Commercial Loan for Regional Retail Centre

Red & Co recently settled a commercial loan facility for the purchase of a small shopping strip in Gympie, 2 hours north of Brisbane:

Every bank has different policy. As the broker, it’s our job to know what every bank will and won’t do. For example, some banks will only lend for commercial property in metro locations and won’t go regional. Others have policy around the type of security they will lend against. For example, some banks won’t lend against vacant land and others won’t lend to mechanical workshops. It can be opaque as to why these types of properties are blacklisted, however, a good broker will be able to navigate you through these challenges.

Back to our Gympie case:

  • The client was wanting to expand their real estate portfolio by branching out into commercial property. Consequentially, they required a commercial loan as opposed to a normal residential mortgage to complete the purchase. They client’s request was for maximum leverage (servicing wasn’t an issue) for efficiency and full tax benefits.
  • The lender was a major international bank
  • A high LVR of 70% was achieved despite the security being located in a regional centre
  • Interest only for 3 years was achieved, fixed for 3 years at 4.8%
  • The property had long standing tenants with one national retailer and was purchased on a high yield, making it an attractive piece of security for the bank.

Want to chat to someone about your property portfolio? Red & Co have a dedicated team of commercial and residential finance specialists. We save our clients time and money when it comes to seeking finance for property transactions. Call Greg Turner on 0417 698 345 ([email protected]) for all commercial enquiries or Shoheel Khan for all residential enquiries on 0418 110 870 ([email protected]).