Warehouse Property Loans Australia: Industrial Buyer Guide
Property Lending
Industrial property · Warehouse purchase · Commercial lending
Buying a warehouse, factory or industrial unit in Australia is not just a deposit-and-rate decision. The building, valuation, repayment evidence, contract, GST treatment, duty, due diligence and cash left for settlement all interact. This guide joins those decisions up in the order a buyer actually meets them.
Quick Answer
Warehouse property loans in Australia are commercial property loans used to buy industrial premises. There is no Australian deposit rule: your cash requirement is the purchase price and acquisition costs, less what a lender will advance against its valuation. The building, repayment evidence and settlement costs determine the result.
Start where you actually are
Most people reach this page in the middle of something, not at the beginning. Pick the line that matches you and go straight there.
- I am thinking about buying instead of leasing, nothing picked yetStart with why a commercial loan behaves nothing like the home loan you are picturing.
- I have a building in mind and nothing is signedRun the listing through the checks before you spend money on due diligence.
- I have found one but I do not have the full contribution in cashSee the ways buyers commonly bridge a genuine cash gap, and what each one puts at risk.
- I have signed and the finance clause is runningBuild the full settlement cash number now, not just the deposit.
- I am comparing rates or loan offersCompare the total facility, not just the headline interest rate.
- I need to know what documents to sendMatch the evidence pack to full doc, low doc or lease doc before the lender asks twice.
- The valuation came back under the contract priceWork out whether the gap is factual, structural or simply a lower security value before choosing the fix.
- The bank has said no, or gone quietAsk for the extension first, diagnose second, go to market third.
- I have settled and something has come upThe activity statement, the first land tax notice, and the facility review nobody warned you about.
Also called: industrial property loan, warehouse loan, factory premises loan, light industrial property finance.
What is warehouse finance, and what does an industrial property loan cover?
A warehouse or industrial property loan is a commercial property loan secured by the building you are buying. The mechanics of that loan, how a commercial facility is structured, priced and reviewed, are covered in the parent guide on how commercial property loans work, and this page does not repeat them. What this page covers is the purchase itself: the deposit question answered properly, the cash that falls due on the way to settlement, what a lender tests on an industrial building, and the tax that nobody joins to the funding.
The scope is a purchase of an existing industrial property, freehold or strata, on a standard commercial facility of the kind Switchboard places through commercial property lending. That includes a warehouse, a factory unit, a workshop, a distribution or logistics building, bulky goods premises and vacant land already zoned for industrial use. It does not include building one from the ground up, which runs on a staged facility and belongs to the construction finance lane, and it does not include the plant inside the building, which is equipment and machinery finance and is assessed on the gear rather than on the land.
One thing worth clearing up before anything else. The phrase warehouse finance carries at least four unrelated meanings in Australia, and three of them have nothing to do with buying a building. Search results for the term mix all four together, which is part of why the deposit answers you find contradict each other. Here is the disambiguation, so you know quickly whether you are on the right page.
| What you are looking for | What it actually is | Covered here? |
|---|---|---|
| Buying an industrial or warehouse property | A commercial property loan, secured by the building and the land it sits on | Yes, this is the page |
| A warehouse facility for a lender | A wholesale funding line a lender draws on to fund its own loan book, an institutional arrangement, not a product a buyer applies for | No |
| Warehouse racking, forklifts or fitout | Equipment and asset finance, secured by the gear rather than the property | No, that is the manufacturing and equipment lane |
| Renting a warehouse | A commercial lease, a rental obligation rather than a loan, though the lease itself becomes evidence if you later buy | No |
| Building a warehouse on land you own | A construction facility drawn down in stages against progress claims and a quantity surveyor report | Partly, the purchase side only |
If the row you are on says no, the answer you want is not here, and the table names what it is instead so you can go and find it.
Is a commercial property loan the same as a home loan?
No. A commercial property loan is a different product, assessed on different evidence and secured by a different kind of asset. Commercial facilities may also have review, interest-only expiry or maturity points written into their terms. The practical mistake is assuming a residential pre-approval tells you how a lender will treat a warehouse that has not yet been assessed.
The structural difference is that an industrial purchase combines a business credit decision with a property security decision. The lender looks at how the debt will be repaid and at what the building would be worth or how easily it could be re-let or sold if the plan changes. That is why the same borrower can get different answers on two different properties.
| What changes | Home loan | Commercial or industrial property loan |
|---|---|---|
| What the lender assesses | Your income, tested against a standard affordability model | How the debt is repaid, the borrower evidence and the security itself. A problem in any one of the three can change the outcome |
| Whether published limits exist | Consumer lending is heavily standardised and widely published | No published national rule sets a deposit or a maximum ratio. It is individual lender credit policy applied to your building |
| Insurance that bridges a small deposit | A recognised insurance product exists that lets residential buyers proceed with less of their own money | There is no equivalent in general use, which is the mechanical reason the cash requirement is larger |
| What the valuation measures | What a comparable house in the same street recently sold for | What the security is worth to the next occupier or buyer, which on a specialised building is not what you are paying |
| Whether the facility is reviewed | Generally set and left to run to term | Review and maturity arrangements are set by the facility. Some commercial loans are reviewed periodically; others mainly turn on their contractual expiry and covenant terms |
| What happens at the end of the term | The loan amortises to zero over a long term | Many facilities run to an expiry with a balance still owing, to be refinanced, repaid or renegotiated at that point |
| What pre-approval means | A reasonably reliable indication before you find a property | A useful budget and borrower indication, but not approval of the warehouse. Property-specific valuation, security and due-diligence conditions still come later |
| What sits outside the loan | Duty and legals sit outside, and the list is short | Duty, legal costs, valuation or reports, settlement adjustments and GST exposure where relevant can all sit partly or wholly outside the property advance |
This table describes structural differences between two lending categories, not the terms of any particular facility. No rate, ratio, term or deposit figure appears in it, because those are set by individual lender policy on the transaction in front of them.
The practical consequence is a change of sequence. You can get an indicative borrowing view before choosing a property, but a warehouse purchase is not fully de-risked until the lender has seen the actual security and the contract conditions have been worked through. Treat early approval as a budget filter, not as a substitute for property approval or a properly drafted finance condition.
Can I get pre-approval before I find a warehouse?
Yes, you can often get an indicative or conditional view of your borrowing position before you choose the warehouse. What it does not do is approve an unknown property. Once you have a building, the lender may still need the contract or listing, valuation, intended use, lease information where relevant and any property-specific conditions before formal approval. Use pre-approval to set a realistic search budget, then keep the finance condition aligned to the property assessment that still has to happen.
Can I bid at auction with only commercial property pre-approval?
No pre-approval should be treated as approval of the warehouse you are about to bid on. Bidding at auction removes the finance condition entirely, which is a different risk again and is covered in going unconditional at auction when the bank is too slow. The lender may still change the amount it will advance after it sees the property, valuation, title, intended use, lease position and any due-diligence issue. An auction or an unconditional contract can also leave you without the finance condition that would normally give the property assessment time to finish, so the contract risk is materially different from making a conditional offer.
Before bidding, have your solicitor review the auction contract and the state-specific consequences, and push the finance assessment as far as it can go on the actual property rather than relying on a generic borrowing indication. Give the lender or broker the contract or listing, property use, lease information where relevant and your available cash buffer, and ask what still has to happen after the hammer falls. The legal effect of the auction contract is for your solicitor; the finance point is simpler: an approval of you is not an approval of an unassessed warehouse.
How much deposit do I need to buy a warehouse?
There is no Australian rule that fixes the deposit for a warehouse purchase. The useful calculation is purchase price plus acquisition costs, less the lender advance, with any valuation shortfall added to your contribution. The lender advance is set against the lender's assessed value and its current credit policy, not against a national commercial-property limit.
How do I calculate the cash or equity contribution?
Cash or equity required = purchase price + acquisition costs - lender advance. If the lender's valuation is below the contract price, the difference between price and value is another amount you must fund unless the lender accepts other security. This is why a deposit percentage on a search result can never tell you the full settlement number.
