Industrial
Warehousing, light manufacturing, distribution. Strongest LVRs because of stable tenant base and resale market.
- LVR: 65% to 75%
- Rate: 7% to 10%
Loan type
Commercial property loans for New Zealand businesses.
Property-secured term lending for owner-occupier or investor purchases. Indicative 7% to 11% per annum across 5 to 25-year terms. Major-bank dominated.
Last reviewed 5 May 2026
Indicative repayment
Weekly
$2,240/week
$9,706 /month $364,745 total interest
$800,000
$5,000 $500,000
10 years
6 months 5 years
8.00% p.a.
8% (secured) 30% (unsecured)
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
Your $800,000 scenario
10 years at 8.00%. Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
Educational
Indicative only. Why we say this
Quick answer
NZ commercial property loan basics.
- Property-secured first mortgage registered on the commercial property at LINZ.
- $200K to $20M+ NZ commercial property lending range. Larger transactions handled by relationship banking.
- Indicative 7% to 11% major banks at the lower end on clean owner-occupier; specialists 9% to 11%.
- Up to 25 years longest term in NZ business lending. Owner-occupier and investor common terms.
What it is
Property-secured term lending for commercial real estate.
A commercial property loan is term lending secured against commercial property: an industrial unit, a retail building, an office, a hospitality site, or a mixed-use building. The structure is the dominant choice for owner-occupier business property purchases and for investor purchases.
Owner-occupier loans are commonly priced lowest because the business itself occupies the property and the lender views the rent-equivalent as the loan service. Investor loans price slightly higher because the income source is a third-party tenant whose lease term may be shorter than the loan term.
NZ commercial property lending is overwhelmingly major-bank (ANZ, ASB, BNZ, Westpac, Kiwibank), with non-bank specialists (Heartland, Avanti, Basecorp) playing in the harder credit and faster-decision niches. Commercial property accounts for a substantial share of the NZ business lending book.
Amount
$200K to $20M+
Term
5 to 25 years
LVR
60% to 70% typical
Rate band
7% to 11% indicative
Property types
Six common NZ commercial property classes.
Retail
High street, suburban centres, large-format. LVRs depend on location strength and tenant covenant.
- LVR: 55% to 65%
- Rate: 8% to 11%
Office
CBD and suburban offices. Tenant covenant and lease term drive LVR.
- LVR: 60% to 70%
- Rate: 7% to 10%
Hospitality
Restaurants, cafes, bars, hotels. Specialist underwriting; commonly higher rate band.
- LVR: 50% to 65%
- Rate: 8% to 11%
Mixed-use
Retail-with-residential, office-with-retail. LVRs blend across components.
- LVR: 55% to 70%
- Rate: 7% to 11%
Specialist
Childcare, medical, service stations, cold storage. Specialist underwriting and tenant-specific risk.
- LVR: 50% to 65%
- Rate: 8% to 11%
Owner-occupier vs investor
Two common NZ commercial property loan structures.
| Feature | Owner-occupier | Investor | Mixed (property in trust) |
|---|---|---|---|
| Property use | Business occupies | Tenant occupies | Either |
| Income source | Business cash flow | Lease income | Lease income, possibly to related entity |
| Indicative LVR | 65% to 75% | 60% to 70% | 60% to 70% |
| Indicative rate | 7% to 10% | 8% to 11% | 8% to 11% |
| Term | Up to 25 years | Up to 25 years | Up to 25 years |
| Suits | Buying own premises | Investment property | Asset protection structures |
How it works
A typical commercial property loan application.
01
Day 1 to 14
Pre-application conversation
Initial conversation with relationship banker or commercial broker. Define purpose (owner-occupier or investor), property type, requested amount, term, and security position.
02
Day 7 to 21
Documentation pack
NZBN, business owner ID, last 12 to 24 months bank statements, P&L (typically 2 to 3 years), cash-flow forecast, lease documentation (if investor), property purchase contract, deposit confirmation.
Documents commonly required
- NZBN
- Director ID
- 12-24 months bank statements
- 2-3 years P&L
- Cash-flow forecast
- Lease documents (investor)
- Purchase contract
- Deposit proof
03
Day 14 to 35
Valuation and credit committee
Lender commissions a registered valuation. Credit committee assesses against debt-service ratios, security position, tenant covenant (investor), and borrower profile. Conditional approval typically issues at this stage.
04
Day 28 to 60
Documentation and settlement
Loan documents drafted by lender, reviewed by borrower's solicitor. First mortgage registered at LINZ on settlement. Funds disburse to vendor; ownership passes to borrower.
NZ commercial property loan timelines run 4 to 8 weeks from initial conversation to settlement. Smaller, simpler purchases on existing relationships can compress to 3 weeks; harder credit, complex structures, or large transactions can run 8 to 12 weeks.
