Financing Specialised Assets

Posted Tuesday, November 17, 2015 Comments (0)

What is a specialised asset? 

Specialised assets are purpose built properties that often have specific zoning. Examples include bed & breakfast lodges, child care centres and petrol stations to name a few. Specialised properties usually have a free hold value (the physical asset) and a leasehold value (value of the business). As such, they often require a more detailed financial analysis and are considered a higher risk to the lender.

What are the finance considerations? 

Post GFC, lenders in a lot of instances were restricting leverage on specialised assets. Today this has changed as the banking industry chases market share to win over clients with good performing property assets. Policies vary greatly between lenders and a detailed valuation and sound understanding of the property is required when applying for finance. 

Example – Service Stations 

As property investors look for yield, service stations with long term leases to big name tenants are obviously attractive. Yields range from 5.50% to 7.00% p.a. and lenders are becoming increasingly aware of this, exemplified by Balmain successfully tendering a portfolio of service stations at 73% lending ratio at a sharp interest rate this year. 

At Balmain, we understand each lender’s risk appetite and cost structure for different specialised assets. Contact us to see how we can assist you with your investment portfolio.

David Jones is a Director at Balmain Brisbane, specialising in sourcing commercial investment, construction and residential finance for property investors, developers and owners in South East Queensland. 


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