Published deposit and LVR ranges are still useful as market signals, but they are not interchangeable rules. Different products publish different limits for different property and evidence paths, and those settings move. Our own commercial property deposit guide and our post on where higher-gearing requests actually land should be read the same way: as observed or product-specific appetite with conditions, not as a promise that the same ratio applies to this warehouse.
Now the regulator. The prudential standard that governs how much capital a bank holds against a property loan does not set maximum lending ratios. It sets capital risk weights that vary by loan to valuation band. A higher band means the lender must hold more capital against that loan, which makes it more expensive for the lender to write, not forbidden. This is the mechanism that produces the clustering you see in the market, and it is a capital efficiency effect rather than a rule.
What the regulator actually publishes
The prudential standard sets capital risk weights, not maximum lending ratios
Where repayment depends primarily on the cash flows the property generates, an authorised deposit taking institution must apply risk weights that step up as the loan to valuation band rises, with a higher weight again for a loan classified as non-standard. That is a capital cost carried by the lender, not a ceiling on what may be lent. Lending above a band is permitted. It simply costs the lender more capital, which is why lender appetite clusters rather than stops.
Source: Australian Prudential Regulation Authority, Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk, paragraph 23 and Table 3, operative 1 July 2025, read 2 September 2026 at legislation.gov.au. Applies to the lender's capital position, not to your application. The risk weight percentages are deliberately not reproduced here because they are not lending ratios and read like ratios out of context.
A figure of the regulator's own, read by the market as a rule, was not one
In February 2025 the regulator clarified that a coverage figure quoted in one of its own earlier letters on commercial property lending "does not represent a minimum requirement or expectation of APRA", and pointed instead to the prudential standard and guidance on credit risk management, which require prudent credit policies and sound assessment criteria without setting a numerical threshold. The figure in that case concerned presales on development lending rather than deposits on a purchase, and the lesson is the transferable part: a number in wide circulation, even one that traces back to the regulator, is not the same thing as a rule.
Source: Australian Prudential Regulation Authority, clarification of its March 2017 letter regarding commercial property lending, 13 February 2025, read 2 September 2026 at apra.gov.au. Quoted for what it establishes about published figures generally, not as a statement about deposits on an industrial purchase.
Both entries describe what the regulator publishes about lenders. Neither creates a deposit or maximum LVR for your purchase. What sets the lender advance is the individual product and credit policy, the property, the repayment source and the evidence available.
What published product pages show, and what they do not
Published maximums move with the security class, before the borrower is looked at
Current public product and guide pages from mainstream business lenders state a different maximum gearing for commercial property than for residential or rural property offered as security for the same business loan. The variable being priced there is the security itself, not the applicant. That is why two buyers with identical financials can get different answers on different buildings.
Read from current public product and guide pages, 2 September 2026. The ratios are deliberately not reproduced here: each belongs to a single product carrying its own borrower, lease and interest-cover conditions, and none of them is a market rule. A number lifted off one product page and applied to your building is the specific error this section exists to prevent.
Asset type and loan structure move the ceiling again
At least one business lender states the policy variable outright: commercial-property gearing depends on the asset type and on whether the loan amortises. A specialised industrial building on an interest-only structure and a generic tenanted unit on a fully amortising term are not the same lending proposition, even at the same contract price.
Read from current public product and guide pages, 2 September 2026. Recorded as the stated variable, not as a figure that transfers to another lender or another building.
Published product limits differ from one another even among current mainstream sources, which is the useful finding. They are not averaged into a deposit rule here, because averaging products that carry different conditions produces a number that is true of none of them.
Put those together and the planning rule is straightforward. Do not ask, "What is the warehouse deposit?" in isolation. Ask, "What will this lender advance against this building, what costs sit outside that advance, and what cash or usable equity will I have on the settlement date?" That produces the number you can actually act on.
What to do with that, from the broker's seat. Treat the contribution as one of three variables rather than a hurdle in isolation. The others are the strength of the security, which is what a lender looks for in the building, and the strength of the repayment evidence, which is the documentation path. A stronger result on one can help a file, but additional cash does not automatically cure a property or serviceability problem. Pricing moves on the same axes, which is why the next section separates the headline rate from the total facility cost.
How to work out your own deposit number instead of borrowing someone else's
If no published range applies to you, the useful question becomes how to derive your own, and that is a five step process you can run before you speak to anybody. It gives you a number that is real rather than a number you found on a page, and every step is something you can do with information you already have or can get in a week.
| Step | What you are establishing | What you need in hand |
|---|---|---|
| 1. Start with the building, not your cash | Whether the security is the ordinary kind with a deep pool of alternative occupiers, or the specialised kind where the shell is worth less than the fitout cost | The listing, the zoning descriptor, the site and floor areas, the age of the building and what it was previously used for |
| 2. Decide which income repays the debt | Whether this is assessed on your trading business, on a tenant's rent, or on both at once where you occupy part and let the rest | Your own position, and the lease with its remaining term, options and review mechanism where a tenant is in place |
| 3. Get an indication on this building, not on industrial property generally | What an actual lender will do with this security and this income, which is the only number that binds | Steps 1 and 2 in writing, so the indication is given against facts rather than against a description |
| 4. Price the cash that sits outside the loan | The total cash the transaction consumes, which is always larger than the deposit and is the thing that actually fails | The settlement cash checklist in the next section, run against your own state and your own contract |
| 5. Test the total against what you can put up on the day | Whether the gap is a deposit problem, a security problem or an evidence problem, because the fix is different for each | A settlement date, a finance clause date, and an honest view of what is liquid and when |
This is a method, not a calculator, and it deliberately produces no percentage. A step three indication is the only figure in the sequence that means anything, and it is specific to one building, one lender and one point in time.
What to actually put in front of a broker or a lender at step three. The indication you get back is only as good as what you hand over, and the difference between a useful answer and a vague one is usually four things: the listing or contract for the specific property, your two most recent financial statements or, if they lag, your recent activity statements and trading bank statements, the lease and any variations where a tenant is in place, and a plain statement of what cash you have and when it becomes available. Buyers who send a suburb and a price get an answer about the market. Buyers who send those four things get an answer about their purchase.
What interest rate applies to a warehouse or industrial property loan?
There is no single warehouse-loan interest rate in Australia. Commercial property pricing is set for the individual facility from the property risk, lender advance, repayment evidence, loan size, term, repayment type and fees. A published "from" rate tells you a product exists; it does not tell you the rate or total cost your warehouse purchase will receive.
The useful comparison is the whole facility, because two offers with a similar headline rate can produce different cash requirements, flexibility and exit risk.
| Line on the offer | Why it matters | Question to ask |
|---|---|---|
| Interest rate and benchmark | A variable facility may be a benchmark or reference rate plus a margin, while a fixed rate moves differently | What can change this rate, and when? |
| Establishment, valuation and legal costs | Up-front costs affect the cash needed to settle and can make a lower-rate offer dearer on day one | Which costs are paid before approval, at settlement or capitalised? |
| Loan term and facility maturity | A commercial loan can mature while a balance is still owing, creating a refinance or repayment event | When does the facility itself expire, not just the fixed or interest-only period? |
| Interest only or principal and interest | The repayment type changes near-term cash flow and how quickly the balance reduces | When does the repayment type change, and what does the payment become then? |
| Review, covenant and information conditions | The facility may require updated financials, lease information or compliance with agreed ratios | What has to remain true for the pricing and limit to stay in place? |
| Early repayment, break, default and extension costs | These only matter when something changes, which is exactly when they become expensive | What costs apply if I refinance, sell, repay early, extend or breach a term? |
This is a comparison framework, not a rate quote. Current commercial pricing changes with lender policy and the file. For the dedicated pricing discussion, see what drives a commercial property loan rate in Australia.
What security and guarantees can sit behind a warehouse loan?
