Buying a commercial property can be a fantastic investment if done correctly or a very expensive mistake if not. The buying process is a lot more complex than residential property and for this reason should only be done with the assistance of experts

Prosper Group is one of the few if not the only buyer’s agency to have a team dedicated to commercial property. On a regular basis we are advised by Sydney and Brisbane’s top commercial real estate agents that we are the most active buyer’s agent in both regions.

In addition to our leading and highly experienced buyers agents we also have the benefit of involving our Asset Management team with the due diligence process. For our clients this means two core skill sets are reviewing their potential property.

Our clients include first time commercial property buyers to those who are highly experienced and currently own large commercial portfolios, overseas investors, Associations and private businesses.

Before commencing our search, the team will meet with clients and work together to create a search criteria which is in line with our clients objectives taking into account our advice and feedback on current market conditions. From this point we take the brief to our network of agents, landlords and developers and assess opportunities which are both on market and off market.

Being successful with purchasing a property is more than price. The commercial market is all about connections, knowledge and experience. Prosper Group provides these attributes to their clients, giving them an advantage and enabling their clients to get ahead of other buyers in the market.

Once the right property has been identified and negotiated a robust due diligence analysis is conducted as part of our service to ensure there are no unexpected costs or risks. This due diligence covers:

  • Tenancy analysis
  • Lease analysis
  • Financial analysis; including rental income and outgoings
  • Sales and leasing analysis
  • Property functionality; i.e. future potential uses and opportunities
  • Building condition
  • Capital expenditure (CAPEX) requirements
  • BCA compliance
  • Town Planning

View our Commercial Purchased Properties

COMMERCIAL BUYERS AGENT FAQ’S

How to invest in commercial property?

Commercial property provides a higher net yield or cash flow than residential property. Long term leases from commercial property provides security of income, as does owning a multi-tenanted property.

What are the risks of investing in commercial property?

Potential long vacancy periods should your tenant vacate. Increased costs for securing a new tenant with lease fee’s and incentives. Commercial property leases are complex causing inexperienced investors to misunderstand and therefore calculate the projected net yield incorrectly.

How does commercial property investing differ from residential property investing?

Higher net yields/ cash flow, longer lease terms, longer vacancy periods, more exposed to the economy and business conditions. The value of a commercial property is centred around the properties potential net income, therefore less emotional and subjective than residential property.

What are the options within commercial? ie. office, retail, industrial.

Specialised commercial asset classes include: Office, industrial, retail, medical, fast food, service stations, child care centres, self-storage and student accommodation.

What’s the difference between freehold and strata title?

Freehold is owning the land and the building. Strata you own a portion of the land and have limited control in the use of the land/property.

Who can purchase commercial property? What is the best structure, ie SMSF etc.

best to take advice off your accountant, however, typically a client would hold the property in some form of trust structure.

What factors influence demand for commercial real estate? Interest rates, infrastructure, demographics etc.

Economy, interest rates or borrowing capacity all have an influence on demand. Infrastructure projects, demographics and zoning/development potential can increase demand on a micro scale, i.e. location specific.

As above, what should investors look for in a potential investment.

The rent and outgoings paid by tenants needs to be scrutinised against current market rates. It’s important these rates are in-line with market.

Understand the true WALE (Weighted Average Lease Expiry) of the property.

Like residential property, the condition of the property should be reviewed by a professional building consultant. Ideally, a property should have a point of difference above other competitive properties in the same market. An assessment should be made on how easy it would be to secure a new tenant should the existing tenant vacate. It is important that an investor focuses on the fundamentals of the property and not who the current tenant is. Tenants can come and go however a property with the correct fundamentals will ensure the property is leasable. This is what you are seeking with a commercial investment.

Review the lease or leases to ensure they are well written and structured. Too often leases are grey and in most cases this creates a problem down the track.

How do you get finance?

Typically through a broker or a Bank.

What should a lease look like?

