Good Commercial Property Investment

What makes a good commercial property investment?

Some factors to consider when investing in listed and unlisted property funds include, but are not limited to, stock market volatility, the ability to exit the investment (liquidity), the gearing of the properties in the fund and understanding the individual characteristics of the properties held by the fund. The characteristics which can be reviewed can include:

  • tenant demand
  • property valuation metrics
  • cash flow sustainability
  • WALE (Weighted Average Lease Expiry)
  • yield
  • tenant profile
  • age of building
  • NABERS ratings
  • outgoings
  • location etc.

If you are looking to invest in a commercial real estate asset through a fund manager, then it is important to know that your chosen property fund manager has experience appropriate to optimising your investment. Before investing, here are some important questions to ask about a fund manager;

  • How have they performed historically as a manager?*
  • What does their current investment portfolio look like (what are their core investment competencies)?
  • Does the manager outsource the management of the property portfolio, or do they internally manage it (do they have direct access to the tenants and properties)?
  • Do they have in place a framework for strong management of the asset going forward? This may include having in-house asset managers to maintain the property to the highest standard so the value is also maintained, but also facilities managers across the property so that tenant sentiment is a priority.

Over 20 years of experience have given Centuria an understanding of the commercial property market cycle, the geographical levers and demand for the particular types of commercial real estate. This helps with the acquisition and sale of commercial properties in our portfolio.

* Past performance is not a reliable indicator of future performance

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