A mortgage over the warehouse may not be the lender's only protection. Depending on the borrower and facility, a commercial property loan can also involve personal guarantees, a general security agreement over business assets, or another property supporting the debt. Those terms matter before settlement because they can affect what you can sell, refinance or offer to another lender later.
| Security or obligation | What it can connect to the loan | Question to settle before you accept the offer |
|---|---|---|
| Mortgage over the warehouse | The real property being purchased | What conditions apply to a later sale, refinance, subdivision or release? |
| Personal guarantee | A director or other guarantor personally to the borrower's obligations | What liabilities are guaranteed, and when is the guarantee released? |
| General security agreement | Personal property of the grantor, which can include company assets and other collateral described in the agreement | What assets are covered, what is registered on the PPSR, and will it interfere with equipment, stock or working-capital finance later? |
| Additional property security | A home or another commercial property to the same debt or lending relationship | Can that property be released independently later, and what lender test or repayment is required to do it? |
| All-monies or linked-security wording | Other present or future obligations to the securities described in the documents, depending on the actual clauses | Which debts does each security support, and can one facility be refinanced without disturbing the others? |
The Australian Government's business loan guidance says secured business lending can use collateral such as property or business inventory and may involve a guarantor. The Personal Property Securities Register says general security agreements over company assets are a common form of security agreement, while land, buildings and fixtures sit outside the PPSR. Sources read 2 September 2026: business.gov.au and ppsr.gov.au. The exact rights come from your loan and security documents, which your solicitor should review.
The customer consequence is easy to miss. A structure that gets the warehouse purchase approved can make the next equipment loan, working-capital line or second property harder if the first lender already controls the assets or equity the next lender wants. Read the security package as a future-borrowing decision, not just as settlement paperwork. If the plan is to own the building and lease it back to the trading entity, or to sell it later and stay in occupation, that is a sale and leaseback question, and it changes both the valuation basis and the security package. If multiple properties are being tied together, see getting off cross collateralisation; if the facility contains broad linked-security wording, see how an all-monies clause changes the relationship.
What if you do not have the full deposit in cash?
If you have found the property but do not have enough cash for the required contribution and costs, one common route is to use equity or additional property security. That is not the same as the lender advancing more against the warehouse. It either releases money from another asset or widens the security pool behind the debt, which changes what is at risk.
So the useful question is not "how do I get around the deposit". It is "what genuine source of cash or security can carry the gap, will the main lender accept it, and what will that structure stop me doing later?" The routes below solve different problems and should not be treated as equivalents.
| Route | How it works | What it actually commits you to |
|---|---|---|
| Equity in your family home | A separate facility or an increased limit secured against the house, with the proceeds going to the purchase, or the house added to the security pool for the commercial facility | The home becomes security for a business debt. A problem in the business now reaches the house, and the two are harder to separate later than they were to join |
| Equity in another commercial property you own | The existing property is added as security, or a facility against it releases funds to the purchase | Both properties end up tied to the same exposure, which constrains selling or refinancing either one independently |
| A personal guarantee | Not a source of funds. It is how a lender reaches you personally when the borrower is a company or a trust | Your personal position stands behind the entity's debt. Read what the guarantee covers, because some are written to secure all present and future obligations, not just this loan |
| Business assets and plant as supporting security | Machinery, vehicles and other business assets registered against the borrower, typically noted on the personal property securities register | Usually supports the file rather than raising the advance against the land, and it can conflict with existing equipment finance already registered over the same gear |
| A deposit bond or bank guarantee at exchange | An instrument the vendor accepts in place of a cash deposit at exchange, subject to the contract permitting it and the vendor agreeing | It bridges the deposit only. The full settlement figure still falls due on the day, so it moves timing and does not reduce what you need |
| A longer settlement negotiated in the contract | More time between exchange and settlement to assemble the cash, sell an asset or complete a refinance | Nothing extra in security terms, which is why it is the most underused option. It costs you negotiating room on price and it is agreed before you sign, not after |
| A shorter, more expensive facility behind the main loan | A second mortgage or private facility sitting behind the commercial mortgage, covering a defined gap for a defined period | A real exit has to exist before you take it. It solves a timing problem well and a structural problem badly, and it is the most expensive money in this table |
Routes as they are commonly used, not an offer and not a recommendation. Availability, structure and cost differ by lender and by transaction, and no rates, ratios or amounts appear here. Take any security document to your solicitor before you sign it.
Three things are worth being deliberate about before you agree to any of this.
Adding security does not fix a file that is thin on income or thin on the asset. If the building is specialised or the evidence does not support the commitment, more security can change the answer at the margin, but it is being used to cover a different problem and it is usually the wrong tool. Work out which of the three variables is actually short first, because that is what the derivation in the previous section is for.
Joining securities is quick and separating them is a project. Once two properties sit behind the same exposure, selling one, refinancing one or releasing one becomes a negotiation rather than a decision. Be explicit at the outset about which properties are tied to which facility, and read getting off cross collateralisation before you agree rather than after. If you are weighing whether to put up residential or commercial security in the first place, which security to put up on a business purchase covers the trade directly.
Read the guarantee, not the summary of the guarantee. What it secures, who else has signed, whether it is capped, and what has to happen before it can be called are all in the document and none of them are in the conversation about it. Where the family home is what is being put up, the consequences are set out at length in the second mortgage guide, and this is the point in the transaction to get advice rather than the point after signing.
What cash do you need at settlement beyond the deposit?
The deposit is not the full cash requirement. The amount you need to reach settlement is the purchase contribution plus the transaction costs and any tax or valuation shortfall that the property facility does not cover. In our broking, this is a recurring source of late surprises because several smaller obligations are confirmed after the headline loan amount is already understood.
Use the table as a settlement-cash checklist, then have your solicitor and accountant replace the generic entries with the numbers and tax treatment on your own contract.
| What falls due | When | Can it usually be borrowed? |
|---|---|---|
| Deposit on exchange | At exchange under the contract, often before the lender has issued property-specific formal approval | Not usually from the purchase facility. It may come from cash or equity released elsewhere, subject to the main lender accepting the source and structure |
| Balance of the purchase price | At settlement | Yes. This is the core purpose of the property advance, subject to the lender amount and settlement adjustments |
| Transfer duty | State-specific. Liability, lodgement and payment dates are not the same in every jurisdiction, and payment can be required before or by settlement | Often funded from the buyer's cash rather than the property advance. Victoria has a separate transition-loan program for eligible purchases entering its reform |
| Goods and services tax on the purchase price | At settlement where the contract requires an additional GST amount or otherwise allocates GST to the price; the treatment can differ for a going concern or margin-scheme sale | Do not assume the property loan covers it. Whether a registered buyer can claim a GST credit depends on the acquisition and the tax treatment, and no acquisition credit is available where the margin scheme applies |
| Legal and conveyancing | Through the transaction, some of it before you know whether the deal proceeds | Usually paid from cash. Some facility structures may capitalise limited lender or legal costs, so check the offer rather than assuming either way |
| Commercial valuation | Usually during assessment and before formal approval | Varies. The borrower may pay up front, the lender may absorb it, or it may sit inside facility fees. If you pay a third-party valuation fee, do not assume it is refundable |
| Lender establishment and facility fees | At settlement | Sometimes capitalised into the facility, sometimes required in cash. Varies by lender and by structure |
| Adjustments for rates, land tax and outgoings | At settlement, calculated by your solicitor | No. Small individually, and routinely underestimated as a group |
| Building, pest and environmental reports | During due diligence, before the finance clause expires | Usually buyer-funded. The scope depends on the property history, intended use and what the lender or legal due diligence requires |
General planning only. A facility can capitalise some costs in one structure and require them in cash in another. The contract, tax treatment, lender offer and settlement statement decide the actual cash figure.
Three lines deserve special attention. The valuation is commonly ordered before formal approval, and if the lender's assessed value is below the contract price the shortfall increases the amount you must find unless other approved security carries it. GST can be a timing problem, a different purchase-price treatment or no acquisition credit at all depending on the contract, which is why the GST section below needs to be read before exchange. And settlement adjustments arrive late, because your solicitor can only finalise them when the current rates, outgoings and other figures are available.
If you want the numbers side of this worked through for a single unit purchase rather than in the abstract, our companion piece on the deposit and settlement cash on a warehouse or industrial unit takes the same structure and applies it to one transaction. Owners who already hold a factory and are funding the next one from equity rather than cash should read how a manufacturer's property stack is usually built, because the sequencing question there is different.