A professionally prepared lease by a solicitor is recommended. The lease needs to be well structured with no loop holes for the tenant to terminate the lease or not pay rent. The payment of rent and recovery of outgoings needs to be clear and concise, not grey.

What are the top 5-6 top tips for first timer commercial investors? ie. Invest in prime locations, look for one that is already leased, do your due diligence?

Be patient, make sure the fundamentals of the property are sound, make sure all the values (ie. rent, outgoings, capital rate etc.) are within market range. Ideally purchase a property with a long WALE. Be thorough in the search for a property and know as much as possible about the market. Be thorough in the due diligence and leave no stone unturned. Work out a negotiation strategy before commencing negotiations. If an investor is inexperienced or lacks confidence, seek the assistance of an expert as commercial property can be very expensive if you make a mistake when purchasing.

What mistakes do you see first-timers make that others should avoid?

Over paying for a property, under valuing a property and missing out on opportunities, not executing enough due diligence, not exposing themselves to all the opportunities in the market, not being able to calculate the true net income and net yield, purchasing a property which is too specialised and hard to attract new tenants once the original tenant vacates and buying a property with the belief the tenant won’t leave.

Commercial Buyers Agent TESTIMONIALS

Existing Residential Client turns their hand to Commercial Property Investment with Prosper Group’s Guidance

In early 2018 we decided to purchase a significant commercial property. Quite frankly, we did not know the first thing about larger commercial properties and needed a lot of help. Prosper Group are excellent property managers for our residential properties, and when our PM mentioned that Prosper Group is also a specialist Commercial Buyers Agents, we confirmed a meeting with them to discuss our needs.

 

From the initial presentation, right the way through to the completion of the purchase, Damien, Alex and the Prosper Group team were thoroughly professional, patient and pleasant to work with. The depth of knowledge they exhibited on all aspects of the purchase was extraordinary.

 

We are Sydney based, and ultimately the property selected for purchase was located in Brisbane. This wasn’t an issue; the highly detailed pre-purchase reports, and the subsequent due diligence reporting that was prepared for us by Prosper, gave us the confidence to proceed. With consummate skill Damien handled all the discussions and difficult negotiations encountered at every step of the process, from initial contact with the vendor, right the way through to completion, and handover.

 

We wholeheartedly recommend the Team at Prosper Group as your Commercial Buyers Agent, and certainly hope to be in a position to use them again in the future.

 


Mark and Sue
NSW

$6.15 million profit in 2 years!

During 2011-12 I commissioned Prosper Group to find a multi-tenant commercial building for investment. Following many months of patient search and negotiation I eventually bought an attractive property with long term future development upside in October 2009. Detailed and patient due diligence process assured me it would be a good medium-long term hold. Proper Group managed all aspects of the purchase, management and subsequent sale.

During the next few years the boom of conversion of commercial sites to residential apartments rapidly grew.  After many unsolicited enquiries and offers we decided to openly market the site. This was handled very well by Prosper and Ray White Commercial resulted in my accepting a very attractive offer December 2014 with delayed settlement February 2016.

Also in late 2012 through Prosper Group I bought another multi-tenant Commercial property with the same objective and criteria.  Planning changes in the area have created significant capital gain that will be realised in 3-4 years.

In April 2009 Prosper Group also assisted me in buying a large single tenant industrial building that has been an excellent stable, simple well performing investment.


Ross Glasson
Private Investor

Kennards Hire seeks Prosper Groups assistance

Having out grown an existing location, we (Kennards Hire) decided to look into the option of relocating that branch.

Not having enough time to devote to such a large task and having previously worked with Prosper Group on another of our properties I engaged their services to assist with the location of the new site.

Prosper Group showed their professionalism and expertise throughout the whole process, making the job very easy for me.

I will recommend their services to anyone looking to purchase a property and will continue to use them in the future.  Thanks for your help.

 

 

 


Cameron Kennard
Kennards Hire & Keneco Property

Prosper Group secure and manage CWA’s new State Office

The Country Women’s Association of New South Wales formed a relationship with Prosper Group in 2013 to assist with its future accommodation strategy. This included the sale of its long held premises in Potts Point and the subsequent search and purchase of a new property.

