Why WA is a hotspot for commercial property trusts | Australian Markets

If you’re enthusiastic about buying a commercial property however discover the obligations and dangers of direct property possession daunting, a property trust construction might offer a higher various.

We spoke to Sullivan Property director Brian Sullivan about how these trusts allow a number of traders to pool their funds, to invest in high-quality commercial property, with the added benefit of skilled management.

“The property trust structure effectively allows multiple investors to pool their funds to invest in commercial property. We then manage the trust for the investors including the purchase of the property, ongoing management, maintenance and eventual sale of the property,” Mr Sullivan defined.

He famous that trusts not solely offer skilled oversight, but in addition present entry to bigger and sometimes higher-quality belongings than particular person traders may be capable to buy on their own.

“A trust structure can deliver diversified exposure, income stability through lease agreements with commercial tenants, and risk management—all under the guidance of experienced professionals,” Mr Sullivan stated.

Why Western Australia?

“Western Australia, and Perth in particular, is experiencing strong economic momentum driven by the resources sector, infrastructure investment and population growth,” Mr Sullivan defined.

“These factors are creating demand across several commercial sectors, including a notable upswing [in] childcare facilities.”

Why are childcare property investments enticing?

Sullivan stated the childcare sector is promising as a result of it’s pushed by each social trends and authorities help.

“Demand is being driven by young families moving into new suburbs, increasing participation in the workforce, and federal government support,” he stated.

“High-quality centres in strong suburban locations are typically backed by long-term leases and stable income, making them a particularly attractive asset for investors seeking reliable returns.”

And whereas market fluctuations are inevitable, he stated a well-managed trust can help cushion the affect and handle the risk by way of diversification.

“Property trusts help investors spread risk across different assets and sectors,” Mr Sullivan famous.

“Instead of concentrating funds in a single property, or single trust, investors can participate in a number of trusts spreading their risk across multiple professionally managed commercial properties and trusts.”

Simply put, it’s like not placing all of your eggs in a single basket. And, importantly, investor legal responsibility is restricted.

“The investor’s risk is quarantined to the amount they invest in the specific trust. The borrowings of the trust are non-recourse and secured against the property only,” Sullivan stated.

“Even in a worst-case scenario where the property is sold below its loan value, investors are not personally liable for any shortfall beyond what they invested.”

So, what do you have to look for in a reliable operator?

Like any relationship, traders ought to contemplate the observe file and alignment of the supervisor.

“Transparency, performance history, and clear communication are essential,” Mr Sullivan stated.

“But just as important is the manager’s willingness to invest alongside their clients. At Sullivan Property, we co-invest in every project, ensuring that we are genuinely committed to the long-term success of each investment.”

With the suitable operator and the suitable asset, a property trust can offer a good entry level into the commercial market. Sullivan Property invest alongside their traders in every project. This shared dedication ensures that their focus is not solely on choosing strong-performing belongings but in addition on actively managing them to ship long-term worth. For more data, go to the web site.