Scenario A, the buyer who had the deposit and was still short
A buyer exchanges on a light industrial unit with the deposit sitting ready and a lender indication in hand. The facility is approved without difficulty. In the last fortnight the solicitor's settlement statement lands and the picture changes: duty, the adjustments for rates and outgoings, the fees payable at settlement and the tax on the purchase price were all treated as details to sort out later, and later has arrived. The deal was never marginal on the loan. It became marginal on the cash, and the only levers left that late are an extension, a top up secured elsewhere, or a request to the vendor that the buyer has no leverage to make. Every one of those is worse than reading this table before exchange.
Should you occupy the building yourself or lease it out?
Two paths run through an industrial purchase: you occupy the building with your own business, or you hold it as an investment and rely on rent. The lender can be looking at different repayment evidence in each case, which changes the documents, lease analysis and property-risk questions. Decide the path early so the application is built around the income the lender is actually being asked to rely on.
| What changes | Owner occupier | Investor |
|---|---|---|
| What repays the loan | The trading business that occupies the building. The property is a cost line to that business, not an income source | Rent from a tenant. The property is the income source, and the business risk sits with someone else |
| What income evidence is tested | Business financials, activity statements and bank conduct, because the operating business is the borrower in substance | The lease, the tenant's standing and the rent roll, with the borrower's own position often secondary |
| How a lease is read | There is usually no lease, or a lease from you to yourself, which a lender will look through to the trading entity underneath | The lease is the asset. Term remaining, options, review mechanism, outgoings recovery and the tenant's covenant all get read closely |
| What happens if the tenant leaves | Not applicable. The risk is that the business stops trading, which is a business risk rather than a vacancy risk | Repayment stops until the space is re-let. This is the central question, and it is why the re-lettability of the building drives the whole file |
| Which documentation path usually fits | Full documentation where the accounts are current, low documentation where they are not | Lease documentation where the lease carries the file, full documentation where it does not |
| What changes if you occupy part and let the rest | Both tests apply at once. The occupied part is assessed on the business, and the let part on the lease | Both tests apply at once, and the mix matters more than either part on its own |
The dividing line is not ownership, it is what the lender is being asked to rely on. An owner occupier is asking a lender to lend against a business that happens to need a building. An investor is asking a lender to lend against a building that happens to have a tenant. Those are different credit questions, and the buyer who describes themselves as one while the file reads like the other loses time at the worst point in the process. If your landlord has offered you the building you already occupy, that particular transaction has its own dynamics and its own leverage, and they are set out in the guide on buying your premises from your landlord and in the practical note on what happens when the offer arrives.
What changes when you occupy part of the building and let the rest
Occupying part and letting part puts both tests on the file at once, and the mix decides which one leads. Where the occupied portion carries most of the value, the file usually runs as an owner occupier file with the rental income treated as support. Where the let portion dominates, it runs as an investment file and the leases become the primary evidence. What buyers underestimate is the documentation load: you end up supplying the business evidence and the lease evidence, and a gap in either can hold the whole file. Where the income is genuinely passive and the building is held for the return rather than the use, the assessment looks closer to a freehold passive investment than to an operating purchase.
Should you buy the warehouse or keep leasing?
Buying is not automatically better because the loan repayment looks similar to the rent. It is stronger when the site suits the business for the long term, the business can still carry enough working capital after the deposit and acquisition costs leave the account, and ownership gives you control or stability that is worth tying capital to the property. Leasing is stronger when the business needs that capital for stock, staff, equipment or growth, or when the required location or floor area is likely to change.
The practical comparison is post-purchase liquidity, total occupancy cost, property flexibility and the return the same capital could earn inside the business. Stress-test the purchase with the settlement cash already gone, not with the deposit still sitting in the bank. The detailed modelling belongs in the buy against lease comparison; this guide takes over once buying is a live option and you need to know whether the finance and property actually work.
Who should own the warehouse: the trading business, a separate entity, a trust or an SMSF?
Choose the buying entity before the contract is signed. The structure changes the borrower, the guarantees and evidence the lender may ask for, whether the trading business and property owner have to be assessed together, and how easy the property is to separate from the business later. Tax, duty, land tax, asset-protection and capital-gains outcomes are not broker questions, but the finance file changes immediately with the entity.
| Buying structure | What changes in the finance assessment | What to resolve before the contract |
|---|---|---|
| Trading company buys the property | The property and operating business sit in the same borrower story, so business financials, liabilities and property security are read together | Whether keeping the property inside the trading entity fits the legal, tax and future-sale plan |
| Separate property company or trust buys it | The lender can still require information from the trading business that will occupy the premises, plus guarantees, ownership details and any related-party lease | Who owns the property, who borrows, who guarantees, and what lease or occupancy arrangement sits between the entities |
| Individual or family structure | The legal owner and borrower structure changes, but the lender may still rely on the operating business for repayment evidence where that business occupies the property | Personal exposure, state duty and land-tax treatment, and the future transfer or succession plan with your advisers |
| Self managed super fund | This moves into a separate SMSF and limited-recourse borrowing path with different legal documents and lender requirements | Fund eligibility, trustee and holding structure, market-terms lease where a related business occupies the premises, and advice before signing |
Finance workflow only, not structuring, tax or legal advice. The right entity depends on the buyer. For SMSF property, MoneySmart says business premises can be leased to a related business where the rules are followed and the lease is at market rates, and warns that incorrectly structured loan or property documents can be difficult to unwind. Source: MoneySmart, SMSFs and property, updated 23 July 2026, read 2 September 2026.
A related-party lease also needs to be described accurately to the lender. A lease between your own property entity and trading business does not automatically turn the application into an arm's-length lease-documentation product. The lender may look through that rent to the trading business that ultimately has to produce the cash. Have the accountant and solicitor settle the entity and lease position early, then have the finance application built around the structure that actually exists.
Buying through a self managed super fund
An SMSF can hold qualifying business premises and, where the rules are satisfied, lease them to a related business at market terms. Borrowing uses a separate limited-recourse structure and the documents need to be right before the transaction is committed; MoneySmart specifically warns that incorrectly set up loan or property documents can be difficult to alter or unwind. This is why an SMSF purchase is not just another company or trust variation. Start with what a self managed super fund can and cannot buy, and take fund-specific legal, tax and financial advice before signing.
What does a lender look for in a warehouse or industrial property?
Two industrial properties with the same contract price can produce different lender advances because the security is not interchangeable. The core property question is how readily the building could be used, re-let or sold to another occupier if the original plan changes. Zoning, title, access, site utility, specialisation, environmental history and the local leasing market are all ways of answering that question.
| Feature | Easier to fund | Harder to fund |
|---|---|---|
| Building form | Clear span shed, regular bay depth, adequate internal height, a floor plate another occupier could use unchanged | Purpose built and specialised: cold storage rooms, food production fitout, heavy racking tied to one process, plant integrated into the structure |
| Zoning and permitted use | Zoned for the use it is being put to, with no permit conditions that expire or attach to the current occupier | Use relies on a permit, a consent or a non conforming right, or the zoning is under review |
| Land to building ratio | Enough hardstand, truck access and parking for the building's size, with room to move a vehicle | Building covers most of the site, so access, loading and any future extension are constrained |
| Title | Freestanding site on its own title, clear boundaries, no encroachments | Strata industrial unit with a restrictive scheme, shared access or an owners corporation with unresolved issues, or a site with an easement through the useful part |
| Location | Inside an established industrial precinct with other occupiers, transport access and a visible leasing market | Isolated, or a lone industrial site surrounded by other uses, where the pool of alternative occupiers is thin |
| Environmental history | Uses with no contamination history, or a site with a clean report already in hand | Former fuel storage, chemical handling, metal finishing or waste use, or any history that puts a report on the critical path |
| Access and services | Truck turning circle, functioning loading, three phase power and services adequate for industrial use | Access shared with another occupier, no turning room for a heavy vehicle, or services that need upgrading for the intended use |
Read down the harder column and a pattern appears: each one narrows the pool of people who could take the building on. A clear span shed in an industrial estate has a deep pool. A purpose built facility with a process embedded in it has a shallow one, sometimes a pool of one, and a valuer will say so. This is what people mean when they call a property specialised, and how that assessment is actually performed is set out in how lenders value a specialised commercial property and in the broader piece on what a commercial valuation actually tests.
