What is passing income?

[fudosan]

I just came across the following listing.

* Freehold Strata with a net lettable area of 508sqm
* Net passing income of $452,100pa
* Sony concept store since 1998
* Superb position on Broadway, close to Westfield 277

What is passing income? I could not find any explanation on the Internet. Thanks.

[Mr_bond]

Passing income = Contract income = Actual money coming in

Will be an interesting one to watch!

[fudosan]

Thanks Mr. Bond. So passing income is rental income (in average Joe's speak)?

This is different from holding income which I understand is income that will be gone because the tenant will leave soon.

[Mr_bond]

Pretty much.

Holding income usually refers to income that you get while holding the assett for another purpose. ie rental income from a house which you are planning on developing into shops.

I've also seen it used a fair bit where they have a 'temporary' tenant paying below market rental while they wait for a better tenant to come along.

[fudosan]

Thanks. From time to time I see commercial property being sold with tenancy expiring in few months, so the income is indicated as holding income.

[Davo36]

I just came across the following listing.

Quote:
* Freehold Strata with a net lettable area of 508sqm
* Net passing income of $452,100pa
* Sony concept store since 1998
* Superb position on Broadway, close to Westfield 277

What is passing income? I could not find any explanation on the Internet. Thanks.

Bloody hell, $889 per square metre.

That's a lot of mula to pay before you make any profit!

[spurner]

You can add rates and OPEX onto that too!

Bloody hell, $889 per square metre.

That's a lot of mula to pay before you make any profit!

[Davo36]

Yes and wages and so on as well. You'd have to be selling a lot of DVD players wouldn't you?

Sometimes I'm glad I'm a landlord, I mean how would you make a business like that work? But then I guess Sony do alright don't they...

[kyotolaw]

Not only that - I believe that Sony don't sell products at their concept stores. (This was the case in Japan in any case.) Its a pure branding exercise only...