Commercial Property Yield Calculator
Calculate passing yield, Net Initial Yield (NIY), equivalent yield, and net profit on UK office, retail, and industrial investments for 2024/25.
Commercial Property Yield Calculator
Office, Retail, Industrial — passing yield, NIY and net profit 2024/25
Solicitor, survey, agent — typical £3,000–£10,000
Expected void between tenants — commercial voids can be 12–24 months
Typical 7–10% for commercial property management
Finance
Commercial lenders typically require 25–40% deposit
Commercial property investment tips
- Long void periods: Commercial leases run for 5–25 years but voids between tenants can be 12–24 months — always model a void allowance.
- No additional SDLT surcharge: Unlike residential property, commercial purchases are not subject to the 3% additional dwellings surcharge.
- FRI leases and dilapidations: FRI leases transfer repair obligations to the tenant, but landlords should be aware of dilapidations liability at lease expiry — budget for a schedule of condition.
- Business rates: The buyer becomes liable for business rates from completion. During void periods, empty property relief applies for 3 months (6 months for industrial), after which full rates become payable.
- Commercial mortgage requirements: Lenders typically require 25–40% deposit and personal guarantees. Interest-only terms are common; ensure rent cover ratio exceeds 1.5× mortgage interest.
Typical commercial yields by sector (UK 2024)
| Sector | Prime NIY | Secondary NIY |
|---|---|---|
| City of London offices | 4.5–5.5% | 7–9% |
| Regional offices | 6–7% | 8–12% |
| Prime high street retail | 5–6.5% | 9–15% |
| Industrial / logistics | 4–5% | 6–8% |
| Mixed use | 5–7% | 8–12% |
Note: VAT — landlords can opt to tax commercial property, making rent subject to 20% VAT. Seek professional advice before opting to tax.