Everything You Need to Know About Logistics Hub Loans

What Lenders Want to See Before They Fund a Logistics Property

Lenders treat logistics hubs differently to standard commercial property because the income depends on occupancy, tenant strength, and the condition of the building. They'll assess the property's current lease terms, the financial position of your tenants, and whether the building suits multiple uses if the tenant leaves. If the property is owner-occupied, they'll look at your business financials, trading history, and whether the business can service the loan without relying on speculative growth.

A commercial property loan for a logistics facility typically allows you to borrow between 60% and 70% of the property's value, depending on whether the property is tenanted or you're occupying it yourself. The deposit requirement means you'll need to show genuine savings or equity in other assets. Lenders also want to see that the business or tenants generate enough income to cover the loan repayments, with a buffer built in.

Mackay's industrial property market has grown around the resource sector and port logistics. Properties near the Paget industrial precinct or along the Mackay Ring Road are valued for their proximity to major transport routes and the Port of Mackay. If you're buying in these areas, lenders will factor in local demand, vacancy rates, and whether the property's design suits current logistics needs like container access, loading docks, and ceiling height.

How Loan Structure Changes Depending on Occupancy

If the logistics hub is tenanted, lenders will rely heavily on the lease as proof of income. They'll want to see a lease with at least three years remaining, ideally with options to renew, and they'll assess the tenant's ability to pay. A property leased to a national freight company or a government-backed tenant will get you lower interest rates and higher borrowing capacity than a property with a short-term tenant or one with weak financials.

For owner-occupied logistics properties, the loan structure shifts. Lenders assess your business's ability to service the debt using profit and loss statements, tax returns, and cash flow projections. They'll also consider whether the property adds value to your business operations or whether you're stretching to afford it. In our experience, businesses that can show consistent revenue and a clear reason for needing the space get more favourable terms than those buying speculatively.

Consider a transport business looking to purchase a 2,000-square-metre warehouse near Paget to consolidate operations currently spread across two leased sites. The business has three years of financial statements showing steady revenue, and the purchase will reduce monthly overheads by consolidating rent and improving logistics efficiency. The lender structures the loan as a commercial property loan with a 65% loan-to-value ratio, meaning the business needs to provide the remaining 35% as a deposit. The loan is set up with variable interest rates and flexible repayment options, allowing the business to make extra payments during strong trading periods. The business also uses asset finance separately to fund forklifts and racking systems, keeping those costs outside the property loan.

Fixed vs Variable Rates for Commercial Property Finance

Commercial property loans come with the choice between fixed interest rates and variable interest rates. A fixed rate locks in your repayment amount for a set period, usually between one and five years. That works if you want certainty and you're buying in a rising rate environment. A variable rate moves with the market, which means your repayments can go up or down, but you'll usually get access to a redraw facility and the ability to make extra repayments without penalty.

Some buyers split the loan, fixing part of it for stability and leaving the rest variable for flexibility. That approach makes sense if you expect your business to have uneven cash flow or if you want the option to pay down debt faster when revenue is strong. We regularly see this structure used by businesses that have seasonal peaks or that plan to refinance within a few years.

What Valuation and LVR Mean for Your Deposit

The lender will order a commercial property valuation before approving the loan. The valuer assesses the property based on recent sales of similar logistics properties, the income it generates, and its condition. If the valuation comes in lower than the purchase price, you'll need to cover the shortfall with a larger deposit or renegotiate the sale price.

The loan-to-value ratio, or commercial LVR, determines how much the lender will advance. A 65% LVR means if the property is valued at $1 million, the lender will provide $650,000 and you'll need to cover the remaining $350,000 plus settlement costs. If the property is in strong demand or has a long lease to a quality tenant, some lenders will stretch to 70%. If it's vacant or in need of work, expect the LVR to drop to 60% or lower.

Costs Beyond the Purchase Price

Buying commercial property involves more than the deposit and the loan amount. You'll pay stamp duty, which in Queensland is calculated on a sliding scale and can add tens of thousands to the upfront cost. Legal fees for commercial property are higher than residential because the contracts are more complex and often include lease assignments or tenant negotiations. You'll also pay for the valuation, building and pest inspections, and any environmental reports the lender requires.

Some lenders offer pre-settlement finance to cover these costs if you don't have the cash on hand. That allows you to settle the purchase without draining your business's working capital, but it adds to the total debt and needs to be factored into your serviceability calculations. If you're also looking at business loans to fund fit-outs or equipment, keep those separate from the property loan so each facility is structured for its purpose.

How Long It Takes to Settle a Commercial Property Loan

Commercial finance moves slower than residential lending because the assessment is more detailed. Expect the process to take four to eight weeks from application to settlement, depending on how quickly you can provide financial documents and how long the valuation takes. If the property is tenanted, the lender will want to review the lease and may request a tenant reference or financials.

You can speed things up by having your financial records ready before you make an offer. That includes business tax returns, profit and loss statements, balance sheets, and details of any existing debts. If you're refinancing an existing commercial property to fund the purchase, the process can take longer because the lender needs to assess both properties.

When to Use Bridging or Development Finance Instead

Not every logistics property fits a standard commercial mortgage. If you're buying a property that needs work before it can be leased or occupied, you might need commercial bridging finance or commercial development finance instead. Bridging loans are short-term facilities, usually six to twelve months, that let you buy the property quickly and refinance once the work is done and the property is revalued.

Development finance applies if you're planning to build or substantially modify the property. These loans release funds in stages as the work progresses, known as a progressive drawdown. They cost more than a standard commercial property loan because the risk is higher, but they give you access to capital as you need it rather than in a lump sum upfront.

Consider a buyer purchasing a partly vacant logistics facility near the Mackay Ring Road with plans to refurbish the office area and secure a new tenant. The property is valued lower because of its condition, but the buyer has a letter of intent from a tenant willing to sign a five-year lease once the work is complete. The buyer uses commercial bridging finance to acquire the property, funds the refurbishment separately, and refinances to a standard commercial property loan once the tenant moves in and the property revalues higher. The bridging loan has a higher interest rate, but it allows the buyer to move quickly and secure the property before another buyer steps in.

What Happens If You Want to Refinance Later

Most buyers refinance their commercial property within five to seven years, either to access equity, reduce their interest rate, or consolidate debt. Commercial refinance works similarly to the original loan process, with the new lender ordering a valuation and assessing your financial position. If the property has increased in value or you've paid down the loan, you may be able to access additional funds without selling.

Refinancing also makes sense if your business has grown and you want to negotiate a lower rate or switch from a fixed to a variable loan. Some lenders will waive application fees or offer discounted rates if you're refinancing a performing loan, but you'll still need to cover valuation and legal costs.

Call one of our team or book an appointment at a time that works for you. We'll assess your position, walk you through the loan options, and structure the deal so it fits how your business actually operates.

Frequently Asked Questions