SMSFs drive commercial mortgage demand

Sydney-based commercial mortgage originator Thinktank has seen a significant jump in the number of approved and settled transactions over the past year as more customers decide to acquire commercial property through their SMSF.

“By far the majority of enquires are related to the SMSF acquiring a property to house the beneficiaries business operations, which is contributing positively to the overall size of commercial mortgage demand,” Thinktank head of sales and distribution Peter Vala told Mortgage Business.

“There has definitely been an increase in property purchases over the last year while there has also been a marked uplift in refinancing and requests for equity release by existing owners for business and personal investment,” Mr Vala said.

“We are seeing a consistent level of enquiry and as such our outlook for the remainder of the year and into 2015 is quite positive,” he said.

Mr Vala added that the commercial property loan segment is ripe for mortgage brokers looking to diversify.

“Commercial finance covers a wide area from asset finance, commercial property finance and cash flow-based lending scenarios which are separate again to the areas of construction and development finance,” he said.

“A residential broker needs to gain access to a number of trusted lenders with whom they can genuinely workshop transactions with and that are also happy to develop a broker’s commercial lending skill set."

Most institutions will offer brokers either spot or refer models or full trail and upfront commissions, Mr Vala said.

“If a residential broker can write a home loan for a self-employed borrower, then the step to writing straightforward commercial property transactions is well within reach of them with support from an appropriate lender,” he said.