Market rent at review is determined by applying the lease’s valuation assumptions to the property and analysing relevant market evidence.
Different property types
Retail property may be analysed using zoning and ITZA methodology. Offices and industrial properties are commonly compared on overall floor-area rates, subject to adjustments. Specialist property can require a different approach.
The hypothetical letting
The property is not necessarily valued exactly as physically occupied. The lease may require assumptions about condition, term, use or other matters and may require particular circumstances to be disregarded.
Rental evidence
The valuer analyses comparable transactions and reconciles them to the subject property. This is a matter of professional judgement rather than a mechanical averaging exercise.