Licensed Valuers & Property Valuation Consultants, Perth, Western Australia
Independent licensed valuers & Property valuation consultants
Established 1984 | Expert Valuation Advice | Licensed Valuers

A B C D E F G H I  L M N O P R S T U V Z

Adverse Possession
Obtaining legal rights to real estate by occupying it for a certain period and paying rates and taxes.

Airspace Rights/Air Rights
Rights granted by the owners of land to another party to permit use of the air space above the surface or a specified stratum of airspace of the owners’ land. Also potential floor space rights that exist particularly over a heritage property and which can be sold and transferred to another development.

The process of recovering, over a period of time, the capital investment through scheduled, systematic repayments at regular intervals. Periodic contributions to a sinking fund to discharge a debt or make a replacement at a future date.

Anchor Tenant(s)
The prime tenant(s), for example, a supermarket in a shopping centre, which is a main attraction to the centre.

Means ‘Annual Income’. It is used to refer to an arrangement under which periodic payments are made to a person in return for the investment of a lump sum, usually for the purpose of providing retirement income.

Australian Property Institute.

American term for valuation.

Increase in value due to many factors directly and indirectly impacting externally or internally on assets.

The determination of a dispute by one or more independent third parties rather than a court. Arbitrators are appointed by the parties in accordance with the terms of the arbitration agreement or in default by a court. The arbitration is conducted pursuant to the Arbitration Acts in each State and the award given by the arbitrator/s binds the parties.

A covered walkway or passageway usually connecting two streets, with retail shops along one or both sides.

The surface extent of a site, building, suburb, farm, or region, measured in square units, usually in square metres or hectares.

Australian Securities and Investment Commission.

Asset Allocation
The apportionment of an investment portfolio among different asset classes (shares, bonds, property, cash and overseas investments) from time to time in accordance with the investment outlook of the investor or investment manager.

Asset Management
A systematic approach to the procurement, maintenance, operation, rehabilitation and disposal of one or more assets which integrates the utilisation of assets and their performance with the business requirements of asset owners or users.

Asset Register
A record of items considered work of identification as discrete assets. An asset register includes information about each asset, such as type of construction, technical details, date of acquisition, original cost, accumulated depreciation, written down value, etc.

Australian Stock Exchange.

Australian Property Institute (API)
Australian professional body in the field of property and valuation. Formerly known as Australian Institute of Valuers and Land Economists (AIVLE), Australian Institute of Valuers and Land Administrators (AIVLA), Australian Institute of Valuers (AIV), and Commonwealth Institute of Valuers (CIV).

Bank Guarantee
A form of security provided by the contractor’s bank or financial institution that the contractor’s financial obligations under the contract will be met. It may be allowed as an alternative to retention a fund.

Base Rent
The minimum acceptable rent provided in a net lease. The commencing rent in a lease usually with the addition of a ‘percentage rent’ based on turnover.

The statistic against which performance is measured. Benchmark can be median, weighted average or another performance statistic.

The enhancement in value of real estate due to the implementation of a town planning scheme or a public work. An insurance term generally used to identify the potential improvement inherent in replacement assets following a loss. Such potential improvements are not usually allowed when assessing the insurable value of an asset either pre or post loss.

Another term for a lot or allotment of land.

Body Corporate
A term used in the Strata Titles Act to describe the body representing the building owners.

Building Approval
Approval from the relevant authority for construction.

Building Area (Gross)
The total enclosed and unenclosed area of the building at all building floor levels measured between the normal outside face of any enclosing walls, balustrades and supports. The unit of measurement for building areas is the square metre. (Refer to the Property Council’s Method of Measurement).

Building Code of Australia (BCA)
Sets minimum community standards for building in terms of health, safety and amenity in buildings for regulatory purposes.

Bulky Goods Centre
Large format retailer typically selling bulky goods, often located on main arterial highways, either free-standing or in combination with other larger format retailers. (Also known as Big Box in the United States).

Buyer’s Market
When prices are relatively low giving buyers an advantage in the market. (eg. oversupply of particular housing/office stock occurring).

