With Ham Kerr Commercial you can be assured your Commercial Portfolio is being managed by an experienced team who possess the skills and understanding required of commercial real estate. It is our priority to ensure you receive the maximum return possible from your commercial investment. Our highly capable staff can provide you with sound advice to assist you in making informed decisions when assessing the performance of your portfolio.
We pride ourselves on our attention to detail and knowledge of commercial management.
Our team of highly qualified staff are on hand to walk you through the process of selling and leasing your Commercial Investment Property.
We can assist you with all your commercial Real Estate needs including:
- Offices, retail and industrial property
- Sales – auction, private sales
- Leasing
- Property Management
Should you be interested in our commercial property service, please contact our Commercial Department on 03 9830 0990 to arrange a meeting or submit the Appraisal form.
Difference between Commercial and Residential property
commercial properties are used primarily for business purposes and residential properties are used as homes. Consequently, commercial properties are more vulnerable to economic shocks than residential properties and are, therefore, considered higher-risk investments. The upside, however, is that they also offer greater returns.
Lease Length
Typically categorised as either office, retail or industrial, commercial properties have much longer leases than residential properties, and these leases play a crucial role in determining their value. This is because it’s much harder to replace a commercial tenant than a residential one, as commercial properties are more vulnerable to economic shocks than residential properties.
Vacancy periods
The vacancy periods in the commercial market tend to be much longer than vacancy periods in the residential market. This means that commercial investors will often have to cover a property’s outgoings without the support of rental income
Lease terms
While there’s little variation between residential leases, the difference between commercial leases can be huge, with pretty much every term up for negotiation. Consequently, commercial investors have to work very closely with lawyers and financial advisors when drawing up a lease.
Rental yields
Commercial properties typically offer rental yields between 5% and 12%, whereas residential properties typically offer around 3-4% yields. As a result, commercial investments are more likely to be cash-flow positive than their residential counterparts.
Maintenance and repairs
Commercial tenants are responsible for paying council rates, insurance, land tax, maintenance and repairs. Meanwhile, in the residential market, these expenses are billed to the rental provider, which is yet another reason why it’s more common for commercial properties to deliver a positive cash flow. Commercial investors, however, are required to weigh up this benefit against the higher cost of repairs more broadly. Combined with the increased potential for extended vacancy periods, the higher cost of upgrading a commercial property means that commercial investors generally need to have access to more readily available capital.
Tenant behavior
Commercial tenants use their rented premises to run a business means they have a stronger incentive to take care of the property.