Worked scenarios
Three NZ commercial property loan scenarios.
Indicative monthly costs and structures across three different NZ commercial property purchases.
Manufacturing
Auckland industrial unit, owner-occupier
A Mt Wellington light manufacturer buying its own 800m² industrial unit instead of continuing to rent. Purchase price $1.6M. Trading 12 years, $90K monthly turnover, 30% deposit available.
Structure: 70% LVR commercial mortgage at 8% indicative, P&I across 20 years. Monthly repayment ~$9,400 vs current rent of ~$10,500. Equity builds in the property over the term.
Indicative figures
- Purchase price
- $1.6M
- Loan
- $1.12M
- Term
- 20 years
- Rate
- 8% p.a.
- Monthly
- ~$9,400
Property investment
Wellington retail, investor
A Wellington-based investor buying a Cuba Street retail unit with an established 6-year lease in place. Purchase $1.1M, lease income $85K p.a. (gross). Rate slightly above owner-occupier reflecting tenant-source income.
Structure: 65% LVR investor commercial mortgage at 9% indicative, interest-only for 5 years then amortising 20 years. Monthly cost interest-only ~$5,360.
Indicative figures
- Purchase price
- $1.1M
- Loan
- $715K
- Lease income
- $85K p.a.
- Rate
- 9% p.a.
- Monthly (IO)
- ~$5,360
Hospitality
Christchurch hospitality, owner-occupier
A Christchurch restaurant group buying its current premises (Riccarton, freehold). Purchase $850K. Trading 15 years, $1.2M annual turnover. Lender treats hospitality property as specialist class.
Structure: 60% LVR commercial mortgage at 9.5% indicative, P&I across 15 years. Specialist hospitality underwriting; rate slightly above industrial because of resale specificity.
Indicative figures
- Purchase price
- $850K
- Loan
- $510K
- Term
- 15 years
- Rate
- 9.5% p.a.
- Monthly
- ~$5,330
Lenders
NZ commercial property lenders.
Best for broad commercial property
ANZ Business
Largest NZ commercial property lender. Owner-occupier, investor, and development across all asset classes.
Indicative rate band:7% to 10% p.a.
Read onBest for industrial and rural property
ASB Business
Strong industrial and rural commercial property book. Mid-priced major-bank tier.
Indicative rate band:7% to 10% p.a.
Read onBest for mid-market property
BNZ Business
BNZ commercial property across SME and mid-market. Strong on owner-occupier industrial.
Indicative rate band:7% to 10% p.a.
Read onBest for investor and mixed-use
Westpac Business
Strong on investor and mixed-use commercial property. Major-bank pricing.
Indicative rate band:7% to 10% p.a.
Read onBest for NZ-owned bank, smaller transactions
Kiwibank Business
NZ-owned bank with SME-focused commercial property; strong on smaller transactions ($200K to $1M).
Indicative rate band:7% to 10% p.a.
Read onBest for speed-sensitive, harder credit
Heartland Bank
Faster than major banks for commercial property; useful for harder credit profiles or specialist asset classes.
Indicative rate band:8% to 11% p.a.
Read onTrade-offs
Where commercial property loans fit, and where they don't.
Where it fits
- Owner-occupier businesses tired of paying rent into someone else's asset.
- Investors building a commercial property portfolio with predictable income.
- Borrowers with substantial deposit (30% to 40%) wanting cheap long-term funding.
- Established trading businesses with consistent cash flow over 3+ years.
- Long-term holdings where the rate locks in below alternative funding sources.
Where it doesn't
- Time-sensitive purchases; commercial property loans run 4 to 8 weeks vs 1 to 2 weeks for asset-secured business term loans.
- Brand-new businesses; lenders typically require 2+ years trading history.
- Speculative or single-tenant specialist assets where the lender's LVR drops sharply.
- Borrowers without 25%+ deposit; sub-25% deposit pushes the loan into specialist or higher-priced lenders.
- Property classes where the resale market is thin (specialist hospitality, rural commercial).
When it goes wrong
Default scenarios on commercial property loans.
Commercial property loans default through the same path as residential mortgages: missed payments, formal default, mortgagee sale. The commercial-specific risks are rate resets and tenant-loss on investor property.
Missed payments
Late or missed monthly payments commonly trigger a relationship-banker check-in within the first cycle. The lender will typically work with a borrower whose underlying business is solvent on a payment plan or term extension.
What happens:Late fees apply ($50 to $150 per missed payment). Credit file marks accumulate. Continued non-payment escalates to formal default review (typically 90 days arrears).