The basic funds and assets used by individuals, governments and businesses to sustain and equip their income-earning activity. The value of investment in an asset of business less total liabilities.

Capital Cost
The cost associated with the acquisition of fixed assets, the accumulation of data or the gaining of intellectual rights. The strict definition of capital relates to the proprietorship or owner’s equity.

Capital Expenditure
Those items that are significant replacements or additions to existing properties or for new developments, as distinguished from cash outflows for expense items that are normally considered part of the current period’s operations. Capital expenditure does not include general maintenance and repair items.

Capital Gains
The amount by which the net proceeds from resale of a capital item exceed the book value of the asset. Refer to current calculations from the Australian Tax Office (ATO).

Capital Return
The changes in capital value between periods less any capital expenditures which may have occurred – it is expressed as a percentage of capital value plus a portion of capital expenditures less any partial sales and less a portion of net income.

Capital Value
The capital sum which a property unencumbered by any mortgage or other charge might in ordinary circumstances be expected to realise at the time of valuation if ordered for sale on reasonable terms and conditions.

In South Australia and Western Australia it means the capital amount that an unencumbered estate might reasonably be expected to realise upon sale subject to minor variations to improvements to the land.

The process of determining the yearly net income in terms of the amount of capital it would be necessary to invest in order to receive that income, calculated at a given rate of interest. It is the method of determining the value of a property by reference to net income and an expected percentage yield.

Capitalisation Rate
The rate at which Net Operating Income is discounted to determine the value of a property. It is one method that is utilised to estimate property value. The calculations are as follows:

Property value estimate = net operating income / capitalisation rate

Cash Flow
That financial flow which is being discounted, which may be:

  1. Net operating income and net proceeds from sale (before tax and before financial flows);
  2. Before tax and after finance (equity flows);
  3. After tax and after finance (true cash flow).

Catchment Area
The geographical area from which a shopping centre may draw its potential customers. They are usually divided into Primary (60%-65% of customers), Secondary (20%-30% of customers) and Tertiary (balance).

A notice on title proclaiming a possible interest other than that of an owner.

Central Business District (CBD)
The main shopping or business area of a town, city or metropolitan area.

Certificate of Title
A document issued by a title office under a Torrens System of Title, showing ownership and interest in a parcel of land.

Certified Development Practitioner

A Certified Development Practitioner is a person regularly involved in the development of property including from site selection, development strategies, feasibility studies, planning applications and construction of residential or commercial developments through to the ultimate purpose of the sale or lease of the land and/or buildings for profit.

Certified Practising Valuer
A licensed valuer who is an Associate or Fellow member of the Australian Property Institute (API) who has demonstrated professional property experience and has met the API’s standards and has complied with the API’s Continuing Professional Development requirements.

Certified Property Practitioner

A Certified Property Practitioner is a person involved in the property fields of sales, leasing and negotiation, research, education, law, consultancy, finance corporate real estate and government owned or controlled assets.

Chain Store
One of a number of retail stores under the same management or franchise. Often using the same retail format, product lines, layout and pricing regimes.

Any fixed asset other than freehold land. Items such as machinery, implements, tools, furnishings, fittings, which may be associated with land use, but which are not fixed to the land or premises or, if fixed, may be removed without causing any structural damage to the building. (Legally known as Personalty).

City Centre (Retail)
Retail complex within an arcade or mall development owned by one company, firm or person and promoted as an entity within a major central business district. Total Gross Lettable Area Retail (GLAR) exceeds 1,000 square metres.

Cluster Housing
A communal layout centred around vehicle and pedestrian access and play space divided into partly communal and partly private ownership.

Commencement Date
The date from which a lease takes effect.

Commercial Premises
A building or part of a building used as a business office or for other commercial or business purposes.

The fee or payment made to an agent for services rendered, such as the sale of a property, often calculated with reference to the value of property.

Common Areas
For lease purposes, the areas of a building and its site that are available for non-exclusive use of all its tenants; e.g. lobbies, corridors, parking lots, etc.

