Lease Doc Commercial Loans in Sydney

Lease doc fits Sydney's investment-grade commercial market perfectly

Sydney's investment commercial stock is largely tenanted on long, professionally-documented leases — exactly what lease doc lenders need. The credit assessment focuses on the lease covenant: tenant strength, remaining term (WALE), rent vs market, and any landlord obligations. A 7+ year lease to an established tenant with 3% annual reviews is the textbook lease doc asset, and Sydney has a deep supply of them across CBD, North Shore, Inner West and Eastern Suburbs commercial precincts.

The ICR threshold is the deciding number

Sydney lease doc lenders require minimum Interest Coverage Ratios of 1.40–1.50× on the lease income at the assessment rate. This is the single number that determines deal approval. With current commercial yields in inner Sydney sitting at 5.0–5.5% and assessment rates around 7.5–8.0%, the achievable LVR at policy ICR is often 55–62% rather than the theoretical 65% cap. We model ICR before recommending the structure — sometimes a smaller loan at lease doc beats a larger loan at full doc with personal guarantees.

Childcare, medical and government-tenanted assets win on lease doc

Sydney's strongest lease doc segments are childcare (long leases, regulated demand), medical centres in middle-ring suburbs, NDIS SDA accommodation, and any building with a state or federal government tenant. These attract the deepest lender competition and the sharpest pricing because the lease covenant carries the deal. Conversely, short-WALE retail (less than 3 years remaining), CBD office with elevated incentives, and bulky goods retail are harder to place on lease doc and may need a full doc structure.

$4.2M childcare centre, Castle Hill

92-place centre on a 15-year lease to a national operator with 3% annual reviews and CPI-linked outgoings. Net rent $290k. Loan $2.4M at 65% LVR. ICR on assessment rate of 7.75%: 1.56×. Funded at 6.75% IO with annual rate review, no personal guarantees, no income evidence — the lease was the application.

$6.8M medical centre, Hurstville

Multi-tenanted GP and allied health centre, 4 tenants on 5+5 leases with 18 months WALE on the principal tenant. Lender required principal tenant lease extension to 7 years before settlement (negotiated as a condition). Loan $4.2M at 62% LVR, 6.95% IO. Lease doc structure preserved the investor's full doc capacity for a separate development purchase.

$3.8M strata office, North Sydney

Single floor (450sqm) leased to a tier-2 professional services firm on 6+5+5 terms with 9.5 years remaining on first option. Rent $310k net. Loan $2.4M at 63% LVR, 7.10% IO 5 years then reset. Borrower retained 100% full doc serviceability for ongoing acquisitions; lease serviced the new debt entirely.