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How to choose the right syndicate for Australian commercial property investment

September 26, 2023
Categories: Commercial, Investments

Want success in commercial real estate but having trouble getting started alone? A commercial real estate syndicate could be the solution for you. Here’s how to find the right one.

Investing in commercial real estate through property syndicates in Australia has gained significant popularity in the last several years. Especially as the market’s red tape, the banks’ lending criteria and the economy’s challenges have become more prevalent.

But with the increasing number of syndicate options available, it’s crucial to make an informed choice when selecting the right property syndicate for your investment. Today, we’ll explore how to choose the right property syndicate and give you some essential insights for investing in commercial real estate in Australia.

How to choose the right syndicate for Australian commercial property investment:

1. Evaluate their track record

Before committing your hard-earned money to a property syndicate, it’s essential to assess the fund’s track record. Look into their history of success in the property market. Ask questions like:

  • What have been their best and worst investment results?
  • How have they consistently added value to their property investments?
  • What are their plans for existing and future investments?

A syndicate with a proven track record is more likely to generate stable returns for its investors.

2. Check their credentials

Just as you might verify a doctor’s credentials before seeking their medical advice, ensure that your prospective property syndicate manager is licensed and compliant with the necessary regulatory standards. In Australia, a crucial credential to look for is the AFSL (Australian Financial Services License), which indicates compliance with the Australian Securities and Investments Commission’s stringent regulations.

Learning more about AFSLs can help you understand the level of professionalism and compliance you can expect from the syndicate.

3. Assess their distribution frequency

Regular income from your investment is essential, so inquire about the distribution frequency.

Find out whether the syndicate pays out returns monthly, quarterly or annually. Monthly distributions are typically preferred by experienced syndicate participants as they provide a more predictable and consistent income stream. That’s what we provide our investors in our yield-focused investments because we know money in their pocket, sooner than later, is far more beneficial. 

4. Trust your gut

Sometimes, your initial impressions can be invaluable. Arrange a meeting or phone call with the fund manager before making your investment decision, and assess the character and integrity of those running the syndicate.

Trust your instincts – their professionalism and approach can either instill confidence or raise red flags.

5. Prioritise communication

Effective communication is paramount when investing in a property syndicate. Imagine entrusting a substantial sum of money to a syndicate and not receiving updates for the better part of a year. To avoid unnecessary worries, ensure that the syndicate emphasises regular communication to their syndicate members.

You should be well-informed about the decisions and considerations related to your investment. A transparent and communicative syndicate is more likely to build trust with its investors.

6. Ask questions early

Don’t hesitate to reach out and ask questions. Seek information about the syndicate’s investment strategy, past performance and company mandate. This proactive approach will help you gain a better understanding of whether the property syndicate aligns with your investment goals.

Choosing the right property syndicate is crucial for successful commercial real estate investment in Australia. By evaluating their track record, checking credentials, considering distribution frequency, trusting your instincts, prioritising communication and asking pertinent questions, you can make an informed decision.

Interested in Properties & Pathways as a potential fit? Reach out to learn more about our offerings, past performance and investment opportunities.

We’ve been in the property game for decades. And by far our best investment is in quality information. Want the experts’ take on the Australian commercial real estate market? Subscribe to our monthly newsletter and the next edition will be sent straight to your inbox:

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Properties & Pathways is a dynamic Australian property investment company. Our completed syndicates have provided investors an average annualised return of 21.97%. For more information on how you can invest alongside us, get in touch today.