A sum paid to an asset owner or lessee in exchange for an interest in the asset, (e.g. compulsory acquisition).

Where real property conforms to statutory requirements.

Compound Interest
Where interest is calculated on a sum that includes previous interest payments.

Compulsory Acquisition
Where an asset is acquired by a statutory authority through legislation.

Consequential Loss
An unintended loss which arises from the initial action or change of circumstances. Insurance term relating to loss of profits as a result of business interruption following the occurrence of an insured peril.

Payment in the form of money or other form of benefit in exchange for an agreed action (e.g. the receipt of goods and/or services).

Consumer Price Index (CPI)
A measure in percentage terms of the change in the costs of living, being the weighted average cost of a standard basket of retail goods and services expressed in relation to a base period.

Contaminated Site
The exposure of structures, equipment or land to substances or organisms detrimental to health. Includes sites identified by Environmental Protection Authority (EPA).

Contiguous Property
Adjoining property.

Allowances for unforeseen eventualities, generally as a percentage cost which reduces with progress through the phases of a project.

A legally binding agreement.

Convenience Centre
A smaller sized shopping centre or a group of shops meeting the primary retail needs of the immediate trade area. A small scale shopping centre that includes a supermarket, banking facilities, dry cleaning, a newsagent and take-away food.

Convenience Store
A shop selling primarily convenience goods. It may also be used to hire convenience goods, often operated in conjunction with a service station.

An instrument (i.e. document) which transfers property or a right in property from one person to another.

Council by-laws
Published rules and regulations for the administration and management of a local government area. It includes rules for land use and development, planning and building.

An agreement between two or more parties to adhere to certain terms, conditions or restrictions regarding property, often written into a deed or other legal instrument such as a Certificate of Title.

Crown Land
Land owned by State Government.

Current Assets
Cash or other assets of an entity that would in the ordinary course of operations of the entity be consumed or converted into cash within twelve months from the end of the last reporting period of the entity.

Current Liabilities
Liabilities that would in the ordinary course of business are due or payable within twelve months.

DCF (Discounted Cash Flow)
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.

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

Demised Premises
The area held under the terms of a lease.

Department Store
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.

Depreciable Asset
A non-current asset having a limited useful life.

Depreciated Replacement Cost Approach
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.

Determination (Rental)
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.

Developers Profit/Risk Margin
Profit calculated as a percentage of the total cost of development before income provisions.

Development Cost
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.

Disclosure Statement
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.

Discount Department Store (DDS)
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.

Discount Rate
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.

Due Diligence
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.

A right to use the land of another. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property.

Earnings Before Interest and Tax.

Economic Life
The effective life of an asset which, due to economic reasons, will be less then the assumed physical life.

Effective Rate of Return
The actual rate of return obtained after adjusting for rental concessions or impending vacancies.

Where a building extends beyond its surveyed boundary.

A charge or liability on a property; for example, a mortgage or a special condition on the use to which it may be put (e.g. easements, restrictions and reservations).

Where a change (e.g. re-zoning) or some other external factor increased the value of an asset.

Environmental Audit
The review of environment management practices; in particular, the evaluation of a site for environmental liability.

Environmental Management
The use of procedures that minimise adverse environmental impact during construction and site operation.

Environmental Protection Authority.

The interest or value which an owner has in an asset over and above the debt against it.

A person who is recognised as having special knowledge or skills.

Face Rent
The rent shown on a lease document which may not include outgoings or the effect of incentives.

A complex of buildings, structures, roads and associated equipment, such as a hospital, school, shopping centre, manufacturing plant or the like, which represents a single management unit for financial, operational, maintenance or other purposes.

Facility Management (FM)
The purposes of planning, managing, maintaining, rationalising and accounting for facilities and associated services while simultaneously seeking to reduce the associated overall costs. The primary focus of facilities management is to provide the optimum level of facility for the least financial outlay.

Fair Market Rent
(See Market Rent)

Fair Market Value
(See Market Value)

Accommodation which offers guests the opportunity to observe or become involved in farm life on a rural property. This type of accommodation offers a wide variety of standards and services.

