5 Proven Ways to Drive Capital Growth in Commercial Property Investment

Updated: 21 August 2025

The beauty of providing commercial property syndicates is the surprise on investors’ faces when we tell them we’ve added 30 per cent to their initial investment (or almost doubled it).

That’s right, it’s not just about a cash return. Commercial property is rife with opportunity for capital growth – if you know how to create it. Here are five ways we’ve driven capital growth from decades of commercial property investment.

1. Extend the existing lease

The value of your property is heavily dependant on the lease agreements you have in place with your tenants. If the leases are short, then so too will be your WALE (Weighted Average Lease Expiry). So, you’ll want that WALE as high as possible.

If you have a lease expiry on the way, or you’ve just purchased a property with a relatively short lease, look to negotiate an extension.

Be aware that sometimes this may involve an incentive, like a reduction in rent, a rent-free period or improvements to the property at your cost.

2. Find a better tenant

In the event you can’t extend your tenant’s lease, or maybe you decide you can find a stronger one, upgrade to a better tenant.

National and multinational companies are ideal, particularly if they are ASX-listed.

The larger the business, typically the more secure they are in the long run against any economic downturn. They should have history of solid performance and a positive outlook ahead. Plus, they may have a parent company, like Wesfarmers, Woolworths or a major bank, who can bail them out in the event of closure.

Stronger tenants bode well for the property’s valuation, as valuers will consider the strength of the tenant in their valuation.

3. Increase signage and exposure

When a tenant is better exposed to the cars passing by their store or the foot traffic streaming passed their office, there is a likelihood of better business performance.

We have retail properties with over 50,000 vehicles passing by each day. By increasing external facades and improving visibility from the road, we’ve managed to help reposition these retail centres as the go-to destination in their area. The results are evident.

4. Get your hands dirty: Add value for your tenants

Capital growth often comes from value-add improvements. Listening to tenants about their needs before or after purchase can uncover cost-effective upgrades – new flooring, better air conditioning, or additional storage. Even bigger improvements like hardstand, solar panels, or end-of-trip facilities can make tenants more committed to the site.

These upgrades don’t just retain tenants – they directly enhance the long-term valuation of the property.

5. Invest at 6 o’clock — in markets with high tenant demand

Smart investors know to watch the “property clock.” Buying at 12 o’clock (the peak) often means paying top dollar. Instead, targeting assets in weaker or up-and-coming markets – around 6 o’clock on the clock – can deliver significant upside. High vacancy markets, for example, let investors negotiate strong deals and secure quality tenants. As the cycle recovers, the property’s value can rise substantially.

Every commercial property investment has unique opportunities for capital growth. Identifying them requires market knowledge, tenant insight, and experience in timing the cycle. If you want to grow your investment with expert guidance, consider investing alongside a professional commercial property syndicate.

For more information on investing alongside experts in a commercial property syndicate, get in touch with us today.