With interest rates rising, a question I am regularly asked by clients is, “should I…
Commercial Property has traditionally proven a sound investment for investors in Australia for over a long period.
However, while things appeared relatively positive in the last quarter of 2021, a lot has changed since then.
According to the ANZ-Property Council Survey released in July 2022, uncertainty regarding the economy, rising interest rates and concerns about finance availability, have clouded the outlook.
Commercial Property Finance - Current Reality
Against this background, Lenders are likely to be more cautious and selective when lending to Commercial Investment Property .
Finance is still available, but preparation, research, and how your request is presented, are critical to a successful outcome.
In this post, I outline key areas on which Lenders focus to help you prepare your finance application.
Commercial Property Finance - What is being financed?
Lenders have always focussed on what they are being asked to finance.
They do this to understand the potential risks involved, which then flows through to their pricing, terms & conditions, etc.
When assessing Commercial Investment Property Finance applications, key elements of the property they focus on include the:
Who are we lending to?
Another important aspect of not only Commercial Property Finance but all lending, is the applicant:
Commercial Property Finance - How much can I borrow?
The first question we are often asked when it comes to Commercial Property Finance is:
While your equity contribution is important, the key driver is what you can afford to repay:
To answer these questions, we complete a Bankability Assessment, before approaching the market for finance on behalf of clients.
This powerful process:
Know where you stand before you approach the lenders so that you are not flying blind. This helps you to obtain the finance you are seeking and negotiate terms that are favourable to you.
Take Control - be Prepared
To achieve a successful outcome and obtain highly competitive finance there is no substitute for preparation:
At The 500 Group we have assisted many clients access Commercial Property Investment Finance from large Shopping Centres to highly specialised properties and owner occupied business premises, etc.
If you need finance or would like to learn more about our Bankability Assessment and how we can assist, don’t hesitate to get in touch.
Commercial Property Finance Broker