Feasibility Study
A financial analysis usually included in a report of a proposal to change or develop an asset. A project is ‘feasible’ when analysis indicates that there is a reasonable likelihood of satisfying explicit objectives and when a selected course of action is tested for fit to a context of specific constraints and limited resources.

Fee Simple
The fullest and highest possible interest one can possess in real estate. Ownership of unlimited duration. Upon owner’s death, real estate will pass to their heirs.

Financial Institution
Deposit taking institutions including all approved deposit funds, superannuation funds, mutual funds, insurance companies and the investment operations of banks (except in the case of mortgagees).

Fiscal Year
The accounting year used by specific companies. Usually the twelve months to June 30.

Installed items that may be removed from real estate without causing irreparable damage to the land, structure or use of the premises.

Fixed Assets
Non-current assets intended for use on a continuing basis in the operations of an entity. Fixed assets include tangible assets (such as property, plant and equipment), intangible assets (such as goodwill, licences and contracts) and financial assets. The term is something of a misnomer as it includes ships, aeroplanes, locomotives, rolling stock and motor vehicles as well as land, buildings, plant and machinery.

Appurtenances affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property housing, supporting or pertinent to them.

Floor Area
Generally means the useable floor space of a building. Can be defined in a number of different ways depending upon the type of building.

Forced Sale Value
Value of an asset, assuming the vendor is obliged to sell without reservation. Defined by the IVSC as ‘the amount which may reasonably be received from the sale of (an asset) within a time frame too short to meet the marketing time frame of the market value definition’.

Foreign Investor
Investors, public or private, whose centre of operations or residence is outside Australia.

An arrangement between franchisor and franchisee through which the franchisee uses the company name of the franchisor and is provided specific business services in exchange for a franchise fee. The fee is usually an initial purchase requirement plus an ongoing percentage of gross sales of the business.

The highest form of interest in land, and the nearest the law allows a real property owner to approach property ownership. A freehold estate is one which is of unlimited duration, that is to say, it cannot be said of an estate of freehold at the time of its creation when it will come to an end.

Refers to the boundary of a lot that abuts a roadway.

Moveable articles, such as tables, chairs, desks, beds, cabinets, wardrobes, etc. required for functional or ornamental purposes in buildings.

Future Value
The value of an asset at a specified date in the future. The value of an asset today is the Present Value of its future value discounted at an appropriate rate.

Gearing (Leverage)
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.

Going Concern
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.

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

Gross Building Area (GBA)
Total square metres of floor space within a building envelope.

Gross Effective Rent
Gross potential rent less vacancies and credit losses.

Gross Lettable Area (GLA)
Used for calculating tenancy area in warehouses, industrial buildings, free standing supermarkets, and showrooms.

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

Gross Sales
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.

Ground Lease
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.

Ground Rent
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.

Growth Rate
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.

Hard Stand Area
Paved, open area adjacent to an industrial premises (normally on the same site), used to store material, equipment, products or containers. The hard stand area is distinct from any driveway, parking space or lading bay.

Head Lease
A lease between the freeholder of land and buildings and the main lease holder, who may not be the occupier.

High Rise
A building normally defined in excess of three storeys.

Highest and Best Use
The permissible property use that at a given point of time is deemed likely to produce the greatest net return in the foreseeable future, whether or not such use is the current use of the property.

Highest And Best Use
The most likely use of an asset which is physically possible, appropriately justified, legally permissible, financially flexible and which results in the highest value of the asset being valued.

Historical Cost
The actual cost or first cost of an asset at the time it was originally constructed.

Holding Costs
Often used to refer to a property awaiting further development. Expenses, charges or costs which are met in order to keep real property from year to year, including both fixed charges and variables such as taxes. (Also known as Carrying Charges).

Holding Period
The time period for which an asset is held by an investor.

Hypothetical Development
A method of feasibility analysis in which the development of land is envisaged in a hypothetical exercise and all the estimated costs of the proposed development are taken into consideration. The probable net returns from the development are then calculated as a test for its economic viability.

