Buying commercial property in Perth is one of the most significant financial decisions an investor can make. Unlike residential property, commercial acquisitions involve a complex interplay of factors: lease structures, tenant covenants, yield analysis, and property-specific costs that can dramatically affect your return.
Perth’s south-east corridor – spanning suburbs like Belmont, Welshpool, Kewdale, and Cannington – has consistently attracted commercial investors due to its established industrial and office precincts, strong infrastructure links, and relative affordability compared to major capital city CBD markets. But even in a well-performing market, getting the fundamentals right is critical.
Whether you’re a first-time commercial investor or adding to an established portfolio, these five key considerations will help you enter negotiations with confidence and secure a more favourable outcome.
Before searching for a property, define your investment objective clearly.
Commercial property delivers returns in two primary ways:
Some assets offer significant depreciation benefits, allowing owners to offset taxable income – particularly relevant for warehouse and industrial properties, where plant, equipment, and fit-out can carry substantial depreciation value. Others are purchased primarily for cash returns, with yield being the dominant metric.
Your objective shapes everything: the asset type you target (office, retail, industrial), the location you prioritise, the lease terms you require, and ultimately the price you’re prepared to pay.
Once your objective is clear, browse our current commercial listings to see what’s available across office, industrial, and retail in Perth’s south-east.
The best type depends on your goals. Industrial and warehouse properties in Perth’s south-east corridor tend to offer strong yields and depreciation benefits, while well-located office properties can provide stable, long-term tenancies. Define your investment objective – income yield or capital growth – before beginning your search.
When evaluating a commercial property, independent research into historical performance is essential – yet frequently underestimated by first-time buyers.
Investigate:
While past performance is not always indicative of the future, it gives a strong indication of an area’s resilience and the quality of a particular asset type. Properties in established south-east Perth precincts such as Welshpool and Kewdale have demonstrated consistent demand from logistics, trades, and light manufacturing tenants over many years – making historical data particularly instructive in these markets.
For a broader view of how the market has been tracking, our Perth Commercial Property Outlook covers key trends across the south-east corridor.
Review the property’s historical yield, recent comparable sales, vacancy history, and current market rents for similar assets in the same suburb or precinct. Engaging a local commercial real estate specialist familiar with the south-east Perth market will provide the most reliable assessment.
For any tenanted commercial property, the lease structure and the tenant’s financial health are arguably the most important factors in determining fair value.
Key questions to ask:
Outstanding arrears or unresolved obligations must be factored into, or deducted from, the purchase price. A short lease with an uncertain tenant represents a risk that should be reflected in what you’re prepared to pay. For a first-time commercial buyer, these elements can appear overwhelming; for an experienced investor, they become negotiating leverage.
For a deeper understanding of how commercial leases are structured, our commercial leasing guide covers the key terms in plain language.
Before purchasing a tenanted commercial property, check the remaining lease term, options to renew, rent review mechanisms, whether the tenant is in arrears, and the financial strength of the tenant’s business. Outstanding debts or near-term expiry risk should be reflected in a reduced purchase price.
For guidance on gathering and interpreting comparable evidence, see our article on evaluating commercial properties for sale.
A rent that sits significantly above or below market value creates complications – and both scenarios need to be priced accordingly.
Below-market rent typically means a lower current yield, but may indicate upside potential at the next rent review. This should be factored into your purchase price expectations and negotiation.
Above-market rent is more nuanced. In some cases, a tenant pays a higher rent to repay a fit-out funded by the landlord – known as a special rent. This arrangement can appear attractive on paper but carries real risk: if the tenant vacates, incoming tenants will only pay market rent. You may also inherit a fit-out liability that offers little residual value to a new occupant.
Always compare the current passing rent against independently sourced market data for comparable properties in the same suburb. For the south-east Perth market, consider factors such as zoning, site area, warehouse clearance height, and office-to-warehouse ratios – all of which influence achievable rents.
Commercial property yields in Perth vary by asset class and location. Industrial and warehouse properties in Perth’s south-east suburbs such as Welshpool and Kewdale have generally been transacting at yields in the 5-7% range, depending on lease term and tenant quality. Always compare the passing yield against current market evidence rather than vendor projections.
Thorough commercial property due diligence must include a clear-eyed assessment of costs that aren’t always visible in the listing price or vendor-provided documents.
Consider:
Where any of these risks are identified, they should either be resolved by the vendor prior to settlement or factored into a reduced purchase price.
If you’re purchasing as an investment, understanding what ongoing commercial property management involves is worth factoring into your decision before you commit.
Commercial property due diligence in Perth should include a building and pest inspection, review of all leasing documentation, assessment of plant and equipment condition, environmental checks (particularly for industrial sites), verification of council compliance, and a review of outgoings obligations. Engaging a commercial solicitor and a specialist commercial real estate agent is strongly recommended.
This article focuses on the investment and financial considerations. For a full physical due diligence checklist, see our guide to 11 factors to consider when buying commercial property.
Is buying commercial property a good investment in Perth?
Commercial property can be an excellent investment in Perth, particularly in the south-east corridor where industrial vacancy rates have remained tight and demand from logistics and trades tenants has been consistent. The key is matching the right asset type to your investment objectives and conducting thorough due diligence before committing.
What deposit do you need to buy commercial property in Australia?
Lenders typically require a larger deposit for commercial property than residential – generally between 25% and 40% of the purchase price. Loan-to-value ratios vary based on property type, tenancy, and individual lender appetite. A commercial finance broker can advise on current lending conditions.
Do you pay GST when buying commercial property in Perth?
GST obligations on commercial property purchase depend on the transaction’s circumstances. If you purchase a property as a going concern – with an existing tenancy in place – GST may not apply. This is a complex area and specialist tax advice should always be sought prior to exchange.
How long does commercial property settlement take in WA?
Settlement periods for commercial property in Western Australia are negotiated between parties, but commonly range from 30 to 90 days depending on due diligence requirements, finance conditions, and any vendor obligations to be fulfilled prior to settlement.
Ross Scarfone Real Estate has specialised in commercial and industrial property across Perth’s south-east corridor for over 35 years. Whether you’re purchasing your first commercial investment or growing an established portfolio, our team can help you identify the right asset and negotiate the right terms.
View current commercial properties for sale or contact our team to discuss your needs.
Which property type should you invest in for 2025? View our past and present analysis of the office, retail and industrial property sectors paired with insight from expert 2025 predictions.
To help you make an informed decision about the rent review terms in your commercial lease, we’ve broken down the process and how it could impact you.
Ready to invest in a commercial property? Before you do, read our 8-page guide to learn more about commercial property investments.
