Industrial property loans for warehouses, factories and yards

What counts as industrial property?

Industrial property covers buildings and land used for making, storing, moving or servicing goods. That includes warehouses, factories, workshops, trade units, cold storage, truck depots, distribution centres and open yards. Some are stand-alone buildings and some are units in strata or multi-tenant complexes.

For lenders, industrial property has a reputation for steady demand in well-located precincts, but it is also sensitive to location and building specifics. A modern warehouse near a major road is a different proposition from an ageing factory on a dead-end street.

Who needs industrial property finance?

• Trade and manufacturing businesses buying their workshop or factory.
• Logistics and transport operators securing depots and yards.
• Investors buying industrial units leased to tenants.
• Developers building or subdividing industrial estates.
• Owners refinancing an industrial property after a lender change.

What do lenders look at?

Factor	Why it matters
Location and precinct	Industrial areas with strong demand support resale and re-letting
Access and clearance	Truck access, loading, height and power affect usability
Zoning	Permitted uses, buffer zones and any restrictions
Building condition	Age, repairs, compliance and fit-out
Occupancy	Tenant strength and lease terms, or trading income if owner-occupied
Environmental history	Past uses that might raise contamination questions

Lenders also think about alternative use. If your business closed, could another operator use the building? Flexible buildings are easier to fund than highly customised ones.

How is owner-occupier different from investor industrial lending?

For owner-occupiers, the business’s trading income is part of the story, so the lender wants to see how the business performs. For investors, tenant quality and lease terms take the lead. Many industrial purchases mix the two, such as a business that occupies one unit and leases another. Our owner-occupier commercial loans and commercial investment property loans pages explain each approach.

How does Ownright approach industrial finance?

We begin by understanding exactly what the property is and how it is used, because industrial labels cover a lot of ground. Trevor Scott’s four decades in finance have taught us that the right lender for a clean modern warehouse is rarely the right lender for a workshop on a short lease or a yard with a single shed. We match accordingly.

If there are complications, such as an older building, a tenant with a short lease or a business with patchy records, we look for lenders who weigh the asset and the overall story rather than ticking boxes. We also help with presentation: photos, zoning information and a clear explanation of the business all make a difference. To get started, tell us about the property.

What about building and equipment on the site?

Some industrial purchases include plant, machinery or fit-out that is critical to the business. Lenders may treat these separately from the building itself, and equipment finance can sit alongside the property loan. Our equipment finance page covers that side. Planning both together prevents gaps at settlement.

An illustrative example

Illustrative only, no real client. A transport operator has leased a depot for years and the landlord decides to sell. The operator wants to buy but has been told by their bank that depot properties are outside policy. We would look for lenders who fund industrial yards and depots, present the operator’s contracts and trading history, and consider an interim loan if the contract timeline is tight. Success depends on the lender, the security and the paperwork.

How do GST and duty affect an industrial purchase?

Commercial property purchases carry tax questions that residential buyers rarely face. The Australian Taxation Office explains that the sale of commercial premises is generally subject to GST, with exceptions such as the sale of a going concern, where a business and its premises are transferred together. Whether GST applies, and how it is handled at settlement, can change the cash you need on the day. Each state and territory revenue office also sets its own duty rules for commercial transfers.

We are not tax advisers, so we encourage buyers to speak to their accountant before signing a contract. What we can do is make sure the finance is ready for the cash flow, including any timing difference between paying GST at settlement and recovering it afterwards.

What does the lease look like?

For an investor, the lease is the main driver of value and finance. For an owner-occupier buying from a landlord, an existing lease may transfer or end at settlement. Lenders look at:

• The tenant and how long they have been there
• The remaining term and any options to renew
• Who pays outgoings, repairs and insurance
• Rent review mechanisms
• Any make-good obligations at the end of the lease

A long lease to a solid tenant is easy to finance. A short lease, or a vacant building, can still be funded, but the lender may focus more on the property’s re-letting prospects and your ability to carry the loan in the meantime.

What about sale and leaseback?

