Commercial Property Managers generally calculate management fees based on a percentage of the property’s annual rent. The range can be between 3% and 7%, but be careful because many property management contracts also have minimum or hidden fees and exclusions. Often, the tenant is responsible for paying the management fee through their outgoings charge.

To estimate a what your commercial property would cost to manage, check out our fee estimator tool.

Commercial property rates of return depend on a lot of factors. There are two types of return on commercial property investment, the rental return and the growth in the value of the property. The property value will depend on your leases, rental, rent reviews, location, inflation, the economy and many other factors. Good investments will return around 5-6%.

The short answer to this is yes, however there are circumstances where capital gains tax does not currently apply to commercial property in NZ. If you are not a property developer and you have kept the commercial property for more than 10 years, you should be exempt from Capital Gains Tax. Your accountant will be able to advise you on your specific circumstances.

All commercial properties can give good returns but there are some factors that can strengthen your portfolio. Multi tenanted properties spread the investment risk, location is important for attracting the right tenants, industrial can be very low maintenance with strong returns and properties with future development potential are great if you have a long term or multi-generational plan. Owning different types of assets in different suburbs is often the best investment strategy.

When a business occupies a premises they enter into a lease with the landlord. This outlines the obligations of both parties and is legally binding. The NZ standard lease form is the ADLS lease, which you can learn more about in my article on understanding commercial leases. You should always get legal advice before entering into any lease.

Commercial tenants have many rights and these are detailed in your lease. There is the right of quiet enjoyment, exclusive possession, benefits of the landlords building insurance, and other rights that will be specific to your lease. If you have any questions about your rights as a commercial tenant, please contact us. Our initial consultation is free.