| Building type | How a lender generally reads it | Why |
|---|---|---|
| Standard warehouse or distribution shed in a precinct | Easier | Deep pool of alternative occupiers and a visible leasing market in the same precinct |
| Logistics depot with truck access and hardstand | Easier | The features that make it work are the features the next occupier also needs |
| Bulky goods premises | Easier | Wide potential occupier pool across retail and light industrial uses |
| General workshop with adequate services | Depends on location | The building is generic, so the precinct and the access do the deciding |
| Showroom with warehouse behind | Depends on location | Turns on the strip it sits in and whether the two uses can be split or re-let separately |
| Vacant industrial land in an active precinct | Assessed differently | There is no building to test, so the assessment moves to the land, the zoning and what can be built |
| Cold storage where the refrigeration is the building | Harder | Fitout is expensive to replicate and expensive to remove, so value often lands closer to the shell |
| Food production premises fitted to one process | Harder | The fitout suits one operator, and the next occupier is likely to strip it |
| Buildings with heavy plant built into the structure | Harder | Plant and property blur, and what is being secured becomes harder to define and to sell |
| Sites with an unresolved contamination history | Harder | The liability is attached to the land and it sits on the critical path until a report closes it |
| Strata industrial units in restrictive schemes | Harder | By-laws, shared access and the owners corporation can limit both the use and the resale |
| Isolated sites with no comparable sales | Harder | A valuer has nothing to compare it to and no evidence of a leasing market |
Indicative reading of how these asset types are generally assessed, not lender policy and not a statement about any particular building. Appetite differs between lenders and moves over time.
The asset types matter here, because appetite is not uniform across them. Cold storage and food production carry fitout that is expensive to replicate and expensive to remove, so the valuation often lands closer to what the shell is worth than to what the operator paid. Distribution and logistics buildings are usually the easiest of the group, because the pool of alternative occupiers is deep. Workshops and showrooms sit in between and turn on location. Where a second mortgage or a private facility is in the picture, the valuation lens changes again, and industrial property valuation through a second mortgage lens explains how.
What should I check before I sign a contract for a warehouse?
Before you sign, check the property facts that can change both your ability to use the building and the lender's view of the security. Start with the contract or listing, zoning and permitted use, title or strata position, existing lease, access, services, environmental history, building compliance and the tax wording. The goal is not to replace professional due diligence. It is to surface expensive questions while you can still negotiate the contract and finance period around them.
| What the listing says | What to actually check | Why it matters to the funding |
|---|---|---|
| "Plus GST" or nothing at all about tax | Whether the price is stated as inclusive or exclusive of the tax, and whether the contract contemplates a going concern or margin scheme treatment | The contract wording and whether the sale is taxable, GST-free as a going concern or uses the margin scheme. A taxable sale does not automatically mean the buyer gets the same GST back later |
| A zoning code or a phrase like "industrial 1" | The actual planning certificate, whether the current use is permitted as of right, and whether any permit attaches to the occupier rather than the land | A use that survives only under a permit or a non conforming right narrows the buyer pool and shows up in the valuation |
| "Currently leased" or "tenanted investment" | The remaining term, the options, the review mechanism, who pays outgoings and what the tenant actually is | On a lease documentation path the lease is the file, so a short remaining term or a weak covenant moves the whole assessment |
| A floor area, sometimes without a site area | Both numbers, and what is left over as hardstand, loading and parking once the building footprint is taken out | A building that covers most of its site constrains access and future extension, which narrows who else could use it |
| "Suit owner occupier" or "ideal for manufacturer" | Whether the fitout described is generic or built for one process, and what it would cost the next occupier to strip | Specialised fitout is where the gap between price paid and value assessed opens up |
| Nothing about the building's history | What the site was used for before, particularly fuel storage, chemical handling, metal finishing or waste | Former industrial uses can trigger environmental investigation, cleanup or management questions. Put the history on the due-diligence critical path rather than waiting for the valuation to raise it |
| "Unit 4" or a lot number | Whether the title is strata or freehold, and if strata, the by-laws, the shared access and the state of the owners corporation | A restrictive strata scheme limits both the use and the resale, and lenders read those schemes closely |
| "Three phase power", "high clearance" or "container access" | The actual electrical capacity, internal clearance, loading arrangement, truck turning path and whether access depends on shared land | A marketing label is not a service specification. If the building needs expensive upgrades or cannot support the intended operation, that can affect both buyer demand and valuation |
| Sprinklers, fire services or recent refurbishment | What approvals, certificates, essential-safety measures and building records exist for the works and current use | Unresolved compliance or undocumented works can delay legal due diligence, insurance or lender conditions and can reduce the pool of future occupiers |
| Industrial unit in a complex | Owners-corporation or body-corporate records, levies, special levies, insurance, common-property obligations, by-laws and any planned capital works | The lot is not economically separate from the shared scheme. Restrictions, unresolved works or high shared costs affect cash flow, use and resale |
A buyer-side filter, not legal, planning, tax, engineering or environmental advice. State rules differ. EPA Victoria says former industrial and commercial sites may be contaminated and recommends a potential buyer consider a preliminary site investigation where no assessment exists; the New South Wales Environment Protection Authority says its notified-sites list is only a starting point and absence from the list does not prove a site is clean. Sources read 2 September 2026: EPA Victoria and the New South Wales Environment Protection Authority.
From our broking, zoning, permitted use and environmental history are recurring causes of late property questions on industrial files. A business may be operating from a site under permissions or conditions that need to be understood before a new owner relies on the same use. Environmental history belongs on the critical path too: a concern is not automatically fatal, but it can change the report scope, timing, valuation and conditions. If something is found, see what happens when contamination is found on a security property.
In practice the green flag and red flag list is the fastest filter to run before you spend money on due diligence, and the factory premises version of that list is written for manufacturers looking at exactly these buildings. If you already have a valuation in hand and the number is not what you expected, what to do when a commercial valuation lands under the contract price covers the options. And if you are putting existing property up to support the purchase, be deliberate about how the securities are tied together, because untangling them later is its own project.
Scenario B, the specialised building valued on what else it could be
A buyer contracts on a purpose built facility fitted out for a single production process, at a price that reflects what the fitout cost to install. The valuation comes back assessed on the building's likely value to the next occupier rather than to this one, because the valuer's job is to answer what the security is worth if it has to be sold. Nothing about the business was questioned and nothing about the buyer was wrong. The gap sits between the price of a building fitted for one operator and the value of a shell that would have to be stripped for anybody else, and it has to be met in cash, in a smaller facility, or in a renegotiated price.
Do you pay GST when you buy a warehouse or commercial property?
GST does not land the same way on every warehouse purchase. A commercial or industrial sale can be a taxable supply, a qualifying sale can be GST-free as a going concern, and the margin scheme can change how GST is calculated on a taxable sale. The buyer's cash requirement and GST-credit position depend on the contract and the transaction, so settle the tax treatment before you rely on a settlement number.
| Treatment | What it means at purchase | Buyer GST-credit point |
|---|---|---|
| Taxable sale under the ordinary rules | Where the seller makes a taxable supply, the contract determines whether the stated price is GST-inclusive or whether GST is added to it | A GST-registered buyer may be entitled to a GST credit to the extent the acquisition is creditable, subject to the normal rules |
| GST-free going concern | No GST is payable on the supply if the going-concern conditions are all met, including the required written agreement and the purchaser being registered or required to be registered | There is no GST on the purchase price to claim back, although credits may still arise on eligible transaction costs |
| Margin scheme on a taxable sale | GST is worked out under the margin-scheme rules rather than simply applying the ordinary rule to the full price, and the parties must have the required written agreement before settlement | The purchaser cannot claim a GST credit for GST included in a purchase made under the margin scheme |
Tax summary only. Your accountant and solicitor need to read the actual contract and transaction. ATO sources read 2 September 2026: Selling a going concern, the ATO's commercial-property and margin-scheme ruling, and GST at settlement.
The two contract points buyers most often confuse
A going concern is GST-free only if the conditions are met
The ATO's conditions include that the sale is for payment, the purchaser is registered or required to be registered for GST, the parties agree in writing that the supply is of a going concern, the supplier provides what is necessary for the continued operation of the enterprise and that enterprise is carried on until the day of supply.
