An Australian unlisted fund or syndicate buying a commercial asset should check four things before the contract goes unconditional: the leases, the WALE, the physical condition and the zoning. Tie each document to the others, put a dollar figure on every gap, and take the result to the investment committee as a range, not a single yield.
Prepared by Titleman AI, on behalf of the Titleman team. The figures in the example are invented for illustration and describe no real property.
The four checks
1. Leases. Read every lease and variation, not the schedule alone. For each tenant note the rent and review mechanism, term and options, break rights, incentives still owed, make-good obligations, and what share of outgoings is recoverable. Ask for tenant financials where one tenant carries a large share of income. Confirm that the tenants named in the rent schedule are the tenants who signed.
2. WALE. WALE is the weighted average lease expiry. Calculate it three ways: weighted by income, weighted by area, and to first break. The three can differ by years, and a fund's forecast distributions rest on the income side. Read the expiry profile beside it, because one average hides a large share of income ending in the same year.
3. Condition. Get the building report and turn each finding into a dollar amount and a year: roof, facade, services, fire systems, car park, and any remediation. Decide whether the capital work comes out of the price, the first-year budget or a reserve.
4. Zoning. Check that the current use is permitted under the planning controls, whether any use sits on existing-use rights, what else the land could be used for, and whether any approvals are outstanding. Controls differ by state and council, so a planner or lawyer confirms this.
Then tie the documents together: rent schedule to leases, leases to the income statement, income statement to the information memorandum, and the building report to the capital budget.
A worked example (illustrative A$ figures)
A single industrial asset, priced at AUD 32,000,000, with 16,000 sqm of net lettable area and three tenants:
| Tenant | Area (sqm) | Net income (A$ a year) | Years to expiry |
|---|---|---|---|
| A | 8,000 | 1,200,000 | 6.5 |
| B | 5,000 | 600,000 | 2.0 |
| C | 3,000 | 200,000 | 0.5 |
- Initial yield: 2,000,000 ÷ 32,000,000 = 6.25%.
- WALE by income: (1,200,000 × 6.5 + 600,000 × 2.0 + 200,000 × 0.5) ÷ 2,000,000 = 9,100,000 ÷ 2,000,000 = 4.55 years.
- WALE by area: (8,000 × 6.5 + 5,000 × 2.0 + 3,000 × 0.5) ÷ 16,000 = 63,500 ÷ 16,000 = 3.97 years.
- WALE to first break: if tenant A can leave at year 4.0, the income-weighted figure is 6,100,000 ÷ 2,000,000 = 3.05 years.
- Income expiring within three years: (600,000 + 200,000) ÷ 2,000,000 = 40%.
- Condition: the building report puts a roof replacement at AUD 450,000 within three years. Added to the price, the yield becomes 2,000,000 ÷ 32,450,000 = 6.16%.
- Vacancy case: if tenant C leaves and the space stays empty, income falls to AUD 1,800,000 and the yield on price to 5.63%.
The committee paper should show 6.25% as the headline and 5.63% to 6.16% as the range it must be comfortable with. Zoning does not change a number here. It decides whether a different use is a way out if tenant A goes.
What this does not replace
A checklist and software do not replace the lawyer who reviews title and the contract, the tax adviser who confirms GST and duty treatment, the building surveyor or engineer who inspects the asset, the town planner who confirms the controls, or the independent valuer. Titleman reads the documents you provide and names what is missing instead of filling it. In Australia it has no government land register or sales database behind it, and it does not apply Australian tax, duty or planning rules.
See also the general due diligence checklist and what WALT measures. To test the method on your own asset, request a demo.
Common questions
What should an Australian unlisted fund check in due diligence on a commercial property? The leases, the WALE, the physical condition and the zoning, tied to each other. Start with whether the income in the rent schedule is the income in the signed leases.
How do you calculate WALE for a commercial property? Multiply each lease's remaining term by its annual income, add them, and divide by total income. Weight by area for the space to re-let, and repeat to first break. In the example above the three results are 4.55, 3.97 and 3.05 years.
Is WALE by income or by area the better measure? By income for the cash flow you are buying, by area for the space you may have to re-let. State which one a document uses, because they can differ.
Can AI do due diligence on a commercial asset in Australia? It can read the leases and reports you provide, compute WALE, compare the documents and list gaps. Titleman works from your documents in Australia. Legal, tax, engineering and planning opinions stay with advisers.
Updated 25 October 2026.