Glossary

A measure of indebtedness; i.e. the extent of borrowings as against the equity held by a person or company in an asset. Usually expressed as a ratio. Positive gearing refers to the magnification of financial gain resulting from borrowing when the cost of capital (borrowed) exceeds the return on capital and leads to magnification of returns to equity. Negative gearing refers to the same relationships but where the cost of capital exceeds the return on capital.

A continuous business. Typically where the owner of the real estate is the operator of the business, the title of all interests is transferred with the land and the value of the property comprises the real estate, the business goodwill and the furniture, fittings and plant and equipment used in the operation of the business. With farms and hotels this is often described as walk-in-walk-out.

An intangible, saleable asset arising from the reputation of a business and its relationship with its customers.

The annual income producing capacity of real estate before deduction of outgoings.

Total square metres of floor space within a building envelope.

Gross potential rent less vacancies and credit losses.

Used for calculating tenancy area in warehouses, industrial buildings, free standing supermarkets, and showrooms.

The rental reserved/derived where all operating costs of the property (excluding cleaning and energy) are included in the rental.

The sum total in dollars for all sales and goods that the retailer makes during a specific period, usually in a financial year. Normally used for the purpose of percentage rent calculations.

A lease which gives the right of use and occupancy of land; e.g. a railway or Crown Lease normally on the condition that the lessee erect buildings of a certain nature and standard.

The net rent paid for the right of use and occupancy of a parcel of unimproved land, or that portion of the total rental paid that is considered to represent return upon the land only.

The expected annual rate of change in income and/or outgoings over a given forecast period. Income growth rates should reflect the expectation of market rent movements. The outgoings growth rates should reflect inflation or anticipated increases.

A pledge or promise to accept responsibility for the payment of a debt or the performance or discharge of an obligation of another often provided as security in a contract.