Buying a Strata Office vs Leasing: The Numbers That Matter
Owner-occupation economics, financing terms and exit liquidity — how to decide whether your business should own its premises.
For established businesses with stable space needs, buying a strata office can convert rent — a pure expense — into equity build-up, while insulating the company from renewal risk. But the decision is more nuanced than a simple rent-versus-mortgage comparison.
Commercial property financing typically runs to 80 percent loan-to-value for owner-occupiers with strong financials, over tenures of up to 25 to 30 years. Buyers must budget for Buyer’s Stamp Duty, GST where the seller is GST-registered (often recoverable for a GST-registered buyer), legal fees and fit-out.
The liquidity trade-off is real. Strata offices in well-managed, well-located buildings resell reliably, but exit timelines are measured in months, not days. Companies that anticipate rapid headcount changes usually remain better served by leasing flexibility.
A useful framework is the ten-year total cost of occupancy: model rent escalations against mortgage amortisation, factor in maintenance-fund contributions and property tax, and stress-test the comparison at higher interest rates before committing either way.
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