Commercial rental appraisal
A commercial rental appraisal is an agent’s opinion of the market rent for an office, shop, warehouse or other business premises. Unlike a home, it is usually quoted as a yearly rent per square metre, and it depends on whether the lease is gross or net, who pays the outgoings, what incentives are on offer and how long the lease runs.
For Adelaide office, retail and industrial property. Our commercial team leases and manages it as well as selling it.
How commercial rent differs
Rent per square metre
Usually quoted per square metre of lettable area, per year, so a 180 m² shop can be compared with a 240 m² one.
Gross or net
Under a net lease the tenant pays outgoings on top of the rent; under a gross lease they are built in. Compare rents on the same basis.
Incentives
Rent-free months or a fit-out contribution lower the rent a tenant effectively pays, so the face rent and the effective rent can differ.
Lease terms
Leases commonly run three to five years with options, and the review method, fixed, CPI or market, shapes what a tenant will pay.
How is commercial rent appraised?
Much like a home, from comparable leases: premises of a similar type, size and standard nearby that have leased recently, adjusted for the differences. The adjustments are where commercial work differs. Exposure and foot traffic matter for a shop, fit-out and parking for an office, clearance height and loading access for a warehouse. So does what the premises may lawfully be used for, which in South Australia is set by the zoning under the Planning and Design Code.
The appraisal should state its basis: rent per square metre, gross or net, whether GST is on top, and the lease term it assumes. Commercial rent generally attracts GST, so a figure that does not say whether it includes GST cannot be compared with one that does.
Commercial rent appraisal or valuation?
An appraisal from a commercial agent is the usual starting point for setting a rent, re-leasing, or preparing for a rent review. A valuation by a certified valuer is paid for, and it is what a lender or court relies on. Many leases with a market review say an independent valuer decides if landlord and tenant cannot agree. Retail shop leases in South Australia are also covered by the Retail and Commercial Leases Act 1995, which includes rules on rent reviews, so take legal advice before relying on any figure in a review.
What to have ready
- The address and the lettable area, or a floor plan
- The current lease, if tenanted, with the rent, review dates and options
- The outgoings, and which of them the tenant pays
- The permitted use and any consent conditions
- Parking, access, fit-out and any recent works
For a house, unit or townhouse, book a free rental appraisal instead, and our property managers will handle it.
Ask for a commercial rent appraisal.
Office, retail and industrial property across Adelaide. Tell our commercial team the address and what the appraisal is for; they reply within one business day.
Common questions
- How is commercial rent calculated?
- Usually as a yearly rent per square metre of lettable area, multiplied by the area. Whether outgoings and GST are on top depends on the lease, so always compare rents on the same basis.
- What is the difference between gross and net rent?
- Net rent excludes the outgoings, which the tenant pays on top; gross rent includes them. Outgoings typically cover council and water rates, insurance and building maintenance, and which of them a tenant can be asked to pay depends on the lease and, for retail shops, on the law.
- Does commercial rent include GST?
- Commercial rent generally attracts GST. A quoted rent should say whether GST is included; if it does not, ask.
- Can Wemark lease my commercial property?
- Yes. Our commercial team leases and manages office, retail and industrial property as well as selling it. Start with the commercial enquiry form.