What is commercial property?

Commercial property is property used for business purposes, as opposed to residential purposes.

Commercial property comes in many forms. They include:

• Retail buildings.
• Industrial buildings.
• Office complexes.
• Warehouses.

The Capex rate in South Africa is currently +11% for commercial properties, versus 5-8% for residential properties.

Note that most banks will only finance up to 75% of a commercial property purchase, meaning you’ll need a deposit of at least 25%.

Banks usually require commercial property loans to be paid off in under 10 years instead of 20 or 30 years for a home loan.