Retail Leasing vs Buying: What’s Best For Your Business?

Did you know that retail leasing is on the rise in Australia? A recent study by Mordor Intelligence shows that the Australian commercial real estate market has done well in recent years, particularly in Sydney and Melbourne. And this market is predicted to grow at an annual average return of 8.46% between 2024 and 2029.

But, you may be asking yourself if leasing is really the better option. The decision between buying and leasing depends on many factors, including your business goals and your current financial situation. LeaseWise, a leading retail leasing specialist in Australia, takes a closer look at the pros and cons of each option.

Owning Retail Space

Pros:

  • Possible Investment growth
  • Control over renovations and modification
  • Sense of ownership and stability

Cons:

  • High costs upfront (e.g. down payment, fees)
  • Less adaptable if business needs change
  • Property values can fluctuate
  • Capital is tied up and unavailable for subsidising business growth 

Leasing Retail Space

Pros:

  • Lower upfront costs
  • More flexibility to changing needs
  • More capital for business growth and development
  • Can use the expertise of specialist property consultants to negotiate better deals

Cons: 

  • Annual rent increases
  • Limited control with the landlord setting restrictions

Advice for Choosing the Right Strategy

Consider the following factors when deciding between buying or leasing:

  • Business Age and Stability: Long-established businesses may be in a better financial position to consider a property purchase.
  • Growth Prospects: If your business is currently in a rapid expansion phase or you have some big changes planned, leasing offers greater flexibility.
  • Risk: Establish how comfortable you are with the risks associated with owning a property.
  • Capital: Does your business have the necessary capital to purchase a property, or would this capital be better used to grow the business?

How LeaseWise Can Help

At LeaseWise, we understand the importance of choosing the most suitable retail space for the long-term success of your business.

Our team of experts can help you in the following ways:

  • Assess your specific business needs and goals.
  • Review the viability of particular locations.
  • Negotiate the best lease terms.
  • Advocate for your interests as a tenant. 

Owning your retail space offers stability and long-term investment potential. Leasing provides more flexibility physically and financially with more accessible capital. Working with a trusted specialist retail property consultant like LeaseWise can assist in making the best decisions for your business and set you up for success. 

Contact LeaseWise today to book your consultation with one of the leading retail leasing specialists in Australia, representing small to medium-sized retailers nationally since 1998.