Commercial rent – what to charge?
4:57 PM, 4th April 2022, 4 years ago
5
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Hi, I’m stumped! I have looked at various websites and all give weird and wonderful formulae that are confusing contradictory and I am going around in circles.
All I want to know is how to assess what the current market rental rate is for shops on a particular high street
I know it is based on the exact location and the amount of floor space available in the property but all I really need is a ballpark figure.
How do I go about finding this cost per square metre formula?
Many thanks
DSR
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Can I buy the freehold to my flats?
Member Since July 2018 - Comments: 44
11:07 AM, 5th April 2022, About 4 years ago
Unlike residential transactions, most market evidence of retail/commercial leasing is held on subscription websites, or in the databases of commercial property agents. Additionally, the method of calculation, or analysis of rents is much more complicated than a mere rate per sq.m. It includes analysis of the lease terms, the frontage and depth of the space, the position in the street and the condition of the property.
You would be advised to consult a commercial agent/Chartered Surveyor for a rental valuation.
Member Since January 2018 - Comments: 42
11:12 AM, 5th April 2022, About 4 years ago
To get a ball park figure I go to business rates as they ask for rental information to set them
Member Since March 2021 - Comments: 16
2:19 PM, 5th April 2022, About 4 years ago
Yes, as Chris says. You can look up rateable value on local authority website. Compare different features and advertised rentals advertised. Most will give rate per square ft.
Member Since July 2018 - Comments: 44
10:27 AM, 6th April 2022, About 4 years ago
Agreed that the business rates section of the Valuation Office website gives an analysis of the floor areas and rates per metre to get to the rateable value (RV) and RV is based on rental value evidence.
The information is helpful, particularly when comparing with other shop rent analysis.
However the rates in that information are based on rental values in April 2015, not 2022.
Member Since July 2013 - Comments: 754
12:49 PM, 6th April 2022, About 4 years ago
Retail rents in decent locations are usually calculated in a different way from most other rents, as they are calculated by reference to “zone A“ (ZA), which is a specific formula, and is derived from the property dimensions and configuration – a narrow shop comprising xxx sq ft/m2 would likely attract a lower overall rent than the same sized one which has a wider frontage.
Further, comparable transactions are held in various commercial databases which usually require an annual subscription and are not on a PAYG basis. Your best bet to obtain the relevant information and advice is to contact a commercial property Chartered Surveyor who will be able to calculate the ZA of your unit and assist in analysing comparables on a like-for like basis, adjusting as necessary for market conditions (post Covid marketplace) and other appropriate lease terms etc for you.