Source: Australian Taxation Office, Selling a going concern, read 2 September 2026 at ato.gov.au. Whether the contract in front of you satisfies the test is a tax and legal question.
A margin-scheme purchase does not give the purchaser an acquisition GST credit
The ATO states that where the margin scheme applies to the sale, the purchaser cannot claim a GST credit for the GST included in the price. That makes "fund it now and claim it back" the wrong mental model for that transaction.
Source: Australian Taxation Office, GST at settlement, margin scheme section, read 2 September 2026 at ato.gov.au.
The separate purchaser GST-withholding-at-settlement regime is principally directed at new residential premises and potential residential land. The ATO lists commercial property as excluded from that withholding obligation. That is different from whether GST forms part of the commercial sale price itself.
If a taxable purchase is creditable to you, the cash-flow question is the timing between settlement and the activity statement in which the credit is available. If the sale is a going concern, the purchase-price GST treatment is different. If the margin scheme applies, there is no acquisition GST credit. Those are three different funding pictures, which is why the GST clause belongs in the finance conversation before exchange rather than in the week of settlement.
Do you pay stamp duty on commercial property, and what did Victoria change?
Commercial and industrial property purchases are generally subject to state or territory transfer duty unless a specific exemption or concession applies, but the timing is not uniform. The buyer needs to distinguish when the duty liability arises, when the transaction must be lodged and when payment is actually due. Victoria has an additional commercial and industrial property tax reform that changes later transactions for qualifying property.
Victoria, the reform and the loan that sits behind it
Commercial and industrial property does not enter the Victorian reform automatically
The State Revenue Office states that the reform "commenced on 1 July 2024" but that commercial and industrial properties "do not automatically enter the CIPT reform from 1 July 2024". A property enters only through an entry transaction, which must meet every one of its conditions: the transaction happens on or after that date, under an agreement entered into on or after that date, it is a qualifying dutiable or landholder transaction, the property has a qualifying use on the date of the transaction, the transaction relates to an interest of 50 per cent or more, and duty is chargeable on 50 per cent or more of the unencumbered value.
Source: State Revenue Office Victoria, Entry into the reform, page updated 26 August 2026, read 2 September 2026 at sro.vic.gov.au. Summarised, not exhaustive. Whether a specific transaction is an entry transaction is a question for your solicitor.
Once a property is in, the tax is one per cent of unimproved land value, and it starts ten years later
The annual tax applies at a flat rate of one per cent of the property's site, or unimproved, value each year while the qualifying use continues, with no tax-free threshold, and it begins in the first calendar year after the ten year transition period that starts with the entry transaction. During that transition, later dealings in the property may be exempt from duty, subject to conditions and to the qualifying use continuing. A reduced rate applies to eligible build to rent property.
Sources: State Revenue Office Victoria, Understanding commercial and industrial property tax, page updated 24 August 2026, read 2 September 2026 at sro.vic.gov.au; Victorian Department of Treasury and Finance, Commercial and Industrial Property Tax Reform information sheet, October 2024. The duty exemption on later dealings is conditional, not automatic.
The Victorian transition loan is a separate 10-year debt with its own eligibility and credit test
Eligible first purchasers of property entering the reform may apply to finance up to the land-transfer duty amount, capped at $1.93 million, on eligible property with a sale price no more than $30 million. TCV requires prior property-finance approval from an approved lender and currently publishes a credit metric capping total interest-bearing indebtedness, including the transition loan, at a stated share of the eligible property value. The loan has 10 annual principal-and-interest instalments and is secured by a first-ranking statutory charge on the land.
Source: Treasury Corporation of Victoria, Commercial and Industrial Property Tax Reform transition loan, current page read 2 September 2026 at tcv.vic.gov.au. TCV says that metric is an input to its credit assessment, not the sole determinant, and reserves the right to vary its metrics, so read the current figure at the source.
Victorian figures only. The reform applies in Victoria and nowhere else, and nothing in this block describes the position in another state. Conditions and eligibility change, so read the current position at the source before relying on it.
| State | What applies | When it falls due |
|---|---|---|
| Victoria | Duty applies to the entry transaction. Where that transaction takes the property into the commercial and industrial property tax reform, later dealings may be exempt from duty and the annual tax begins after the ten year transition | At the transaction, with the reform's annual tax beginning in the first calendar year after the ten year transition period |
| Queensland | Transfer duty applies to a dutiable transaction. Queensland Revenue Office expressly distinguishes being liable for duty from actually paying it | Lodgement can be required before settlement. For relevant electronic transfer agreements QRO publishes a lodgement rule based on the contract and unconditional dates, with payment generally due within 14 days after actual lodgement; an assessment or self-assessment confirms the amount and due date |
| New South Wales | Transfer duty is generally payable when property is bought or transferred | By the earlier of settlement, where the transaction involves a property transfer, or three months after signing the contract or other relevant transaction date |
Three state examples only. The other states and territories are not described here. Sources read 2 September 2026: State Revenue Office Victoria; Queensland Revenue Office, including liability versus payment and electronic conveyancing dates; and the New South Wales revenue authority, who pays transfer duty and when. Rates, thresholds, concessions and transaction-specific deadlines must be checked for the contract in front of you.
Now the part that has a direct finance consequence. The Victorian transition loan is not a fallback for a buyer who cannot obtain the property finance. TCV requires finance approval from an approved lender, and the transition loan has its own credit assessment, debt cap and security. Run the commercial mortgage and transition-loan eligibility in parallel rather than treating the duty loan as something to solve after the bank approval.
The first issue is sequencing. TCV asks for the documentation provided to obtain the property-finance approval and says applicants should allow enough time for its assessment before settlement. If the duty loan is part of your settlement cash plan, put it on the transaction timetable from the beginning.
The second issue is total debt. TCV currently publishes a maximum credit metric for total interest-bearing indebtedness, including the transition loan, measured against the eligible property value on a standalone basis, and also assesses serviceability. That means the duty loan and the commercial mortgage cannot be modelled as unrelated commitments.
Two further points on the Victorian side, both of which affect entry rather than the funding. The entry test looks at whether duty is chargeable on at least half the property's value, and the reduction in duty for commercial and industrial property in regional Victoria is disregarded when that test is applied, so a regional concession does not by itself keep a property out of the reform. Regional purchases carry other finance consequences too, and how postcode affects property finance covers those. The State Revenue Office holds the detail on entry conditions, consolidations and subdivisions, and this page deliberately points there rather than restating rules that change.
Outside Victoria, the practical planning point is still the timing, but use the correct state process. Liability, lodgement, assessment and payment can occur on different dates. Have your solicitor or conveyancer put the actual duty amount and due date into the settlement cash plan rather than assuming it is simply another settlement-day adjustment.
What documents do you need for a warehouse loan, and when do full doc, low doc and lease doc apply?
Start with three packs: the property, the borrower and the transaction. The property pack is the listing or contract plus lease and property details; the borrower pack is the financial evidence appropriate to the application; and the transaction pack is the cash, existing debts or security, buying entity and contract dates. Full doc, low doc and lease doc then describe which evidence the lender relies on most, not how much you are automatically entitled to borrow.
- Property pack: address, listing or contract, purchase price, intended use, lease and variations if tenanted, and any title, strata or property reports already available.
- Borrower pack: entity and ownership details, current financial statements and tax returns where available, BAS and trading bank statements where relevant, plus details of existing debt.
- Transaction pack: cash or usable equity, other property being offered as security, finance-clause and settlement dates, and the agreed buying entity and GST position once your accountant and solicitor have confirmed them.
| What changes | Full documentation | Low documentation | Lease documentation |
|---|---|---|---|
| What the lender assesses | The borrower's financial position from prepared accounts, tested against the proposed commitment | The borrower's position from alternative evidence: activity statements, bank conduct, an accountant's confirmation | The income the property itself produces under the lease, with the borrower's own position secondary |
| What you supply | Financial statements, tax returns, activity statements and bank statements, current rather than last year's | Activity statements, trading bank statements and a declaration or accountant's letter, depending on the lender | The lease and any variations, evidence the rent is being paid, and details of the tenant |
| When it fits | The accounts are prepared, current and show the position clearly | The business is trading well but the accounts lag, are being restructured, or do not yet show a full year | A tenanted investment property where the lease is genuinely the strength of the file |
| What it costs you in flexibility | Least restrictive of the three, and usually the widest lender choice, but only if the paperwork is genuinely ready | You trade paperwork for pricing and for a narrower field of lenders, and the file gets read more closely elsewhere | The file lives or dies on the lease, so a short remaining term, a weak tenant or an unusual review mechanism moves the whole assessment |
No ratios, bands or minimum lease terms appear in this table. Those settings are lender policy, they move, and every published version of them we found circulating on this topic was unsourced.