Tenant loss on investor property
On investor commercial property, tenant departure or default removes the income source. Lender may require equity injection or interest-only relief while the property is re-let.
What happens:Borrower temporarily covers debt service from other income. Persistent vacancy can trigger an LVR review and a request to reduce the loan balance.
Formal default and mortgagee sale
After 90 days arrears and statutory notice under the Property Law Act 2007, the lender can move to mortgagee sale. The property is sold; sale proceeds are applied to loan balance, sale costs, and any fees.
What happens:Property is sold at potentially below-market values (mortgagee sales commonly clear at 80% to 95% of valuation). Any shortfall is pursued under the personal guarantee. Surplus, if any, returns to the borrower.
Mortgagee sale is rare on owner-occupier commercial property because the business itself loses its premises in the process. Lenders strongly prefer payment plans, term extensions, and refinance over enforcement. Investor property defaults more frequently as tenant or rate-reset risks compound.
References
Sources
- LINZ: Land titles
Where commercial property mortgages are registered.
- IRD: Commercial property
Tax framework for commercial property income and depreciation.
- Reserve Bank of NZ: Commercial property lending
NZ commercial property lending volume context.
- Property Council NZ
NZ commercial property market context.
- CBRE NZ
NZ commercial property valuation and yields.
FAQ
Commercial property loan, NZ small-business questions answered
What is a commercial property loan?
A commercial property loan is term lending secured against commercial property: industrial, retail, office, hospitality, or mixed-use buildings. It is the dominant choice for owner-occupier business property purchases (where the business buys its own premises) and for investor purchases (where the borrower buys to lease).
What rates apply to NZ commercial property loans?
Indicative rates run 7% to 11% per annum across NZ commercial property lending. Major banks price the lowest band on clean owner-occupier applications. Investor property prices slightly higher; specialist asset classes (hospitality, specialised single-tenant) higher again.
How much deposit do I need?
NZ commercial property loans typically require 25% to 40% deposit (60% to 75% LVR). Owner-occupier industrial often achieves higher LVR (up to 75%); specialist asset classes commonly require 35% to 50% deposit. Substantial deposit unlocks the lowest rate bands.
How long does a commercial property loan take to settle?
Typical timelines run 4 to 8 weeks from initial conversation to settlement. Smaller transactions on existing relationships can compress to 3 weeks; harder credit, complex structures, or large transactions can run 8 to 12 weeks. The timeline is driven by valuation, credit committee, and solicitor work.
Owner-occupier vs investor, which is cheaper?
Owner-occupier commercial property loans are typically priced 50 to 100 basis points below investor equivalents because the lender views the business cash flow servicing the loan more favourably than third-party rent.
What term can I get?
NZ commercial property loans run up to 25 years, the longest term in business lending. Common structures are 15 to 20 year P&I loans, or interest-only periods of 3 to 5 years followed by amortising P&I over the balance of the term.
Is commercial property loan interest tax-deductible?
Interest on a commercial property loan used for business or investment purposes is generally deductible against business income or rental income, subject to the accountant's confirmation. Mixed-use commercial property apportions interest by use.
Can I buy commercial property in a trust?
Yes, commercial property is commonly held in family trusts or look-through companies for asset-protection or tax-planning reasons. The loan is typically held by the trust or company; personal guarantees from beneficiaries or directors are common. The accountant and solicitor are the right people to confirm the structure.
What happens at the end of an interest-only period?
At the end of the interest-only period, the loan converts to P&I across the remaining term. Monthly payments increase materially because principal repayment now starts. Borrowers commonly refinance at this point to extend the IO period or restructure the loan.
What is a debt-service ratio?
A debt-service ratio (DSR) measures the borrower's capacity to service debt from cash flow. NZ commercial property lenders typically require DSR coverage of 1.25x to 1.5x (the cash flow available exceeds the debt service by 25% to 50%). Tighter DSR commonly triggers conditional approval or requested deposit increase.
Do I need a registered valuation?
Yes, the lender almost always commissions a registered valuation by a NZ Institute of Valuers member. The borrower typically pays for the valuation (~$1,500 to $5,000 depending on property complexity). The valuation determines the achievable loan amount.
Can a non-bank lender beat the major banks on commercial property?
On clean owner-occupier transactions, major banks are typically the cheapest. On harder credit, faster decisions, or specialist asset classes, non-bank lenders (Heartland, Avanti, Basecorp) often beat the banks on speed and accessibility. The trade-off is rate band; non-banks typically price 1 to 2 percentage points above major-bank pricing.
Related
Related reading
Secured business loan
The broader category commercial property loans sit inside.
Read onBuy commercial property
Reason-side context for commercial property purchase.
Read onANZ Business
Largest NZ commercial property lender.
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Read on