Last month, we looked at how the Budget’s negative gearing and capital gains tax changes could reshape residential investment decisions for self-employed clients.
One flow-on effect is the renewed interest in commercial property. The negative gearing changes are focused on residential property, but the broader tax conversation is still prompting some investors to reassess where commercial property fits in their portfolio.
Commercial property is not one single market. Office, retail, industrial and mixed-use assets each move differently, with their own drivers, risks and momentum. For brokers, the opportunity is not about becoming a commercial lending specialist overnight. It is about recognising when an existing client’s next property conversation may no longer be residential.
In fact, just 37 per cent of brokers wrote a commercial loan in the 12 months to April 2025¹. Meanwhile, brokers are now settling a record 81 per cent of new residential loans.
How to spot a commercial property opportunity
A commercial property opportunity for an existing client often shows up as:
- A residential investor asking about yield and cash flow, not just capital growth
- A self-employed client reassessing their portfolio after the Budget changes
- A business considering whether to buy the premises it currently rents
- A client looking at an asset class where lease income, tenant quality and asset type can shape the conversation
That last point is the real shift. With residential property, the conversation often starts with the borrower’s income, expenses and borrowing capacity. With commercial property, the property itself can carry more of the conversation. The asset type, location, tenant profile, lease terms and income the property can generate all become part of the picture.
That does not mean the client needs a complicated funding path from day one. It simply means brokers need to recognise when the opportunity has moved beyond residential property, and when it is worth bringing the right lender into the conversation.
A sector full of options
Ben Burston, Knight Frank’s Chief Economist, notes the commercial market’s 2026 recovery is expected to widen, with “conditions improving across more locations and asset types.”³ Knight Frank’s Australian Horizon 2026 report says the recovery in Australia’s commercial property market has begun and is expected to broaden in 2026.
For investor clients, that means commercial property is not just one conversation. Office, retail, industrial and mixed-use assets all come with different considerations.
Knight Frank’s Australian Horizon 2026 report predicts that the retail sector will continue to perform, with certain assets particularly well placed. It highlights that “dominant shopping centres are best placed to take advantage due to their lack of immediate competition.”³
The industrial sector is also emerging as one to watch. While office vacancy sits at 14.8 per cent nationally, the highest in over 30 years², industrial vacancy is just 3.2 per cent⁴. Every $1 billion increase in online retail sales creates demand for an extra 300,000 to 350,000 square metres of industrial space, according to Colliers research⁴, and that pipeline shows no sign of slowing.
Where Prime Capital fits
When a client is circling a commercial property opportunity, Prime Capital has products that may help brokers move quickly.
For bigger, asset-rich scenarios, Business Jumbo lends from $5M to $25M, secured by residential or commercial property.
As with every Prime Capital scenario, the borrower needs to be an eligible business, as Prime Capital lends to ASIC-registered companies, not individuals.
Got a client looking at a commercial property opportunity? Submit their scenario via Prime Approve and your BDM will help you structure it.
Sources
- Agile Market Intelligence, “Commercial and business lending gains ground in broker portfolios”, August 2025
- Australian Broker, “Budget shake-up gives commercial property a new edge over residential”, June 2026
- Ben Burston, Chief Economist, Knight Frank, Australian Horizon 2026
- Colliers and CBRE data, cited in “Why Australia’s industrial property sector is impossible to ignore”, Australian Property Investor Magazine, March 2026