The choice is really a question about your own paperwork. If the accounts are prepared, current and tell a clean story, full documentation is usually the straightest road and it keeps the widest field open. If the business is trading perfectly well but the accounts lag reality, which is the normal condition of a self-employed file rather than a red flag, low documentation exists precisely for that gap, and what a low doc facility is and what it costs sets out the trade. If the building comes with a tenant and the rent is the real strength of the deal, lease documentation puts the assessment where the income is, and how a lease doc commercial property loan works covers what the lease has to carry.
Three practical notes that matter more than any published band.
A path is a lender decision, not a borrower election. You can present a file as low documentation and still be assessed on a full documentation basis if the lender's policy says so for that security or that structure. The same file goes to different lenders on different bases, which is most of what a broker is doing on an industrial purchase.
Newer entities are a documentation question before they are a credit question. A recently registered entity buying premises does not have the trading history a full documentation assessment expects, so the file is usually carried by the security and by the evidence available around it. That specific situation is set out in taking a business loan with a new ABN and property security.
The evidence landscape is moving. Data sharing has begun to change what a non-bank lender can see and how quickly, which shortens some low documentation assessments and changes what gets asked for. Open banking in non-bank commercial property lending tracks where that has got to. It does not change the underlying point: the path follows the evidence, and the evidence follows how your business is actually run.
How long does a warehouse purchase take to settle, and what if the bank says no?
There is no Australia-wide warehouse-loan settlement timeframe you can safely rely on. The dates that bind are the finance condition and settlement date in your contract, and the steps most likely to determine whether you meet them are the valuation, property due diligence, credit conditions, documents and any tax or settlement-cash issue. A lender turnaround only starts to become useful once the application and property information are complete.
The sequence to settlement runs in roughly this order, and the parts that slip are predictable.
| Stage | What happens | Who you engage, and what you pay for |
|---|---|---|
| 1. Before you offer | Establish the documentation path, get an indicative borrowing view, check the actual building, settle the buying entity and identify the likely GST and duty treatment | Broker and accountant. Nothing payable yet, and this is the cheapest stage to change your mind in |
| 2. Offer and contract review | Your solicitor reads the contract before you sign it: the tax clause, the length of the finance clause, the settlement date, what the vendor has disclosed | Solicitor. Legal costs begin here, and a finance clause that is too short is agreed at this moment and regretted later |
| 3. Exchange | Contracts exchange, the contractual deposit is paid and any finance condition begins to run. The lender may still be working through the property and formal approval conditions | Solicitor. The deposit comes from your own funds or from equity released beforehand, not from the loan |
| 4. Valuation instructed | The lender instructs or accepts a valuation on the security. Timing depends on valuer availability, property complexity, location and whether further information is required | Lender and valuer, usually coordinated through the broker or lender. Who pays and when varies by lender |
| 5. Due diligence | Legal, planning, building and, where the property history warrants it, environmental due diligence run alongside the finance assessment | Solicitor plus any building, planning or environmental specialists the property needs. Scope and cost depend on the site |
| 6. Formal approval and conditions | A formal approval arrives with conditions attached. Files stall quietly here, because each condition is somebody else's turnaround rather than yours | Lender, through the broker. Nothing further payable, but this is where the finance clause gets consumed |
| 7. Documents, then settlement | Loan documents are issued, signed and returned, and settlement is booked. The solicitor's settlement statement lands here, which is when the cash position stops being theoretical | Solicitor and lender. Duty, adjustments, lender fees and any tax on the purchase price all fall due at or around this point |
The order of a typical purchase, not a guarantee of sequence or timing. Individual transactions vary, and the dates that bind are the ones written into your contract.
On an older industrial site, put environmental history at the front of the list. If the history creates a contamination question, further investigation can become a critical-path item for the buyer, valuer or lender. That is easier to manage while the contract timing can still be negotiated than after the finance condition is almost spent.
What to do when the valuation comes back under the contract price
A valuation under the contract price is a cash problem with a fixed number of solutions, and the order you work through them decides how much the gap costs you. The first move is to read the report rather than react to the number, because a valuation that is low for a fixable reason, a missing lease, a wrong floor area, comparable sales that ignore the precinct, is a different problem from a valuation that is low because the building is specialised and the valuer is right.
From there the moves are these, in the order that usually makes sense. Ask your solicitor about an extension before anything else, because every other option needs time. Ask whether the valuer will consider additional information, which is a factual submission rather than an argument about the number. Test whether another lender would instruct its own valuation, remembering that you pay again and there is no guarantee of a different answer. Look at whether other security you hold can carry the difference, being deliberate about how the securities are tied together. Go back to the vendor on price, which works occasionally and only where the vendor believes the next buyer will hit the same wall. And decide, honestly, whether funding the gap from cash leaves you with enough left to settle everything else on the statement. The detail on each of those sits in the guide on a valuation shortfall at settlement.
Scenario C, the bank that withdrew late in the finance clause
A buyer with a signed contract and an indication in hand receives a decline while the finance condition is still running. The useful order is: the buyer gets legal advice on the contract clock immediately; the actual decline reason is established rather than guessed; and only then are alternative finance routes tested against that reason. The legal step protects time if an extension is available. The diagnosis decides whether another lender can solve the problem at all.
Protect the contract position first. If a decline, valuation problem or lender delay lands while a finance condition or settlement deadline is running, speak to your solicitor immediately about the contractual options and whether an extension should be requested. The vendor is not obliged to grant one. The point is to deal with the legal clock before spending the remaining time on another finance path.
Then diagnose why. In our broking, industrial declines usually fall into a small set of practical buckets: repayment evidence, valuation, structure, property type or a condition that could not be satisfied in time. The route depends on the bucket. How a non-bank reads a file the bank has declined is written for that diagnosis.
Then work the routes, in order of fit. A non-bank or specialist lender is the usual next step where the file is sound but sits outside a bank's policy box, and on a first commercial purchase in particular, private lending on a first commercial property move explains where that lane genuinely helps and where it does not. Private mortgage lending, a second mortgage behind an existing facility, or a caveat loan are all shorter, more expensive instruments with a defined job: solving a timing problem, not fixing a structural one. Where the pressure is purely the calendar, fast settlement finance sets out what can realistically be arranged and what it costs. Every one of these is worth taking to your solicitor before signing, and the cost of the short-term option should be weighed against the cost of losing the deposit, not against the rate on the facility you did not get.
Which lenders do not ask for bank statements, and what that actually means
Asking which lenders do not ask for bank statements is asking the wrong question, and the answer that helps is a different one: what does it mean when a lender does not ask, and what should you check about that lender instead? A lender that verifies less is not being generous. It is pricing the missing information, securing itself differently, or both, and the reduced paperwork is bought with something. Usually that is rate, sometimes a shorter term, sometimes a lower advance against the property, often all three.
So check the lender rather than the document list. Are they licensed for the lending they are doing. What is the total cost including fees, not the headline rate. What happens at the end of the term, and is there a realistic exit. What are the default provisions and what triggers them. Is the security arrangement one you can unwind later, or does it tie up property you will want to use again. Those questions matter far more than whether twelve months of statements are requested, and a lender who cannot answer them plainly has told you something useful.
What happens after settlement on a commercial property loan?
