the outgoings, and the income is materially higher. The risk is concentrated in the tenant and the lease, which is why we spend our time there rather than on the building.
Can I use my SMSF?
Many people do, and commercial is where SMSF property is most often used because business real property may be leased to a related party. Whether an SMSF is appropriate for you is a financial product decision and we are not licensed to advise on it — that belongs with your accountant or licensed adviser. Once that decision is made, we can act on the acquisition and arrange the limited recourse borrowing through Religare Home Loans.
How is a commercial property actually valued?
Off the income, not off comparable sales. A valuer capitalises the net rent — annual net income divided by a market capitalisation rate. A property returning $120,000 net at a 6% cap rate is worth $2 million. If the market decides that asset class now deserves 6.5%, the identical income is worth $1.85 million, without a thing changing at the property. This is why a short remaining lease term or a weak tenant reduces the valuation itself rather than just the rate you are offered, and why the shortfall comes out of your deposit rather than the bank’s. We run this calculation before you make an offer, at the cap rate we believe a valuer will actually apply — not the one used in the selling agent’s marketing.
What should I check in the lease before making an offer?
Who the tenant legally is, first — a national brand, a franchisee of that brand and a sole trader behind the same shopfront are three very different risks, and only the lease tells you which one you have. Then the remaining term and who holds the options, because options belong to the tenant and are not guaranteed income. Then the review mechanism: fixed, CPI or market, which over a ten-year hold is often worth more than the entry yield. Then outgoings — whether the lease is net or gross and what is genuinely recoverable, which is the difference between a stated yield and a real one. Finally make good and capital expenditure, so you know what falls to you at expiry. We work through all of it before you are committed, and we will tell you when the answer is that you should walk.
Where can you act?
Nationally. We are licensed directly in New South Wales, Queensland and Tasmania, and act in Victoria, Western Australia, South Australia, the ACT and the Northern Territory under automatic mutual recognition of our NSW licence.
Send us a listing and we will pull it apart
Thirty minutes, no cost, no engagement required. Bring a commercial property you are looking at and we will show you what the lease actually says about it and what a lender would do with it.
Book a discovery call
+61 426 223 035
Buyer’s agency services only. This page is general information, is not financial product advice, credit assistance, tax advice or legal advice, and does not take account of your objectives, financial situation or needs. Deposit and lending ranges referred to are indicative as at August 2026 and subject to lender policy, valuation and credit assessment. Commercial property investment carries risk including extended vacancy and capital loss. Obtain advice from your accountant, licensed financial adviser and solicitor before acting. Related: commercial property loans, SMSF property.