Works undertaken on a site (usually buildings) which enhance its value.

Buildings or alterations (e.g. dams) to land. Improvements may be to the land (such as drains, levelling, clearing, removal of stone), or on the land (such as buildings and fences).

The discount or contribution offered to a lessee at commencement of the lease and may be applied at the start, or during or at the end of the lease term and is outside the lease terms. May include cash contribution, fit-out benefits or rent free periods.

Income Capitalisation Value
The indication of value derived for an income-producing property by converting its anticipated benefits (cash flows and reversion) into property value in one of two ways; direct capitalisation of expected income or discounting the annual cash flows for the holding period at a specified yield rate.

A form of contract arising where a person undertakes to compensate another for loss he may suffer as a result of a transaction with a third party.

A passive portfolio management technique in which the fund manager seeks to match the composition, and therefore performance, of a market index such as the Australian Stock Exchange (ASX), Listed Property Trust Index or the ASX All Ordinaries Index.

Industrial Property
Improved real estate used for the purpose of manufacturing, processing or warehousing goods.

Initial Yield
The initial yield is the percentage return on price or value derived from current net passing income. This is merely a statement of the ratio between the initial income and price or capital value, expressed as a percentage. No allowance is made for any future rent growth.

Injurious Affection
Loss or damage of non-physical nature to land remaining with a dispossessed owner after a partial compulsory acquisition. Excludes any sentimental value.

A verbal or written advice to undertake professional services.

The return earned on funds that have been loaned or invested.

Interest In Land
A legal right to enjoy land whether wholly or in part.

Interest Rate
The percentage of a sum of money charged for its use.

A detailed list of stock held in a store or department.

IRR (Internal Rate of Return)
The discount rate that equates the Present Value of expected future cash flows to the cost of the investment outlay. A measure of investment yield.

Land Economist
A practitioner of property economy, the study of and administration of all land and property matters.

Land Tax
A tax payable annually in respect of the beneficial ownership of land, the rate of which is determined by the assessed valuation. Usually based on unimproved value of land.

A contract whereby possession and use of land or property is transferred for a limited period in return for rent and under certain specified conditions.

Possession and use of a property by virtue of a lease.

Leasehold Value
The value of the lessee’s interest. Where the rent paid is lower than the market rent, the capital value of the lessee’s interest is the Present Value of the profit rent for the unexpired lease term or until the next rent review.

Leasing Incentives
Inducements offered by landlords to attract tenants to lease space. Typically occurs when supply exceeds demand but in order to maintain value by not lowering face rent or contract rent, tenants are given incentives such as rent free periods, cars and other gifts. Often such inducements are secret. The discount or contribution offered to the lessee at the commencement of a lease which may be applied at the start, during, or at the end of the lease term and is outside the lease terms. The incentive may include cash contribution, a tenancy fit-out or a rent free period.

Lessee (Tenant)
A person/legal entity who receives the right to occupy and use a property under the terms of a lease.

Lessor (Landlord)
The owner of a property who transfers the right to occupy and use property to another by way of a lease agreement.

The ability of an investment to be easily converted into cash with little or no loss of capital and minimum delay.

A term commonly used by agents for obtaining an instruction to sell or lease real estate.

Loan To Value Ratio
The ratio of the whole loan principal dollar amount divided by the property’s appraised value amount.

Local Government Act
Essentially governs the activities of local government and relevantly gives the councils power to require activity approvals (e.g. for erection or demolition of a building).

A characteristic of land referring to linkage and exposure relationships with other sites and their uses. (See Linkages and Exposure)


  1. A part (consisting of one or more pieces) of any land (except a road, a reserve or common property) shown on a plan, which can be disposed of separately. Includes a unit or accessory unit on a registered plan of strata subdivision and a lot or accessory lot on a registered cluster of Community Title Plan,
  2. An item for sale in an auction.

All actions necessary to keep an item or asset in operational condition.

