Unique offering to invest in commercial property in Western Australia

If you’re thinking about purchasing a commercial property but find the responsibilities and risks of direct property ownership daunting, it’s best to seek expert advice about structures that offer better alignment.

We spoke with Sullivan Property director Brian Sullivan about how West Australians are pooling their funds to invest in high-quality commercial property — with the added benefit of professional management. This alternative method of investing in the commercial property sector is known as a property trust.

Sullivan said it’s ideal for anyone hesitant to invest, as the trust not only gives you access to a high-quality portfolio of commercial property but is also managed by a team with a strong track record of delivering both stable returns and capital growth. Additionally, the Sullivan team co-invest in every trust and syndicate they offer.

“The property trust structure effectively allows multiple investors to pool their funds to invest in commercial property. We then manage the trust for the investors including the purchase of the property, ongoing management, maintenance and eventual sale of the property,” Mr Sullivan explained.

He noted that trusts not only offer professional oversight but also provide access to larger and often higher-quality assets than individual investors might be able to purchase on their own.

“A trust structure can deliver diversified exposure, income stability through lease agreements with commercial tenants, and risk management—all under the guidance of experienced professionals,” Mr Sullivan said.

Why Western Australia?

“Western Australia, and Perth in particular, is experiencing strong economic momentum driven by a strong resource sector, growing population and ongoing infrastructure development” Mr Sullivan explained.

“Commercial property in Western Australia offers the potential for attractive yields, regular income through secure leasing, and the benefit of capital growth over time.”

BSP Commercial Trust No.4

This specific trust was established on 2 October 2019 as a special-purpose unit trust to acquire and actively manage a diversified portfolio of income-generating commercial properties. It currently holds a diversified group of commercial properties including modern childcare centres and a neighbourhood shopping centre. The trust focuses on assets with secure, long-term leases to quality tenants and the potential for capital appreciation.

And while market fluctuations are inevitable, he said a well-managed trust can help cushion the impact and manage the risk through diversification.

“Property trusts help investors spread risk across different assets and sectors,” Mr Sullivan noted.

“Instead of concentrating funds in a single property, or single trust, investors can participate in a number of trusts spreading their risk across multiple professionally managed commercial properties and trusts.”

Simply put, it’s like not putting all your eggs in one basket. And, importantly, investor liability is limited.

“The investor’s risk is quarantined to the amount they invest in the specific trust. The borrowings of the trust are non-recourse and secured against the property only,” Sullivan said.

“Even in a worst-case scenario where the property is sold below its loan value, investors are not personally liable for any shortfall beyond what they invested.”

So, what should you look for in a trustworthy operator?

Like any relationship, investors should consider the track record and alignment of the manager.

“Transparency, performance history, and clear communication are essential,” Mr Sullivan said.

“But just as important is the manager’s willingness to invest alongside their clients. At Sullivan Property, we co-invest in every project, ensuring that we are genuinely committed to the long-term success of each investment.”

Sullivan Property Consultants was established in 2010 to help clients make better investment decisions in the retail, commercial, and industrial real estate sectors. Their shared commitment to investing alongside investors in each project ensures not only strong-performing assets are selected but also the active management to deliver long-term value. For more information, visit the website.