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

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

Prosper Group assist their client with purchasing a rare off market blue chip investment

I’m very happy with the service Prosper Group have provided with my search and acquisition. Their professionalism, persistence and understanding of my needs in commercial property were outstanding and I would highly recommend them.


Anthony

Experienced investor purchases an off market fully leased shopping centre with future development potential

Meticulous, thoroughly professional, very patient. A pleasure to deal with.


Dr Emanuel Cassimatis

Growing business finds the right property

I would like to thank Prosper Group for their expert help in finding a business location for our growing business.

As anyone in small business realises time is hard to come by, Prosper Group found the potential properties, narrowed them down and then in one day only for me we selected the right property.

Prosper Group then negotiated the deal all with little effort and time from myself.

I have no hesitation in recommending Prosper Group; they will save you time and money and also offer friendly advice.


Mark Dooley
Director - Best Doors

Prosper Group’s due diligence saves a doctor from an expensive mistake

I originally engaged Prosper Group to conduct due diligence and negotiate the purchase price of a property I had located to use as a surgery. Their due diligence identified a major issue with access to the car park at the rear of the property and unfortunately a solution was not possible. Based on Prosper Group’s advice, I withdrew from the purchase of the property.

Since then I have used Prosper Group to assist with other property matters relating to my business, including making off market offers on properties suitable for surgeries. I am also in the process of engaging them to source a residential investment property.

Over the eight months that we have been working together, I have found Prosper Group to be very knowledgeable, professional and thorough in their approach, as well as great value for money. I have the confidence to leave the process to them, allowing me to focus on my patients and the business.


DR. Ian Katz
AMA (NSW) Member

Adelaide investor saves $325,000 on high-yielding QLD commercial office block

“I wanted to invest in a commercial property, but as I live in Adelaide there was no way I could commit the time to the research and negotiation. Once I contacted Prosper Group, Alex and the team around the country set about establishing a short-list of potential properties to begin the due diligence process.

Together we rejected the properties that didn’t meet the strict checklist we created together. Eventually, we settled on an excellent retail complex in inner-city Brisbane.

Prosper Group’s negotiation skills reduced the price from $1,500,000 to $1,175,000. I saved much more at purchase than it cost me to engage Prosper Group to complete the transaction.

The property, which is zoned for further development, was purchased on a net yield of 12.65%. Seven months later, it was re-valued at $1,485,000. The property is now returning a high yield with stable long term tenants.

I am very impressed with Prosper Group’s method of selection, their support team – including solicitors – their management and their process from start to finish. Their attention to detail is second to none and they will not push anything through until all of the buyer’s requirements are satisfied.

I can highly recommend Prosper Group. We are currently in the process of finalising another commercial deal and I look forward to building a large portfolio of properties with their assistance over the ensuing years”.


J.B.
Company Director & investor

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