Major Regional Centre
A major shopping centre typically incorporating at least one full line department store, one or more full line discount department stores, one or more supermarkets and around 150 specialty shops. Total Gross Lettable Area Retail (GLAR) generally ranges between 50,000 and 85,000 square metres.

Make Good
The obligation of a lessee at the end of occupation to ensure that premises are returned in the same condition as at the commencement of the lease; for example painting, partitions, etc.

Market Comparison Approach
A method of valuation whereby the evidence derived from the analysis of sales or leasing of similar assets is used to demonstrate value.

Market Price
The price actually paid, or agreed in a contract to be paid, for an asset. It differs from market value in that it relates to an accomplished fact, whereas market value is and remains an estimate until proved. Market price may involve circumstances not normally included in market value.

Market Rent
The likely market rent that an asset could command on the open market as indicated by current rents being paid for comparable assets. Can also be known as open market rent or fair market rent. Were rent control legislation exists, fair rent may be determined arbitrarily by reference to specified limitations on returns, etc. (See Market Rental Value)

Market Rental Value
The estimated amount for which an asset should rent, as at the relevant date, between a willing lessor and a willing lessee in an arm’s length transaction, wherein the parties had each acted knowledgably, prudently and without compulsion, and having regard to the usual terms and conditions for leases of similar assets.

Market Review
A review of rental levels under the terms of the lease (often periodic) with reference to prevailing market rents. Market review varies from lease to lease due to the specifics in the lease which state what factors are to be incorporated into the market review.

Market Value
Market value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after property marketing, wherein the parties had each acted knowledgably, prudently and without compulsion.

Mechanical Services
All those services in buildings that involve motors, machines, or the flow of heated or cooled fluids, usually in conjunction with electrical or electromechanical controls. The terms ‘building services’ and ‘mechanical services’ overlap to some extent.

The middle number when data is arranged from the lowest to the highest. If there are two median scores, they are averaged to provide the true median. The median is also known as the 50th percentile.

The process by which a third party assists two disputing parties to reach a mutually agreeable solution. A recommendation made by the mediator is not necessarily binding on the parties.


  1. An intermediate floor within a room;
  2. A low storey between two other storeys of greater height; also called ‘entresol’; or
  3. A partial story between the ground floor and first floor of a building.

Monthly Tenancy
A lease of property from month to month and determinable on a month’s notice. Often arises after a longer lease expires.

Documentation of a property loan. The conveyance or transfer of real or personal property of the person conveying as security for payment of a debt or performance of an obligation.

Financier who lends money against property as security.

Mortgage Sale
Sale of a property where in the case of a default of payments by the mortgagor, the mortgagee can sell the property over which the mortgage has been held.

One who owns an interest in real estate and who executes a mortgage on that interest as security for a loan or for the advantages of credit.

Naming Rights
The exclusive right given to the lessee to naming the building, in association with their occupancy of the premises.

Native Title
A legally enforceable aboriginal entitlement to continue using the land in the same way it has been used prior to settlement, where that right has not been extinguished by government granting a title to the land to a third party prior to Racial Discrimination Act 1975.

Neighbourhood Centre
A local shopping centre comprising a supermarket and up to approximately 35 specialty shops. Total Gross Lettable Area Retail (GLAR) will typically be less than 10,000 square metres.

Net Income
At a property level, gross income less total outgoings on an accrual basis. The Property Council’s ‘Chart of Accounts’ is recognised within the property industry as the main guideline for determining which items are allocated as income and expenses as opposed to capital expenditure.

Net Lettable Area (NLA)
Used to refer to tenancy areas in office buildings, and office and building parks. Can apply to whole or part of building.

Net Rent
The rent to the owner free of all outgoings (i.e. gross rent less outgoings).

Net Sale Proceeds
Sale price less transaction costs.

Net Tangible Asset (NTA)
The total assets of the fund including physical property, cash, receivables less liabilities, intangibles such as the goodwill of the fund, expressed as a ratio with the units on issue.

