The easiest way to purchase a business park

Buying a business park means different lending criteria

Business parks fall into a specialist category for lenders because they combine multiple tenancies, often across industrial and office uses, with shared infrastructure and common areas. A commercial mortgage for this type of property involves higher loan amounts, longer assessment periods, and more detailed income verification than a standard office or warehouse purchase.

Consider a Richmond manufacturing business looking to consolidate operations by purchasing a five-unit business park in Dandenong South. The property generates rental income from three existing tenants and leaves two units available for the buyer's own use. The lender will assess both the investment return from tenanted units and the business case for owner-occupied space, which means providing profit and loss statements for the operating business alongside rental rolls and lease agreements for tenanted areas.

How lenders value business parks differently

Commercial property valuation for business parks depends on the income method rather than comparable sales. The valuer calculates net operating income from all tenancies, deducts outgoings, and applies a capitalisation rate based on property condition, location, and lease quality. A strata title commercial property within a business park may be valued individually, but lenders still consider the performance of the broader complex because vacancy in neighbouring units can affect resale value and tenant retention.

Richmond businesses often look beyond the inner city to growth corridors like Thomastown, Campbellfield, and Laverton North where business parks offer larger floor plates and better truck access. In these locations, valuations hinge on lease terms with anchor tenants and the strength of those tenancies. A property with two years remaining on key leases will attract a lower valuation and higher interest rate than one with five-year terms and built-in rent reviews.

What deposit and loan structure to expect

Most lenders require a minimum 30% deposit for business park purchases, which translates to a commercial LVR of 70%. If the buyer intends to occupy part of the property, some lenders treat the owner-occupied portion as higher risk and reduce the LVR to 65%. The loan structure often splits into an investment loan for tenanted areas and a commercial property loan for owner-occupied space, each with different rates and terms.

In a scenario where a buyer acquires a business park for use as both an operating base and an investment, the lender might offer a variable interest rate on the investment portion to allow flexibility as tenancies roll over, and a fixed interest rate on the owner-occupied portion to lock in repayments tied to business cash flow. Flexible repayment options matter if rental income fluctuates or if the business plans to sell units individually under strata once the market strengthens.

How tenancy mix affects borrowing capacity

A business park with long-term tenants on net leases, where tenants cover outgoings, will support a higher loan amount than a park with short-term agreements or high vacancy. Lenders calculate debt serviceability by taking net rental income and adding a portion of the buyer's business income if they occupy part of the property. The challenge comes when existing leases expire within 12 months, because most lenders either exclude that income or apply a heavy discount.

We regularly see buyers in Richmond underestimate how much weight lenders place on lease expiry profiles. A business park in Bayswater with four tenants might look solid on paper, but if three leases end within 18 months and there's no renewal clause, the lender treats it as partly speculative. That shifts the deal from commercial finance into a category closer to commercial development finance, with higher rates and shorter terms until new leases are signed.

When to use commercial bridging finance

Commercial bridging finance becomes relevant when a buyer needs to settle on a business park before selling an existing property or before tenants take occupation. It's a short-term funding tool, usually structured for six to 12 months, with interest-only repayments and an exit strategy tied to either refinancing into a standard commercial property finance facility or selling another asset.

As an example, a buyer identifies a business park in Moorabbin with immediate settlement required by the vendor. The buyer's existing Richmond warehouse is under contract but won't settle for another three months. A bridging loan covers the purchase, secured against both properties, and converts to a standard loan once the Richmond property sells and the deposit is available. Interest rates on bridging facilities sit higher than standard commercial interest rates, so the holding cost for those three months needs to factor into the overall acquisition budget.

Choosing the right broker for business park purchases

Access to commercial loan options from banks and lenders across Australia matters because business park deals don't fit a single lender's appetite. One lender might prefer parks with high-quality office tenants, another focuses on industrial occupiers with long lease terms, and a third will consider higher LVRs if the buyer has strong business financials and related industry experience. A commercial finance and mortgage broker compares policy across lenders and structures the application to align with the lender most suited to the specific tenancy mix and buyer profile.

Spark Financial Solutions works with Richmond businesses expanding into commercial property investment and can structure finance across mixed-use parks, strata subdivisions, and developments requiring progressive drawdown as tenants fit out their space. If the purchase involves upgrading existing equipment or buying new equipment for an owner-occupied unit, that component can be separated into equipment finance or asset finance to preserve the commercial loan for the property itself and keep the overall loan structure clean.

Whether you're consolidating your business into a larger space, buying an industrial property to generate rental income while you expand, or acquiring a park for eventual strata subdivision and sale, call one of our team or book an appointment at a time that works for you.

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