Glossary

A method of analysing investment opportunities in which annual cash flows are discounted and accumulated to arrive at their Present Value (PV). Also used as a basis in certain types of property valuations.

Short or long term borrowings. An obligation to pay.

Failure to perform a duty or to discharge an obligation, particularly where a lessee fails to comply with any obligation imposed by the lease or where a mortgagee fails to pay interest or principal on a mortgage.

An income, which is paid after a laps of time.

The area held under the terms of a lease.

A large purpose-built tenancy designed to provide a broad range of merchandise sold from separate departments. Customers generally pay for goods at cash desk located throughout the store.

A non-current asset having a limited useful life.

A valuation method where the value of an asset is determined by reference to the new cost (replacement or reproduction cost including fees) of the asset less depreciation for physical, functional, technological and economic obsolescence.

In accounting terms, the writing down of the original cost of an asset systematically over the life of that asset. An effect caused by physical deterioration, or obsolescence, or both;

1. Accrued: the difference between the original cost of the asset and the written down value;
2. Book: the amount reserved upon the books of an owner to provide for the retirement or replacement of an asset, as distinguished from Accrued Depreciation;
3. Straight Line Depreciation: the provision each year of a fixed proportion of the original cost of the asset;
4. Diminishing Value Depreciation: the provision by annual instalment of a diminishing amount computed by taking a fixed percentage of the book value of the asset as reduced by previous provisions.

In valuation terms, the writing down of the current cost of an asset to calculate its current value. The accumulated effect on the value of an asset due to physical, functional, technological and economic obsolescence.

A decision set down by an appointed independent valuer in which a disputed rent is decided, in circumstances where a lessor and lessee have been unable to negotiate an agreement, or deciding on a rent amount previously in dispute between valuers for the landlord and tenant or by a third party.

An individual or company which transforms raw land to improved property.

Profit calculated as a percentage of the total cost of development before income provisions.

The cost to create a project including direct costs of labour and materials, contractor’s overhead and profit, plus indirect costs such as taxes and development loan interest.

Recoverable costs.

A schedule of information, as required under retail lease legislation that must be provided by a lessor prior to the new lessee’s lease or assignment to lease.

A reduction in a payment and includes reduction of future payments to present worth.

A large purpose-built store with a department store layout, with an emphasis on self-service by the customer. Goods are paid for at a bank of checkouts at the store exit/entrance.

The interest rate used to discount future cash flows to determine Present Value. Sometimes determined with reference to 10-year bond and risk margin.

Payments of income to unit holders or beneficiaries of the fund/trust. Distributions are usually quarterly, however, for some funds they may be six-monthly or annually.

Any loss sustained by a dispossessed owner that flows from compulsory acquisition.

An investigation of the legal, financial and physical nature and characteristics, including the entitlements and liabilities attaching to and arising from a real estate asset or assets, usually for acquisition or compliance purposes.