HOW TO MINIMISE THE BIGGEST RISKS IN COMMERCIAL PROPERTY INVESTING
Commercial property can deliver strong returns, but the risks are real. Here’s how to spot the danger zones and protect your investment.
2 min
Commercial property can deliver higher yields, longer leases, and more passive income than residential. But with greater returns come greater risks. The rules are different, the stakes are higher, and one misstep can turn a promising asset into a financial burden.
Here, property expert Abdullah Nouh outlines five of the biggest risks in commercial investing and how to manage them strategically.
1. Vacancy risk
Vacancies in commercial property cut deeper than in residential. An empty building means no rent, yet you’re still footing the bill for rates, insurance and maintenance.
This is especially dangerous in oversupplied markets. In major CBDs like Melbourne and Sydney, office vacancy rates have climbed as high as 30 per cent. In such environments, landlords often need to offer high-end fit-outs or generous incentives to attract tenants.
How to minimise it: Invest in tightly held, high-demand locations. Choose properties with secure, long-term leases and flexible layouts that can suit multiple industries if a tenant moves out.
2. Weak lease structures
Not all leases offer equal protection. Some may appear strong – long-term, high rent, decent yield – but lack real security for the landlord. Some tenants can exit with minimal penalty. Others sign inflated leases that look good on sale but collapse at renewal.
How to minimise it: Scrutinise lease terms. Know how rent increases are structured, whether there are break clauses, and whether the rent reflects market conditions. Favour leases with guarantees, security deposits, or cash bonds – and always vet the financial health of the tenant.
3. Overpaying
A high yield doesn’t always mean a good deal. A 7.5 per cent return from a regional tenant in a shaky industry may be far riskier than a 5.5 per cent return from a stable, ASX-listed tenant in a prime location. Chasing numbers without context exposes you to tenant defaults, falling rents, or limited resale options.
How to minimise it: Focus on tenant quality and lease sustainability, not just the headline yield. Understand the tenant’s industry and how it might weather an economic downturn. Always base your valuation on true market rent – not inflated or unsustainable figures.
4, Market volatility
Commercial sectors respond differently to economic shifts. Retail has been hit by e-commerce, while office spaces face challenges from hybrid working. Yet some sectors – logistics, healthcare, childcare – have proven resilient.
How to minimise it: Target essential services less vulnerable to economic cycles. Stay across industry trends and adjust your portfolio as needed. Diversify across sectors and regions to spread risk.
5. Finance and liquidity
Commercial finance is trickier than residential. It requires larger deposits, stricter checks, and often hinges on lease strength, not your personal income. Selling can also be slower – especially if your tenant is weak or the lease is short.
How to minimise it: Use brokers who understand lease-doc lending, where loans are based on rental income. Buy properties with strong leases in prime locations to ensure broader buyer appeal. Always plan your exit strategy and maintain cash buffers to manage tenant turnover or delayed sales.
Commercial property isn’t for everyone – but for those who know the risks and manage them well, it can be a powerful tool for building wealth. Smart investors don’t just buy for today. They plan for what could go wrong and structure their deals to survive it.
Abdullah Nouh is the founder of Mecca Property Group, a boutique buyer’s agency in Melbourne, helping Australians build wealth through strategic property investment.
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The lunar flyby would be the deepest humans have traveled in space in decades.
4 min
It’s go time for the highest-stakes mission at NASA in more than 50 years.
On April 1, the agency is set to launch four astronauts around the moon, the deepest human spaceflight since the final Apollo lunar landing in 1972.
The launch window for Artemis II , as the mission is called, opens at 6:24 p.m. ET.
National Aeronautics and Space Administration teams have been preparing the vehicles to depart from Florida’s Kennedy Space Center on the planned roughly 10-day trip. Crew members have trained for years for this moment.
Reid Wiseman, the NASA astronaut serving as mission commander, said he doesn’t fear taking the voyage. A widower, he does worry at times about what he is putting his daughters through.
“I could have a very comfortable life for them,” Wiseman said in an interview last September.
“But I’m also a human, and I see the spirit in their eyes that is burning in my soul too. And so we’ve just got to never stop going.”
Wiseman’s crewmates on Artemis II are NASA’s Victor Glover and Christina Koch, as well as Canadian Space Agency astronaut Jeremy Hansen.
What are the goals for Artemis II?
The biggest one: Safely fly the crew on vehicles that have never carried astronauts before.
The towering Space Launch System rocket has the job of lofting a vehicle called Orion into space and on its way to the moon.
Orion is designed to carry the crew around the moon and back. Myriad systems on the ship—life support, communications, navigation—will be tested with the astronauts on board.
SLS and Orion don’t have much flight experience. The vehicles last flew in 2022, when the agency completed its uncrewed Artemis I mission .
How is the mission expected to unfold?
Artemis II will begin when SLS takes off from a launchpad in Florida with Orion stacked on top of it.
The so-called upper stage of SLS will later separate from the main part of the rocket with Orion attached, and use its engine to set up the latter vehicle for a push to the moon.
After Orion separates from the upper stage, it will conduct what is called a translunar injection—the engine firing that commits Orion to soaring out to the moon. It will fly to the moon over the course of a few days and travel around its far side.
Orion will face a tough return home after speeding through space. As it hits Earth’s atmosphere, Orion will be flying at 25,000 miles an hour and face temperatures of 5,000 degrees as it slows down. The capsule is designed to land under parachutes in the Pacific Ocean, not far from San Diego.
Is it possible Artemis II will be delayed?
Yes.
For safety reasons, the agency won’t launch if certain tough weather conditions roll through the Cape Canaveral, Fla., area. Delays caused by technical problems are possible, too. NASA has other dates identified for the mission if it doesn’t begin April 1.
Who are the astronauts flying on Artemis II?
The crew will be led by Wiseman, a retired Navy pilot who completed military deployments before joining NASA’s astronaut corps. He traveled to the International Space Station in 2014.
Two other astronauts will represent NASA during the mission: Glover, an experienced Navy pilot, and Koch, who began her career as an electrical engineer for the agency and once spent a year at a research station in the South Pole. Both have traveled to the space station before.
Hansen is a military pilot who joined Canada’s astronaut corps in 2009. He will be making his first trip to space.
Koch’s participation in Artemis II will mark the first time a woman has flown beyond orbits near Earth. Glover and Hansen will be the first African-American and non-American astronauts, respectively, to do the same.
What will the astronauts do during the flight?
The astronauts will evaluate how Orion flies, practice emergency procedures and capture images of the far side of the moon for scientific and exploration purposes (they may become the first humans to see parts of the far side of the lunar surface). Health-tracking projects of the astronauts are designed to inform future missions.
Those efforts will play out in Orion’s crew module, which has about two minivans worth of living area.
On board, the astronauts will spend about 30 minutes a day exercising, using a device that allows them to do dead lifts, rowing and more. Sleep will come in eight-hour stretches in hammocks.
There is a custom-made warmer for meals, with beef brisket and veggie quiche on the menu.
Each astronaut is permitted two flavored beverages a day, including coffee. The crew will hold one hourlong shared meal each day.
The Universal Waste Management System—that’s the toilet—uses air flow to pull fluid and solid waste away into containers.
What happens after Artemis II?
Assuming it goes well, NASA will march on to Artemis III, scheduled for next year. During that operation, NASA plans to launch Orion with crew members on board and have the ship practice docking with lunar-lander vehicles that Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have been developing. The rendezvous operations will occur relatively close to Earth.
NASA hopes that its contractors and the agency itself are ready to attempt one or more lunar landing missions in 2028. Many current and former spaceflight officials are skeptical that timeline is feasible.
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