It enables the landlord to obtain an increase in rent that would not be achievable on a new letting in the market conditions at the review date. This is not in accordance with the fundamental purpose of a rent review clause which is to reflect changes in the value of property and/or money during the term of the lease..
In this regard, what is meant by headline rent?
A headline rent is the rent paid under a lease after the end of any rent free or reduced rent periods. It is an artificially inflated rent which ignores the rent free period or any other concessions given by the landlord to the tenant in return for a higher headline rate.
Also, what is concessionary rent? A rental concession is a compromise a landlord makes to the original rent terms in the hopes of finding a tenant quickly. The theory is that the value of the concessions is less than the value of having a tenant move into the rental quickly, thus avoiding a vacancy and accompanying vacancy costs.
Hereof, does passing rent include rent free?
Passing rent The annual rental income currently receivable on a property as at the balance sheet date (which may be more or less than the ERV). Excludes rental income where a rent free period is in operation.
What is passing rent?
Passing rent is the gross rent, less any ground rent payable under head leases.
Related Question Answers
How do you calculate net effective rent?
In short, the net effective rent is calculated by taking the total amount of concession, dividing it by the term of the lease, then deducting that amount from the monthly asking rent.What is a commercial lease premium?
A premium is the price a tenant pays to a landlord to purchase a lease. A premium is most often taken in return for the rent being reduced to what would otherwise be payable. For new commercial leases not exceeding 25 years, it is rare to take a premium.How do you calculate net effective rent on a commercial property?
When a commercial real estate landlord or broker calculates net effective rent (NER), they take the total amount of concessions, such as tenant improvements, divide it by the term of the lease and then deduct that amount from the monthly asking rent.What is a geared rent?
A geared lease is usually a long lease, often granted for 125 years or more and usually in consideration of a substantial premium paid by a developer who goes on to construct buildings on the demised land and then grants rack rented leases to occupational tenants.What is the market rent?
Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay, for a tenancy. It needs to be similar to the rent charged for similar properties in similar areas. Market rent is a useful guide for landlords when they're deciding what the rent will be.What does reversionary lease mean?
A reversionary lease is a lease that does not commence until some future date. Such a lease would be void if the lease takes effect more than 21 years from the date that of the instrument.How is NIY calculated?
To calculate net yield, you need to deduct all the expenses (ongoing costs + cost of vacancy) from the annual rental income (weekly rent x 52). You then divide that number by the property's purchase price and times it by 100. This will give you the percentage yield.What is the initial yield?
Initial Yield is the annualised rents of a property expressed as a percentage of the property value. The discount rate used to calculate the net present value (NPV) of the discounted cash flow (DCF) to equal zero is the equivalent yield, or the internal rate of return (IRR).What is the net initial yield?
The net initial yield is the ratio of net rental income and gross purchase price of a property. Annual net rental income is net of non-recoverable operating costs.What is NIY?
NIY. NIY is an abbreviation of net initial yield – a term used by property companies to describe the rental yield they expect to receive on the total price of a property allowing for the costs associated with buying the property such as stamp duty.What is an equivalent yield?
The equivalent yield is actually the discount rate that produces a present value equal to the capital value of the investment when applied to both the term and the reversion cash flows.What is development value?
GDV stands for Gross Development Value. This is the projected value of a property development once it is completed. The GDV is an important valuation metric used by investors and property developers.How does a concession agreement work?
A concession or concession agreement is a grant of rights, land or property by a government, local authority, corporation, individual or other legal entity. Under a management contract the operator will collect the revenue only on behalf of the government and will in turn be paid an agreed fee.What is rent abatement period?
By 33 on February 2, 2017. Rent abatement is a provision that may be included in a commercial or residential property lease. It entitles the tenant to suspend rent payments or pay only a portion of the rent until a landlord completes property repairs.What is passing income?
Initial Yield The initial yield is net passing income for the property divided by the sale/adjusted price. Net Passing Income is calculated as follows: Gross passing rent less outgoings. Gross passing rent includes base rent + recoverable outgoings + percentage rent + other income.What is rack rental value?
In modern usage, a rack rent is usually a rent that represents the full open market annual value of a holding, often simply called the market rent. Less frequently, a rack rent may also be "the maximum rent permitted by law", or an extortionate rent.What is a turnover rent?
A turnover lease is a lease where the rent payable by the tenant is calculated either wholly, or partly, by the actual turnover achieved by the tenant's business operated out of the premises. A rent based solely on the tenant's turnover but with the tenant guaranteeing a minimum amount of turnover.What is head rent?
A headlease is the original lease between a tenant and a landlord. In such a lease, the overall contractual responsibility is given to one identifiable tenant called the head lessee. It is a primary lease under which subleases have been granted. It is also termed as primary lease or chief lease. 
