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| Abatement | An option available for tenants facing critical hardship who require assistance from the lessor to reduce their rent for a short period of time.
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| Amortisation | The gradual reduction of a debt, usually through instalment payments.
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| Anchor tenant | A major tenant that will draw the majority of customer to a retail centre. These tenants are usually strategically placed within the centre to create and maximise foot traffic between each, allowing other tenants the opportunity to attract customers they may not normally see, had it not been for the anchor tenant.
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| Appraisal / valuation | An opinion or estimate of the value of a property, calculated by a certified or accredited appraiser. Three methods of appraisal are common:
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| 1. | The cost approach, based on the estimated value of the land plus the estimated cost of replacing the improvement on it, less depreciation |
| 2. | The income approach, based on the net operating income of the property |
| 3. | The market approach, based on a comparison to similar properties in the market that have been sold recently. |
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| Base rent | The minimum rent as specified in the lease.
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| Capital yield | The increase in value over the investment in the building.
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| Capitalisation | The process employed to estimate the value of a property by the use of a property investment rate of return and the annual net operating income produced by the property.
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| Capitalisation rate | A rate of return used to estimate a property’s value based on that property’s net operating income. This rate is based on rates of return prevalent in the marketplace. The capitalisation rate represents the net operating income divided by the price of property at acquisition.
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| Fair market value | The price paid, or one that might be anticipated as necessarily payable, by a willing and informed buyer to a willing and informed seller.
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| GLA | Gross Lettable Area - the total area of a centre that is required to be covered by a lease.
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| Gross occupancy cost | Reflects all occupancy costs (including management costs, property taxes and basic ongoing building maintenance) and, therefore, corresponds to 'gross' rents. Used to determine average cost per square metre.
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| Gross possible rental income | The sum of the rental rate of all spaces available to be rented in a property, regardless of occupancy expenses. The maximum amount of rental a property can produce.
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| Income yield | The net return to owner divided by the sum of the opening valuation and capital expenditure item based on the month in which spent.
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| MAT | Moving Annual Turnover - the annual sales of a retail tenant or a group of tenants or centre based on rolling 12 month basis, which offers a fair indication of retail performance over the given period.
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| Management Agreement | An agreement between the property owner and the designated managing agent describing and establishing the authority of the agent and detailing the rights, responsibilities and obligations of both agent and owner(s).
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| NLA | Net Lettable Area - the usable area within a building measured from internal wall face. Area used for rental charging.
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| Occupancy costs | A percentage figure derived from dividing a tenant’s gross annual sales by their gross rental figure. This indicates what proportion the rent is to sales. All sales categories have varied acceptable occupancy cost levels. This figure can assist in identifying a healthy or unhealthy business, and is used as a comparison within sales categories throughout a portfolio.
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| Outgoings | Additional charges to base rent to cover the operating costs of a centre (e.g. operating expenses, air conditioning expenses, marketing levy, water levy etc.).
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