Moving into industrial property is not merely a change in asset type; it is a change in investment methodology. For those used to the residential “set and forget” approach, the commercial journey requires a more active, strategic mindset.
Step 1: Capital Allocation and Gearing
The entry point for industrial property is typically higher than residential. While a suburban house might require a 20% deposit, industrial lenders in 2026 often look for 30% to 40% equity. This is because commercial lending is assessed not just on your personal income, but on the “covenant strength” of the tenant and the quality of the lease. Your first step is to consolidate your equity—often by refinancing residential holdings to fund a more robust industrial deposit.
Step 2: Defining the Asset Grade
Are you looking for a small strata warehouse in a premium infill location or a larger, standalone facility?
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Small-Scale Industrial: Typically $800k to $2M. High demand from “last-mile” delivery services and local trades.
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Medium-Scale/Manufacturing: $3M+. Often involves more complex power requirements and longer-term, specialised tenants.
Step 3: Technical Due Diligence
Industrial due diligence goes far deeper than a standard building report. You must investigate:
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Zoning & Permitted Use: Ensure the tenant’s business complies with local council zoning (e.g., Industrial 1 vs. Industrial 3). A mismatch here can render a lease invalid.
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Structural Specs: Does the building have 3-phase power? Are the internal clearances (the “stud height”) sufficient for modern racking? Is there adequate container access and truck turning circles?
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Environmental Audits: Especially in historical Melbourne industrial hubs, checking for soil or groundwater contamination is vital to protecting your future capital value.
Step 4: The Commercial Team
Transitioning investors need to move away from generalist agents and conveyancers. A successful industrial acquisition requires a Commercial Solicitor to review lease terms, a Commercial Finance Broker to navigate business lending, and a Specialist Strategist to identify precincts with high future demand.
Disclaimer
This content is provided for general information only and does not constitute financial, legal, or investment advice. Industrial property involves different risk, lending, and compliance considerations than residential assets. Investors should seek independent, specialist advice tailored to their circumstances before making any decisions.
Plan your transition to industrial property with intent, not assumption
Moving from houses to warehouses requires a shift in capital structure, due diligence depth, and advisory support. A methodical approach can help investors avoid common missteps and build exposure aligned with long-term income and growth objectives.