Glossary

A minimum rental provision in leases, which protects the lessor from a drop in rental below an agreed lower limit in the event of a reduced market value or CPI. Has effect during rent reviews. (Also known as Underpinning Clause)

Levies by Local and State Government instrumentalities, (e.g. water, etc.)

Physical land and those human-made items which attach to the land. It is the physical, tangible ‘thing’ which can be seen and touched, together with all additions on, above or below the ground. Local laws within each State prescribe the basis for distinguishing real estate for personal property or personalty. Although these concepts are not recognised in all States, they are adopted here to distinguish important terms and concepts.

The upgrading of a building’s fabric and services with the aim of enhancing its ability to attract tenants, improve rental growth and maximise market value.

A shopping centre typically incorporating one full line department store, a full line discount department store, one or more supermarkets and around 100 or more specialty shops. Total Gross Lettable Area Retail (GLAR) typically ranges between 30,000 and 50,000 square metres.

Real Estate Institute of Australia.

A payment made periodically by a lessee to a lessor for the use of premises. (May be effective, gross, face, market, etc.)

A periodic review of rental under a lease using a predetermined method. For example, increase in line with Consumer Price Index (CPI), or in accordance with a market valuation.

A list of details shown in a lease or sales document which includes the lessor, lessee, description of premises, lease term, etc.

A valuation report by an independent valuer fixing a rent, in circumstances where a lessor and lessee have been unable to negotiate an agreement.

The estimated cost at the date of valuation to replace or build the existing improvements to provide the same standard of utility and appointments, using the most comparable modern materials and construction methods.

An undertaking to adhere to a specified restriction on the use of real property or (loosely) the restriction itself.

The sale of goods or materials, in any quantity or manner, other than by wholesale.

One of many ratios used to measure profitability where the return on each dollar invested by the owner is measured.

A deferred interest in property. Often used where property is subject to life tenancies, ground leases, etc.

The percentage return on today’s price or value that will be derived when the current market rent becomes payable. This yield relates the future growth in net income to the historic cost or value of the asset and it is normally quoted together with the date from which it will apply.

Rights possessed by the owner or occupier of land on the banks of a stream, river or lake, to use the water there for certain purposes such as fishing and irrigation.

The uncertainty that an investment will generate the expected rate of return. The most commonly expressed measure of risk (or volatility) is the standard deviation which is a statistical measure of dispersion around the mean.