Hi Everyone,
We've been approached about leasing a bare portion of our commercial land for a removable show home to be housed on for a 6 year term.
While I can happily calculate the lease rate for the other permanent buildings on the site, I'm not up to speed on methods to calculate the ground lease.
The majority of advice I've received from colleagues, is to simply use a fair rate of return on the value of the property they occupy. So based on advice, 7%-10% annually of the market value of the land occupied, with the tenant responsible for opex.
Thoughts most appreciated.
We've been approached about leasing a bare portion of our commercial land for a removable show home to be housed on for a 6 year term.
While I can happily calculate the lease rate for the other permanent buildings on the site, I'm not up to speed on methods to calculate the ground lease.
The majority of advice I've received from colleagues, is to simply use a fair rate of return on the value of the property they occupy. So based on advice, 7%-10% annually of the market value of the land occupied, with the tenant responsible for opex.
Thoughts most appreciated.
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