Commercial Property

Common terms used in commercial property investment

Gearing – a measure of how much an investment is funded using debt versus the equity provided by investors. Also known as Leverage or LVR.

IM (or Information Memorandum) – an offer document produced for the sale of a product or asset to wholesale investors.

Leverage – the ratio of a company’s loan capital (debt) to the value of its equity. Also known as Gearing or LVR.

Liquidity – refers to how easy it is to convert assets into cash.

Listed property trust/fund – a unitised portfolio of property assets, listed on the New Zealand Stock Exchange (NZX). 

LVR (or Loan to Value ratio) – the amount borrowed to purchase an asset (e.g., building/property), represented as a percentage of the value of the asset. Also known as Gearing or Leverage.

PDS (or Product Disclosure Statement) – a legal offer document for a financial product.

Property syndicates – property syndicates are a pooled property investment usually facilitated by a fund manager. Many investors are able to pool their money to buy a property that alone they would not have the funds to purchase.

REIT (or Real Estate Investment Trust) – pools the resources of investors together to buy a range of property assets, which the trust then manages for a profit. They are listed and can be exchanged on local Securities Exchanges. Also known as a listed property trust/fund.

Unlisted property fund – a form of property investment that provides investors the opportunity to gain access to commercial property assets through an investment in a fund.

WALE, or Weighted Average Lease Expiry – is the way to measure the average time period that all leases in a commercial property will expire.

Yield – a measure of returns to investors that is expressed as a percentage over a set period of time

Types of Commercial Real Estate

Commercial property can be categorised broadly into four broad groups.

Why should I make a commercial property investment?

What can commercial property bring to your investment portfolio?

What makes a good commercial property investment?

Some factors to consider when investing in listed and unlisted property funds.

How to get started in Commercial Real Estate investment?

There are a few different ways to make a commercial property investment.

Commercial Property Investment for Beginners

Understand the commercial property market so you can make more informed investment decisions.

The Pros and Cons of Commercial Property Investment

You should weigh these up before making any commercial property investment decisions.

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