Industrial Property Loans

An industrial property loan covers a wide range of property: factories, manufacturing facilities, light industrial sheds, fabrication workshops, food processing plants, manufacturing-and-distribution hybrids, strata industrial units, and multi-tenant industrial estates. I write finance across all of these sub-types, and each one has different lender appetite.

In practice, light industrial properties (assembly, packaging, light manufacturing, distribution) sit at the top of the LVR ladder with the full mainstream lender pool competing. By contrast, heavy industrial (chemical processing, foundries, paint shops, specialised manufacturing) drops to specialist lenders at lower LVRs and premium pricing.

For storage and logistics specifically, our warehouse property loans page covers that category in detail. The commercial property loans hub covers the full category spectrum.

Yes, but the structure changes. Vacant industrial properties don't generate the income stream lenders prefer to underwrite against, so the application leans on alternative evidence. The three approaches I see most often:

• A forward-leasing strategy with credible tenant interest documented.
• An owner-occupier business case where the buyer is moving their own operations into the property.
• A stronger borrower position (lower LVR, larger deposit, proven property portfolio) to offset the lack of in-place income.

Major banks have limited appetite for vacant industrial without one of those structures. Non-bank specialist lenders and private capital are more flexible but price for the additional risk. If you're considering a vacant purchase, book a free consultation to talk through the deal.

Not necessarily, but the application looks different. Established businesses with two to three years of trading history get the strongest treatment because lenders can assess serviceability against actual cashflow.

First-time owner-occupier buyers typically face slightly tighter LVRs and need to provide a defensible business plan with forward forecasts. If your business is still in start-up phase, the application becomes a hybrid: part property finance, part business case. Several lenders I work with write these deals when the business plan stacks up and the property is well-located.

Whether you're buying as an owner-occupier running your business from the property, or as an investor leasing to a tenant, the lender pool and treatment shifts. If you're weighing whether to buy your premises or continue leasing, our buy vs rent calculator compares the long-term economics.

Industrial LVRs typically sit at 60% - 80%, depending on deal type and your borrower position. Within that range, lender appetite varies significantly by property sub-type:

• Factory or standalone industrial (owner-occupier): up to 80%
• Factory or standalone industrial (investor): up to 75%
• Light industrial sheds: up to 75%
• Industrial estates (multi-tenant): 70-80% depending on tenant covenants
• Strata industrial units: 70%
• Heavy industrial or specialised: 60-70% with specialist lenders
• Vacant industrial: 50-65% with non-bank or private lenders

Owner-occupiers consistently access 5-10 percentage points higher LVR than investors on equivalent properties. The factors I see moving LVR up or down most often are tenant covenant strength (for investors), operational fit (for owner-occupiers), and environmental compliance.

Use our commercial property repayment calculator to estimate your indicative loan position, and our commercial property loan interest rates page covers current pricing across categories.

Yes, but it's almost always structured as separate finance. Industrial property loans cover the building and the land. Plant, machinery, racking, conveyors, and operational equipment sit under equipment finance, with different terms, security and lender appetite.

The reason I structure these separately: commercial property loans price at lower rates because the security is real property. Equipment depreciates faster than property, so folding equipment value into the property LVR calculation inflates the effective LVR against a depreciating security pool. Lenders either strip out the equipment value or lift the blended rate across the whole facility.

For broader business cashflow needs around the property purchase, our business loans range covers complementary structures: equipment finance for plant and machinery, working capital loans for operational ramp-up after settlement, and invoice finance for receivables-backed cashflow.

Yes. Major banks typically cap interest-only at three years, non-bank specialist lenders extend to five years, and private capital can sometimes structure full-term interest-only. The buyers I see structure this way are usually protecting cashflow during the early ownership period, especially when fit-out, business ramp-up, or a vacancy gap between settlement and tenant moving in is planned.

The trade-off is higher overall interest cost across the loan term. Our commercial property loan types page covers different structures available across the product range.

This is one of the most important distinctions in industrial finance, and it's operational, not just physical. The classification drives both the LVR cap and which lenders will even consider the deal.

• Light industrial covers assembly, packaging, light manufacturing, distribution, and storage. These sit in the mainstream lender pool at 75-80% LVR.
• Heavy industrial covers chemical processing, foundries, smelters, paint shops, and any operation with significant environmental or operational risk. These drop to 60-70% LVR with a narrower specialist lender pool and premium pricing.

The point that catches buyers out: a standard-looking industrial shed used for solvent storage classifies as heavy industrial regardless of size or appearance. The 10-15 percentage point LVR gap between classifications is structural and not negotiable through mainstream channels.

For broader market context across industrial corridors and lending conditions, our commercial property market insights cover the wider category.

For industrial property purchases, Phase 1 ESA is fast becoming a non-negotiable part of due diligence. It's a desktop historical review of any prior industrial uses on the site that could have left contamination. The timeframe is 2-3 weeks at a cost of $3,000-$5,000.

Why it matters before contracts exchange: a clean Phase 1 unlocks the full mainstream lender pool at standard pricing. A flagged Phase 1 triggers Phase 2 ESA, which is soil and groundwater testing taking 6-12 weeks and costing $15,000-$50,000 or more. Most contracts won't accommodate that timeline after they've been signed.

I see this go wrong when buyers commission Phase 1 during the finance approval window instead of before exchange. The settlement date arrives before Phase 2 ESA can complete, and the deal either extends, the deposit comes under risk, or the seller walks. The National Environment Protection (Assessment of Site Contamination) Measure is Australia's national guidance document on site contamination, worth reviewing before any industrial site purchase.

Realistic timeframes vary by lender:

• Major banks: 6 to 10 weeks
• Non-bank specialist lenders: 4 to 6 weeks
• Private capital: 1 to 3 weeks

The biggest accelerators are clean documentation, a complete Phase 1 ESA ready at submission, and an existing relationship with one or more lenders I already know are writing your deal type.

The biggest delays come from environmental flagging triggering Phase 2 ESA, body corporate documentation gaps on strata industrial purchases, valuation lead times for specialised facilities, and operational use classifications that aren't clearly described in the application. The detailed step-by-step is in the how to apply section above.

An industrial property loan application typically requires two sets of documents.

On the property side, I'll need:

• The sale contract
• The lease agreement and tenant covenant details (for investor purchases)
• Strata or body corporate documentation (for strata industrial units)
• A Phase 1 environmental site assessment
• A recent specialist property valuation
• Floor plans showing operational layout and physical specifications (three-phase power, floor load rating, clear span height)

On the borrower side, lenders want to see:

• A personal financial statement
• Two years of personal tax returns
• Existing entity financials and 2+ years of BAS statements (for owner-occupier deals)
• A forward business plan with cashflow forecasts (for owner-occupier) or a property portfolio summary (for investor)
• Identification and ASIC company extracts where companies are involved

The exact list varies by deal type, lender, and complexity. I provide a tailored documentation checklist once we've had an initial conversation about your specific scenario. Book a free consultation to get started.