Commercial Property Calculator
UK commercial
Net initial yield, empty rates on a void, and the valuation your income actually supports.
The purchase and the lease
England and Northern Ireland stamp duty. Scotland and Wales run separate non-residential schedules.
What the tenant pays now, not the asking rent.
The same rent is worth materially less on IRI. It is the first thing to check in the lease and it is not in the particulars.
Landlord costs
Repair and insurance are charged only on an IRI lease.
The void, and the bill it brings
A residential void costs you the rent. A commercial void costs you the rent and the rates.
Net initial yield
6.89%
Net operating income ÷ total cash in
Non-residential SDLT
£9,500
England & NI schedule
The income
Rent collected£30,000
Landlord costs− £1,500
Empty rates while vacant− £0
Net operating income£28,500
Total cash in£413,500
What the income is worth
£407,143
at a 7% yield. That is £6,357 below your total cash in — the income does not support what you are paying.
This does not model VAT and the option to tax, security of tenure under the 1954 Act, rent reviews, the tenant’s covenant strength, dilapidations, or commercial borrowing — which runs at lower loan-to-value and shorter terms than residential, with interest-cover covenants. Those decide whether a deal that looks good here is one.
What the building is worth
value = net operating income ÷ market yield
A commercial investment is priced on its income, not against comparable sales. So a rent rise is a capital gain — and so is a fall in the yield buyers require, with no change to the rent at all.