After settlement, the finance risk shifts from getting the deal done to keeping the facility and property ready for the dates already written into them. Commercial loans can have review, interest-only expiry or facility-maturity events; investment properties have lease critical dates; and the tax, insurance and property-cost position changes once you are the owner. Put those dates into a calendar while the settlement file is still open.
| What happens | When it lands | What to have ready |
|---|---|---|
| The activity statement carrying the tax on the purchase | The reporting period in which your accountant determines the purchase treatment, where a GST credit is available | The settlement statement, tax invoice or contract evidence and the confirmed tax treatment. A margin-scheme purchase does not create an acquisition GST credit |
| The first land tax or council assessment in your name | The assessment cycle after you become the owner, which is often the year following settlement | An expectation that it is coming, and where a tenant is in place, clarity on what the lease lets you recover as outgoings |
| Building-insurance renewal and lender requirements | At renewal and whenever the lender or lease requires evidence of cover | The current policy, insured parties and any lender interest or property-specific cover requirements checked against the facility and lease |
| The facility review | If and when the facility terms or lender process require a review | Current financials or BAS, plus lease and property information the lender requests. Do not assume every commercial facility has the same review cycle |
| A revaluation of the security | When the facility, a refinance, a request for more lending or the lender's risk process requires one | Anything that has improved the building or the lease since purchase, because it will not be assumed |
| Lease expiry, an option date or a tenant leaving | On the lease dates, which is the single most predictable risk on an investment file | A view on re-letting well before the date, because on a lease documentation file the lease is the income the lender assessed |
| The end of an interest only period, or facility expiry | On the dates in your facility, which are usually shorter than a residential borrower expects | A refinance or repayment plan started well before the date, not at it |
| In Victoria, the annual tax after the transition | In the first calendar year after the ten year transition period that starts with the entry transaction | A note of the entry transaction date, and the current position read at the State Revenue Office rather than assumed |
Descriptive of how commercial facilities and property obligations generally behave, not the terms of any facility and not tax advice. Your facility terms, your lease and your accountant govern the specifics.
The review, interest-only expiry and facility-maturity dates are separate events. Some facilities have all three; some do not. The practical rule is to read the loan offer for the date and consequence of each one, then keep the financials, lease information and property records current enough that a renewal or refinance does not start from a scramble. Treat a repayment change and the facility itself ending as two different events with two different lead times, and diarise both from the loan offer rather than from memory.
The other item worth planning for is growth. The warehouse can become useful equity later, but the first facility can also reduce your room for equipment, vehicle, stock, working-capital or another property finance if its repayments consume cash flow or its guarantees and security package already tie up the assets the next lender wants. Before you accept the first facility, ask what is mortgaged, what sits under any general security agreement, whether the lender has linked other debts to those securities, and what has to happen to release one asset without refinancing everything.
If another site is part of the medium-term plan, the sequencing is set out in how a manufacturer's property stack is usually built. The early trap is solving today's warehouse purchase by tying several properties and business assets together more tightly than tomorrow's strategy can tolerate.
Patterns we see repeatedly on industrial and warehouse purchase files, written as practitioner observations rather than lender policy. No Switchboard-originated deposit band, LVR band, rate or turnaround promise appears on this page. The lender percentages cited earlier are public product examples used only to show that policy differs.
Patterns we see repeatedly on industrial and warehouse purchase files, written as what commonly happens rather than as lender policy. No figures appear here, deliberately: the argument earlier on this page is that published deposit and ratio numbers are not rules, and a Switchboard band would contradict that in the same scroll.
- The question that arrives first is almost always the deposit. The question that decides the file is almost always the building.
- Scale-backs on industrial files are driven more often by the valuer's view of who else could use the building than by anything in the borrower's income.
- What arrives late, in the order it usually arrives late: the environmental report on an older site, the lease and its variations where a tenant is in place, and the accountant's confirmation of how the tax is being treated on the sale.
- Declines cluster into three shapes: a building nobody else could use without spending money, a title or planning issue found after exchange, and a settlement cash position that was never planned.
- Files that run smoothly tend to look the same. The building is checked before the money is chased, and the finance clause is negotiated with the environmental report in mind rather than after it.
- The borrowers who are least surprised after settlement are the ones who understood before it that a commercial facility gets reviewed, and kept their financials current on that basis.
Basis: patterns observed across industrial and warehouse purchase files placed by Switchboard Finance, as at September 2026. Indicative only. This is not lender policy, not a quote, not an offer, and no approval likelihood is implied. Public lender product examples elsewhere on this page are cited to their sources and are not averaged into a Switchboard range. General information only, not financial advice.
A warehouse purchase is easiest to manage when you solve the decisions in the order they arrive. Check the building and intended use before you rely on the finance. Derive the contribution from the lender advance plus the real acquisition costs rather than from a generic deposit percentage. Read the contract, GST and duty treatment before the settlement cash becomes urgent. Then compare the facility on rate, fees, term, review and exit rather than on the headline rate alone. That sequence is what turns a commercial property loan from an indication into a purchase you can actually settle and keep.
Key takeaway: building first, lender advance second, full settlement cash third, and facility exit before you sign the loan.Frequently Asked Questions
There is no Australian rule fixing the deposit for a warehouse purchase. Your cash or equity requirement is the purchase price plus acquisition costs, less the lender advance, with any valuation shortfall added to your contribution. The lender advance depends on the assessed property value, repayment source, evidence and current lender policy. Public LVRs are product parameters, not a national rule.
There is no single bank maximum for commercial property. Current public lender pages publish different limits for different products and security types, and an individual lender can still offer less after it assesses the property and the file. Work from the lender's assessed value and written indication on the actual warehouse rather than from a generic market percentage.
There is no single warehouse-loan interest rate in Australia. The rate and total cost depend on the property, lender advance, borrower evidence, loan size, term, repayment type and fees. Compare the benchmark or reference rate, margin, establishment and valuation costs, facility term, review conditions and exit costs rather than comparing the headline rate alone.
Start with the property, borrower and transaction packs. Have the listing or contract, intended use and lease where relevant; entity and ownership details; current financial statements, tax returns, BAS or bank statements appropriate to the documentation path; existing debts and security; the cash or usable equity available; and the finance-condition and settlement dates. Exact lender requirements vary.
You can often get an indicative or conditional borrowing view before choosing the property, but it does not approve an unknown warehouse. Once you have a building, the lender may still require the contract or listing, valuation, intended use, lease information and property-specific conditions before formal approval. Use pre-approval as a budget filter, not as a substitute for property approval.
Equity in a home can sometimes be used by releasing funds against the home or by adding the home to the security structure for the commercial debt. Those are different arrangements, and either can put residential property behind a business-purpose obligation. Check how the securities are tied together, what has to happen to release the home later and whether the commercial lender accepts the structure before relying on it.
Do not treat pre-approval as approval of the warehouse you are about to bid on. The lender may still need the valuation, title, intended use, lease information and other property conditions, while an auction or unconditional contract can leave less contractual protection if finance does not complete. Have your solicitor review the auction contract and push the lender assessment as far as possible on the actual property before you bid.
The warehouse mortgage may not be the only security. Depending on the facility, a lender can also require personal guarantees, a general security agreement over business assets, or another property supporting the debt. Read the security documents for what each asset or guarantor secures, what is registered on the PPSR, and what has to happen to release security later, because those terms can affect future business borrowing.
A GST-registered buyer may be entitled to a GST credit where the acquisition is creditable, but not every warehouse purchase produces the same result. A qualifying going-concern sale is GST-free, and a purchaser under the margin scheme cannot claim an acquisition GST credit for the GST included in the price. The contract and your intended use need to be checked by your accountant and solicitor before you model the settlement cash.
Yes, because an early approval or indication can be conditional. A valuation, property issue, change in the borrower's position, unsatisfied condition or incomplete due diligence can still stop formal approval or settlement. If a problem lands while a contractual finance condition or settlement deadline is running, get legal advice on the contract position first and diagnose the finance problem immediately afterwards.
A self managed super fund can acquire business real property and, where the rules are satisfied, lease it to a related business at market terms. Borrowing through an SMSF uses a different legal and lending structure from an ordinary commercial purchase, so obtain fund-specific legal, tax and financial advice before signing a contract or arranging finance.
There is no Australia-wide settlement timeframe you can safely rely on. The finance condition and settlement date in the contract control the transaction, while valuation, property due diligence, credit conditions, loan documents and settlement cash determine whether you meet them. Build the timetable around the actual contract and property rather than a lender's average turnaround claim.
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