Investors eye commercial as new path to wealth after tax shake-up

The network’s Brisbane North managing director, Trent Bruce, said investors had started to see commercial assets as an attractive alternative to traditional residential investments.

“Commercial property is increasingly being considered by investors seeking diversification and stronger yields,” he said.

In addition, he noted a surge of owner-occupier interest in the market, with vacant possession opportunities providing buyers with the flexibility to customise a property to suit their own business requirements.

Raine & Horne Commercial Inner West | South Sydney director, Luke Smith, said enquiry levels for investors and owner-occupiers remained balanced, despite challenging conditions for small businesses and the broader property market.

According to Smith, quality commercial assets continued to attract purchasers primarily due to business utility and long-term investment value.

“The reality is that even if you’re buying as an owner-occupier, it’s still an investment. You’re simply putting your own business into that investment, and people can still see the upside in owning quality assets,” he said.

Despite the recent slowdown, Smith said the commercial sector was still seeing solid transactions, projecting that the dip in the market was only temporary.

“If anything, that creates an opportunity for buyers who are prepared to take a longer-term view, making now a good time to buy quality commercial property.”

Raine & Horne Commercial Bankstown director, Mark Ammoun, said seasoned commercial property buyers had been looking beyond short-term headlines and focusing on long-term market fundamentals.

“Many buyers understand that and are looking beyond the headlines to secure quality assets that will deliver value over the longer term,” he said.

He also noted plenty of opportunities coming to market in the commercial space, such as a Kingsgrove property that had been owned by Australia Post since it was originally constructed.

“Opportunities to secure a freestanding commercial asset with that sort of history and profile rarely come to market.”

When it came to the investor reforms, Ammon said there had been plenty of discussion on changes to residential investment, but less attention to the way capital gains tax would apply when people sold a business.

“Small business owners are an important part of the commercial property market, so those proposals deserve just as much scrutiny.”

According to Raine & Horne, the recent interest in the sector was evident in the fact that four premium commercial assets sold for a combined $12 million at a two-day auction event last month.

Bruce said the national auction event significantly expanded the pool of potential buyers by exposing properties to local and interstate purchasers.

“The concentrated marketing campaign creates far greater momentum and urgency than a standalone sale campaign,” he said.

Additionally, Smith said auctions provided certainty for both buyers and sellers by delivering an unconditional offer and an immediate exchange of contracts, if accepted.

“It removes much of the uncertainty from the transaction because the deal is done, allowing both buyer and seller to move forward with confidence.”