Ownership structure / self-managed super fund
Held in super. Managed to match.
An SMSF is who owns the property, not what the property is. The asset is an ordinary commercial building. The difference is the standard it has to be run to, so the lease stays at arm's length and the records satisfy your fund's auditor each year. Blox manages that across Sydney.
00 / Framing What this page is about
An SMSF is a structure, not an asset.
People talk about an SMSF property as though it were its own category, alongside industrial or retail. It is not. The fund is the registered owner of an everyday commercial building. A warehouse in the corridors, a suite in Norwest, a retail unit on a main road, any of these can sit inside super.
What changes once it does is the rule set over the ownership. The lease has to be genuinely arm's length, the rent has to be market rent, the fund's dealings have to stay separate from the members personally, and the whole arrangement has to be documented well enough to satisfy the auditor every year. That is a management discipline, and it is the work this page describes.
01 / The spine What keeps it compliant
The five things that keep a fund-held property right.
Run a commercial property inside super and these are the load-bearing items. Each one is a management job, tracked on the lease and the calendar, not left to memory.
A genuinely arm's-length lease at market rent
The foundation of the whole arrangement. There has to be a signed commercial lease, and the rent has to be market rent supported by comparable evidence, even where a member's own business is the tenant. The related relationship does not relax the terms, it raises the standard of evidence. Blox sets the rent against real leasing comparables and documents the basis.
Rent reviews documented on their dates
Whether the lease reviews on a fixed percentage, on CPI or to market, each review has to be actioned on the date the lease specifies and the outcome recorded. A review that drifts or gets skipped is both lost income and a hole in the arm's-length record. Blox calendars every review ahead of time and files the notice and the result.
Outgoings handled the way the lease says
Where the lease recovers outgoings, council and water rates, land tax, insurance, strata levies, they have to be invoiced and reconciled against the actual charges, not settled informally between owner and tenant. Handled commercially, the fund subsidises nothing and the recovery reads as genuine. Blox budgets, invoices and reconciles every financial year.
Fund and personal dealings kept separate
The arrangement only reads as arm's length if it is run at arm's length. Instructions, invoices, rent and correspondence flow through the manager, not directly between a member and their own business. That separation is what turns a related-party tenancy into a documented commercial one. Blox sits between the fund as landlord and the tenant so every dealing is on the record.
Records the auditor can sign off
Every year the fund's auditor tests whether the property was run commercially. They want the lease, the market-rent evidence, the rent review history, the outgoings reconciliation and a clean ledger. Assembled as you go, that pack is routine. Reconstructed at audit time, it is a scramble. Blox compiles the records into one dated package each year, ready to hand to your auditor.
The annual records pack
Lease, market-rent evidence, review history and reconciliation, compiled and dated before the audit is due.
02 / The role What the manager does
Blox runs the property. Your advisers run the fund.
There is a clean line between the two jobs. Your accountant and SMSF auditor look after the fund itself, the return, the structure, the compliance sign-off. Blox looks after the property that sits inside it and hands those advisers a complete, arm's-length record to work from.
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LEASE
Lease administration
Drafting, execution, variations and renewals run on commercial terms, with the lease reviewed and held on file.
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RENT
Rent and reviews
Rent collected on schedule, arrears managed formally, and every fixed, CPI or market review actioned on its date.
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OUTGOINGS
Outgoings reconciliation
Recoverable outgoings budgeted, invoiced and reconciled against actual charges each financial year.
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RECORDS
The auditor package
A single dated pack of lease, evidence, reviews and reconciliation, ready to hand to the fund's auditor.
The trustees who get caught out are not the ones who bought wrong. They are the ones who never managed it like a real tenancy.Blox Commercial / commercial management only
03 / Fit Why owners use the structure
Why commercial property suits a fund.
Commercial property sits comfortably inside super for reasons that are about how the asset behaves, not about chasing a number.
Long, structured leases
Commercial terms run for years with defined review mechanisms. That predictability suits a fund that is managing toward a long horizon, provided the reviews are actually actioned on their dates.