A business that owns its workshop or depot sometimes sells it to an investor and leases it back, or borrows against it, to release capital. Depending on the lender and the numbers, this can be a way to fund growth or clear debt without giving up the premises. It does change the business’s costs and its balance sheet, so it deserves careful thought with your accountant. See commercial loan refinance for how refinancing an existing industrial property works.

Can an SMSF buy industrial property?

Some self-managed super funds buy industrial or commercial property, often leasing it to a related business. Specific rules apply to the fund, and the finance has to be structured within them. Not all lenders offer it, and those that do have their own policies. Our page on SMSF commercial property loans explains the area, and your fund’s adviser should confirm the position.

Short-term options for industrial deals

Industrial properties sometimes sell quickly or at auction, and finance is needed within a short window. If the timeline is tight, a short-term commercial facility can bridge to a longer-term loan. Our page on commercial bridging loans explains how those work, and what the exit needs to look like. Lenders in this space focus on the property and the exit, so a clear plan helps.

Comparing industrial with other commercial property

Industrial buildings often have lower fit-out costs and simpler lease structures than retail or office, but they depend on location and use. A lender comfortable with industrial may be wary of retail, and the reverse is true. Our commercial property loan page gives the wider picture, and commercial LVR and valuation explained shows how lenders measure value.

Mistakes to avoid

• Assuming every lender treats industrial property the same.
• Skipping the zoning and permitted-use check before contracting.
• Ignoring the cost of repairs identified by the valuer.
• Overlooking environmental history on older sites.
• Underestimating how long strata or title queries can take.

Documents to have ready

• Contract of sale and title details
• Zoning certificate or planning information
• Lease agreements, if tenanted
• Financials and tax returns for the occupying business
• Building reports or inspections, where available
• Entity documents

What makes an industrial property easier or harder to finance?

Several features tend to help: a location in an established industrial precinct, good truck access, flexible clear-span space, current compliance and a recognisable tenant or a stable owner-operator. On the other side, remote sites, highly customised buildings, ageing structures and sites with unresolved environmental questions are harder. None of these automatically rules out a loan. They simply narrow the lender field, which is why knowing the field matters.

How are yards and land-heavy properties treated?

Some industrial properties are mostly land: truck yards, storage compounds, hardstand areas with a small office or shed. Lenders value these mainly on land and permitted use, and they look closely at zoning, access and the buyer pool. Since improvements add little to the value, the lender’s comfort depends on the land itself and on how readily it could be re-let or sold. Private and specialist lenders are often more comfortable with these assets than mainstream ones.

What about future plans for the site?

If you plan to extend a building, add a hardstand or subdivide, tell your broker early. Some lenders will fund these plans alongside the purchase, while others will treat them as a separate loan. Planning permission, cost estimates and timelines all matter. Our commercial construction loans page covers what lenders expect for works.

What do lenders think about older industrial buildings?

Age alone is not a problem, but condition is. An older building in good repair on a good site can be perfectly acceptable, while a newer one with defects can cause trouble. Valuers look at the roof, floors, services and compliance, and a long list of defects can reduce the value or lead a lender to attach conditions. A building inspection before you commit tells you what to expect, and in some cases gives you leverage in price negotiations.

How do power, access and clearances matter?

Industrial users have specific needs: three-phase power, truck turning space, loading docks, mezzanine capacity and clearance heights. A building that does not meet those needs for typical users is harder to re-let or sell. Lenders may not list these in their policy, but valuers and credit assessors think about them. If the building suits a narrow set of users, say so and explain why that user group is stable.

Can I finance industrial property in a regional town?

Yes, though regional markets have fewer buyers and tenants, so lenders tend to look closely at local demand and the strength of the borrower. Strong local employers, evidence of tenant interest and a realistic valuation all help. We work with lenders who are active outside the capital cities and can tell you which ones are comfortable with your location.

Where next?

If you are buying, refinancing or developing industrial property, talk to us about your situation. You can also read about commercial construction loans if you plan to build.