Australia has the tightest industrial and logistics property market in the world after vacancy rates fell to just 0.6% in the second half of 2022, according to CBRE figures.

It’s set to stay that way too, given that a supply crunch means vacancies are likely to remain tight even if demand weakens.

With that in mind, you might be thinking of buying a commercial property this year. But what are some of the things you should consider as part of your due diligence?

  1. Existing property leases 

Buyers are bound by any existing leases entered into by a seller and tenant. So if there are any existing tenants, conduct a thorough review of all leases to see how much time is left on their terms and what they are.

  1. Zoning/planning restrictions 

Make sure your plans for the property are compatible with local planning laws and zoning regulations.

  1. Title and company search 

The title needs to be checked to make sure there are no encumbrances on the property and that it is registered in the correct name. If the seller is a company, check whether there are any charges over its assets, or if a receiver or liquidator has been appointed.

  1. Insurance 

Before buying a commercial property, make sure it’s adequately insured for buildings, public liability and contents cover.

  1. Contract of sale 

Make sure you thoroughly review the contract of sale with your legal representative before you sign, because, generally, cooling-off periods do not apply when buying commercial property.

Freya Southwell is a property lawyer and principal of Sutton Laurence King Lawyers.

Need expert advice on property law in Victoria? Contact Sutton Laurence King Lawyers today on 03 9070 9810 or  for help.