The tenant carries the costs
On a net lease the tenant pays the outgoings and, with the structure set up properly, the management fee. The rent the fund receives is closer to what it keeps, as long as the recovery is reconciled correctly.
Owner-occupier alignment
Many trustees lease the premises back to their own business. The fund owns the asset and the business occupies it, a common and workable arrangement, so long as the lease is run at genuine market terms.
A real, tangible asset
A commercial building is something owners understand and can see. For a fund holding a single significant asset, the management job is making sure that one asset is run to standard rather than drifting.
Documented from the start
The structure rewards order. An arrangement set up cleanly and recorded as it goes is far easier to keep compliant than one tidied up the week before the auditor calls.
One manager, one standard
A specialist commercial manager treats a fund-held property the same exacting way as any other commercial asset. No residential agent moonlighting on a warehouse, no gaps that surface at audit.
04 / Pricing What it costs
One fee. Your tenant pays.
Managing a fund-held property should cost what it costs, with nothing buried. Blox charges a 5% management fee. On a net lease that fee is recoverable as an outgoing, so the tenant carries it, and the management fee is paid by the fund as a fund expense.
- Market rent assessment included
- Annual records pack included
- No contractor markups or hidden charges
See the full breakdown on our commercial property management fees page, talk to us about commercial leasing for a vacancy, or read what sits under commercial property management.
Get a proposal05 / Answers What trustees ask
Questions a trustee asks.
An SMSF is an ownership structure, not a type of property. The fund is the registered owner of an ordinary commercial property, the same warehouse, office or retail unit any investor could buy. What changes is the rule set that sits over the ownership. The lease has to run at arm's length, the rent has to be market rent, dealings have to stay separate from the members personally, and the records have to satisfy the fund's auditor each year. That is a management job, not a property type, and it is the part Blox runs.
Yes. When a member's business occupies a property the fund owns, the lease still has to be on arm's-length commercial terms at market rent, with a signed agreement and reviews actioned on their dates. The relationship between landlord and tenant being a related one does not relax the terms, it raises the standard of evidence. Blox sets the rent against comparable leasing evidence, documents the basis, and runs the arrangement as a genuine commercial tenancy so it reads as arm's length to the auditor.
The auditor is testing whether the property has been run commercially and at arm's length all year. In practice that means a signed lease on commercial terms, evidence the rent is at market, a record of every rent review with its date and outcome, an outgoings reconciliation where the lease recovers them, a clean rent ledger, and correspondence kept separate from members' personal dealings. Blox compiles this into a single annual records pack so the auditor receives a complete, dated trail rather than a reconstruction after the fact.
A missed review is two problems at once. It is income the fund should have collected and usually cannot back-claim, and it is a gap in the arm's-length record the auditor relies on. Rent that drifts below market on a related-party lease is exactly the pattern an auditor is trained to question. Blox calendars every review date in the lease, fixed, CPI or market, and actions it before it falls due so the rent stays current and the documented trail stays unbroken.
Blox takes over management and brings the arrangement up to standard. That starts with reviewing the existing lease, assessing the rent against the market, setting up proper rent review scheduling, and identifying any gaps in the records the auditor may ask about. From handover, rent collection, reviews, outgoings and all landlord-to-tenant communication run through Blox, which establishes the separation between fund and members from day one. Most handovers settle within two to four weeks.
No. This page is general information about managing a commercial property that is held inside a self-managed super fund. It is not financial, tax or legal advice and does not take account of your fund's circumstances. Fund members should consult their own licensed adviser, accountant and SMSF auditor before making decisions about structure, acquisition or compliance. Blox manages the property, working alongside the advisers who handle the fund itself.
General information only
This page is general information about managing a commercial property held inside a self-managed super fund. It is not financial, tax or legal advice and does not take account of your fund's circumstances. Fund members should consult their own licensed adviser, accountant and SMSF auditor before making decisions. Blox manages the property; your advisers manage the fund.
06 / Adjacent Where to go next
The rest of how Blox runs a property.
07 / Talk Let's discuss your property
Send us the lease. We will read it.
Tell us about the property your fund holds and your current arrangement. We give you a clear proposal covering what we manage, how the arm's-length structure is kept, and what it costs across Sydney.
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