Residential | Commercial
Commercial property transactions are becoming increasingly complex, with legislative changes and more sophisticated developments requiring expert legal advice.
Turner Hopkins provides high-quality advice to property owners, developers and tenants in a broad range of commercial projects. Turner Hopkins' strong reputation is built on our technical expertise and our common sense and pragmatic approach to getting the deal done.
Why Choose Turner Hopkins
- We have a proven track record of commercial property experience.
- Our experience enables us to identify potential pitfalls and risks relating to the transaction in question and ensure these are mitigated or eliminated.
- We operate a continuing legal education programme to ensure TH personnel are kept up to date with the latest legal developments.
- We pride ourselves on developing an excellent level of communication with our clients to ensure we fully understand what they are seeking to achieve.
The Areas We Cover
Generally, clients approaching us for commercial property advice fall into one of the following categories:
If you are looking to buy a commercial property, we will guide you through the process to ensure you fully understand the following:
- Your obligations under the agreement for sale and purchase;
- Your responsibilities under your funding arrangement e.g. guarantees;
- Your obligations as a owner occupier;
- What other professionals you will require e.g. Valuers, engineers;
- Your continuing compliance obligations as a property owner.
If you are looking to enter into a lease of commercial premises, we will assist you in:
- Negotiating the terms of the lease to ensure it reflects your particular needs;
- Understanding your obligations under the lease;
- Strategising negotiations with the landlord including rent reviews and lease variations.
If you are either a Landlord looking to lease a vacant commercial property or negotiate with an existing tenant, we can help you:
- Consider pre-leasing issues e.g. compliance issues which a prospective tenant may require such as fire ratings which allow racking above 3 meters in warehouse areas;
- In reviewing the credit worthiness of a tenant or guarantors;
- Preparing the lease documentation.
If you are considering selling your commercial property, we assist in maximising the return you will receive by:
- Identifying those steps which should be undertaken prior to sale e.g. negotiating lease renewals and rent reviews;
- Preparing due diligence packages for prospective purchasers;
- Reviewing contractual documentation e.g. tender documents;
- Negotiating preferred terms with marketing and real estate agents.
If I wanted to buy a commercial property where would I start?
By working out a budget of what you can afford. There are a vast range of investment options from modest shares in property syndicates to large stand alone buildings worth over $10 million.
What is the return I will receive if I own a commercial property?
The return is calculated as a percentage of the value of your investment and will depend on the term of the lease, the financial strength of the tenant and the position of the building. Top quality investments will return approximately between 5-6% and those of a lesser quality between 8.5-10% per annum.
How much will the bank lend me against the security of a commercial property?
Generally a trading bank will lend to a maximum of 60-65% of the property's value and will require in addition to interest for the principal to be paid off over a relatively short period of time e.g. 6 years. Many clients initially enter the commercial property market by using their home as collateral security which will enable them to borrow a greater proportion of the property's value.
What is the difference between a Commercial Lease and an Agreement to Lease?
An Agreement to Lease normally is a preliminary document, which is prepared by a commercial real estate agent and contains the basic information agreed on by the Landlord and Tenant, e.g. term of lease, rental and brief description of premises.
The formal Deed of Lease is normally prepared in accordance with the terms and conditions of the Agreement to Lease and may relate to various commercial premises such as retail premises, industrial premises, and the like as opposed to residential tenancies of a dwelling house.
Why is it important to accurately define the premises in the lease document?
It is essential to define the premises accurately in the lease document including:
- Its physical configuration;
- Its exact size in square metres and the method of measurement used to define the premises, e.g. is it to the inside or exterior walls? This can have a significant effect on the rental charged;
- What carparks are available for use by the Tenant and what is the value on an annual basis attaching to these carparks.
- The condition of the premises at the lease commencement date.
If I want to lease the commercial property how long does the term of the lease need to be?
This is an issue which is subject to negotiation with the general rule a tenant will want flexibility by having an initial term with rights of renewal to enable them to depart the premises if their needs change.