Maybe you’re a business owner tired of paying rent to a landlord when you could be building equity. Perhaps you’re an investor who’s done well in residential and you’re ready to invest in the commercial world. Or maybe you’ve just run the numbers and realised that a small retail space or industrial unit could deliver good returns.
Whatever brought you here, buying commercial property is like buying a house. You need income to service the loan and cash or equity for a deposit.
But doing it alone? That’s like showing up to play chess when everyone else knows you think you’re playing checkers.
Why commercial property is having its moment
Commercial property has quietly become an attractive investment opportunity in New Zealand.
The rental yields typically outpace residential by a significant margin—we’re talking 4-6% (maybe more) net returns versus 2-4% in many residential markets. Commercial tenants often sign longer leases, giving you cash flow certainty.
For business owners, the equation is even more compelling. Why pay a huge sum in rent each year when you could be paying that same amount toward a mortgage on a property you’ll eventually own? The tax treatment can be favourable, you’re building an asset, and you’re protected from a landlord suddenly terminating your lease when you’ve spent years building your business in that location.
Commercial lending is similar to residential lending but more risk assessed
When you get a home loan, the bank is essentially running your application through a sophisticated computer system. Income? Check. Deposit? Check. Credit score? Check. Property valuation? Check. The whole thing is standardised, automated, and relatively predictable.
Commercial property lending is more complex. Every single deal is assessed individually because every commercial property is different. That retail space in a suburban shopping centre? Completely different risk profile from an industrial warehouse in a growth corridor. An office building with multiple tenants? Different again from a single-occupier commercial premises.
Banks assess:
- The quality and tenure of existing leases
- The location and its economic fundamentals
- The type of business operating there (some industries are considered higher risk)
- Your experience as a commercial property owner or operator
- The condition and compliance of the building itself
- Zoning and potential future use
- Your existing debt and business structure
How a Mortgage Adviser changes everything
This is where a Mortgage Adviser stops being “nice to have” and becomes essential. Not because you’re incapable of filling out forms, but because you’re trying to solve a puzzle with pieces you can’t even see.
- Access to the entire market including mainstream banks and non-bank lenders.
- Up-to-date knowledge of current lending appetites and the market
- Understanding of deal structure
- Ability to present your story including your situation, your experience, your business plan, and your property in a good light.
- Negotiating power and they are working for you, not the bank.
Common scenarios where a Mortgage Advisers adds value
First-time commercial buyers: You’ve never bought commercial property before, which makes you higher risk in banks’ eyes. A Mortgage Adviser knows which lenders are comfortable with first-timers and how to position your application to overcome inexperience concerns.
Complex business structures: Your business operates through multiple entities, or you have a family trust involved, or you’re buying jointly with a business partner. These scenarios create complications that Mortgage Advisers handle routinely.
Overseas buyers or expats: You’re a New Zealand citizen living abroad wanting to invest back home, or you’re a temporary resident looking to establish yourself. Different lenders have different policies on this.
Existing debt or credit complexity: Maybe you’ve got residential investment properties, business debt, or past credit issues. A Mortgage Adviser knows how to navigate these conversations and which lenders take a more holistic view.
Thinking about taking the leap into commercial property?
Let’s have a chat about what you’re trying to achieve and how to make it happen. Commercial property can be an outstanding investment or business decision. The returns are compelling, the asset is tangible, and the benefits are real.
But the lending landscape is complex, individualised, and constantly shifting. What worked for your neighbour might not work for you. What was possible six months ago might not be possible now. Just like opportunities might exist now that didn’t exist before.
Going directly to your bank isn’t wrong, but it’s like playing poker with only one card visible. You might get lucky, but you’re making decisions without full information.
A Cole Murray Mortgage Adviser looks at the big picture.
They show you all your options, help you understand the trade-offs, and work to get you the best possible terms. They save you time, reduce your stress, and often get you better outcomes than you’d achieve on your own.
