The Brief

The client had been renting premises nearby and wanted to own the building their business operated from, purchased through their self-managed super fund.

The structural logic is straightforward. The business pays rent either way. Paid to a landlord it is a cost; paid to the fund it becomes retirement savings, with the asset held outside the operating entity.

We should be direct about the boundary of our role here. Whether an SMSF acquisition suits a particular member — contribution and borrowing limits, concentration of fund assets, the requirement that the lease be on arm’s length commercial terms at market rent, and the fund’s own liquidity — is a question for the client’s accountant and licensed adviser, and it was settled with them before we started. Our mandate was the property.

Buying Where You Already Rent

An occupier who has spent years in a precinct knows things a spreadsheet does not: which streets flood, where the trucks bank up, which complexes are well run. That knowledge is genuinely valuable.

It also produces two predictable errors.

The first is anchoring. In a tightly held complex, the last recorded sale becomes the reference price for everything that follows. Occupiers who watch a precinct closely know that number well, and they treat it as the value rather than as a single data point produced by one buyer’s circumstances on one day. Buildings then trade off each other in a slow upward ratchet with nobody independently testing what the space is actually worth.

The second is attachment. Wanting a unit in a specific complex, on a specific street, reduces a search to two or three possible outcomes, and a buyer with three options has no leverage in any of them. Vendors identify that constraint quickly.

How We Approached It

We rebuilt the value case from the ground up rather than from the last sale — land rate for the precinct, improved rate per square metre against genuinely comparable stock across the broader area, and the rental evidence underneath it. That produced a defensible number that was not derived from the complex’s own recent transactions.

We then widened the search beyond the streets the client already knew, using the operational requirements as the filter rather than familiarity: clearance, access and turning circle for their vehicles, power supply, office component, and proximity to their staff and customers. Several buildings the client had never considered met the requirement as well as the ones they had.

Widening the field is what created the negotiating position. A buyer with alternatives can decline.

The Outcome

A near-new industrial property in a well-established and highly sought-after precinct, acquired at circa $2m — below comparable evidence within the same complex and the surrounding stock.

The business occupies the building. The rent now accrues to the client’s super fund rather than to a landlord.