The Prosper team provided valuable advice to the Property Sub-Committee over the process and their knowledge and insight into the market was second to none. They were very professional in their approach and at times went out of their way to provide additional assistance.

Subsequent to the purchase of our new State office, we then engaged Prosper to source a residential investment property. Again their expertise and professionalism ensured an excellent outcome for our organisation.

In addition, we are now utilising Prosper’s Commercial Property Asset Management services to manage our newly acquired site.

We would not hesitate to recommend Prosper Group to our business associates.


Donna Wilkins
Executive Officer - Country Women's Association of NSW

Medical centre leased for 15 years to ASX listed medical operator

Prosper Group found us an off market commercial investment property, which meant that we didn’t have the pressure of competing against other buyers to secure the property. The transaction was handled in a very professional way from negotiations through to a successful settlement, keeping us informed at every stage of the process.

Even when a few challenges arose during the transaction their knowledge and expertise allowed us to make informed decisions on important issues.

We were very happy with the acquisition service that Prosper Group provided and now have them as our asset manager to assist us in obtaining the best long term value out of this property.


Robert Lin
Director of Lin Holdings Pty Ltd

Prosper Group’s transaction management allows their client to focus on their own day to day activities

Prosper Group assisted us in purchasing an investment property in Gosford. They handled the transaction in a very professional way from negotiations through to a completion, and they kept us informed at every stage of the process.  The fact that Prosper Group handled all aspects of the transaction and were available at any time meant that we were only required to put in a minimum amount of time and effort, which helped us stay focussed on our own day to day activities.

Prosper Group’s acquisition service provided us with the peace of mind that the property we purchased is a good long term investment, and we have also engaged Prosper Group’s asset management term to assist us in obtaining the best long term value out of this property.


Shaji Mundattu

New industrial strata unit in Newcastle growth area

Communication has always been detailed, every step of the process has been handled professionally, my own time involvement has been minimised.

I look forward to working with Prosper Group on a continuing basis to develop a property investment portfolio.


Dr Nicholas Wilkes
AMA member

Extensive search identifies two off market trophy investment properties

Prosper Group understood the type of property investment profile we were seeking and provided numerous properties for the association to consider. The shortlist were quality properties and the due diligence work that Prosper Group undertook was very thorough and provided valuable information for the board to consider. The NSW Farmers Association has ended up with 2 high quality buildings. Thank you Prosper Group.


Matt Brand - CEO
NSW Farmers Association

Client makes a 50% profit in just over 12 months

Running a busy practice leaves me little time to look for property, I engaged Prosper Group to source and negotiate a commercial investment property for me. They negotiated an outstanding deal for me – almost 19% off the purchase price. They did extensive due diligence ensuring the property met my criteria. The final property we selected was in an area council designated to modernise and add additional infrastructure.

The property was purchased on a net yield of 8.91%.

12 months later nearly to the day council actually offered me $200,000 more than what I paid for the property. I asked Prosper Group for their input and to my delight they negotiated an extra $600,000 for me.


Dr Barry Young
Mermaid Beach, QLD

High yielding long term investment

We thank Prosper Group for their diligent and professional approach in assisting us with purchasing a commercial investment property. Prosper Group really helped guide us through the ups and downs of finding, negotiating, analysing and successfully purchasing an investment that satisfied our requirements.

Prosper Group’s experience and expertise kept us ahead of the market and helped us be competitive in a strong market. They also provided us with a diversified search covering all of NSW and QLD which ultimately led us to buy a property in Brisbane when we were originally only considering Sydney and the Newcastle region. Although this was a new market for us Prosper Group made us feel comfortable with the area and the property and we achieved a better result than the properties we were considering in Sydney.

We valued and enjoyed the education on industrial properties throughout the search, and appreciated the market background intelligence so as we could reassess our strategy in moving market conditions.

We are happy to have Prosper Group as our property adviser and asset manager.


Norris Family