NPV (Net Present Value)
The aggregate Present Value of the projected cash flows less the opening amount. The capital amount equivalent to the sum of the periodic net cash flows discounted by the required rate of return. That is, the capital sum a hypothetical purchaser would be willing to pay for an expected net income stream that would provide that purchaser his/her required return. The Net Present Value is calculated as the sum of the Present Values of all periodic cash flows excluding any ‘opening value’ or ‘initial purchase price’, using a constant discount rate to find the Present Value of each periodic cash flow.

Occupancy Cost
The total of cost incurred by a tenant to provide space for operations. It includes net rent, operating costs (outgoings), capital costs, taxes, insurance and depreciation allowances.

Occupancy Rate
Represents occupancy expressed as a percentage of total capacity available during a survey period; e.g. for the period providing that, for establishments closing (other than for seasonal reasons) or opening during the survey period, the denominator of the expression below includes only operating periods.
Calculation for room occupancy rate (%) = room nights occupied ÷ [(guest rooms) x (no. of days in the period)] x 100.

Total annual costs involved with owning or operating real estate, e.g. rates, insurance, cleaning, agent fees, etc. (Income tax is not an outgoing).

In relation to land, the owner includes every person who jointly or severally whether at law or in equity:

1. is entitled to the land for an estate of freehold in possession, or

2. is entitled to receive rent or profits thereof, whether as beneficial owner, trustee, mortgagee in possession or otherwise.

Parking Ratio
In local authority development control rules, this is a ratio of the number of car parking spaces required to be provided for any development per unit of built up space; i.e. per square metres of built up area, per number of apartments/per number of hotel rooms/per square metres of site area.

Party Wall
The wall between two adjoining buildings or occupancies which provides common structural support and (fire) separation.

Passing Rent
The current rental being paid by the lessee as specified by the terms of the lease.

Passing Yield
The yield based on rent being paid at date of calculation. (See Initial Yield)

Plot Ratio
A measure of the intensity of the permissible use of a piece of land. It is the ratio between the total permissible floor area of a building and the area of the site of that building. If a planning scheme provides that the maximum plot ratio is 10 that means that the total floor space of the building must not be more than 10 times the area of the site of that building.

Practical Completion
The stage reached when a project has been essentially completed and is fit for its intended purpose, except for minor omissions and defects that do not prevent its use, and with tests required under the contract having been carried out. Practical completion is market by the issue to the contractor of a certificate of practical completion by the superintendent (usually architect).

A house, building or other structure together with the surrounding grounds that form part of the title. Also, the real estate forming the subject of a conveyance or license.

Present Value (PV)
Current value of future amounts or the value today of a future payment, or stream of payments, discounted at the appropriate discounted rate.

A term used in most Australian contracts in lieu of ‘client’ or ‘proprietor’. The party for whom the contractor is legally bound to construct the works.

Private Investors
Private individuals/investors who are private individuals, partnership and/or syndicates which invest in property and are not primarily involved in property development.

Pro Forma Report
A report whose structure is set (previously), a standard report form.

Professional Indemnity
A form of insurance against negligence or defalcation by a professional adviser.

Profit Rent
The difference between the market rent and the current rent or ground rent resulting in a leasehold interest.

Progress Certificate
A certificate issued by the superintendent to the principal and the contractor, indicating the percentage or agreed stage of progress in a works project, against which the principal makes payment to the contractor.

Project Management Contract
A contract for the total management of a construction project by an independent person or organisation which is responsible for all aspects of design, documentation, contractual arrangements, inspections and certification of work for payment and of completion on behalf of the proprietor.

At law, property consists of the private rights of ownership. To distinguish between real estate (realty), a physical entity, and its ownership, a legal concept, ownership of land is known as real property. Physical items other than real estate are legally termed ‘personalty’ and their ownership is known as ‘personal property’. The word ‘property’ is used without further qualification or identification may relate to real estate, personalty or a combination. Colloquially, property is anything that can be owned or in which an interest can be held, over which control can be exercised, which can be traded or left in an estate or from which current or future rights to receive benefits can be held. Property can include, but is not limited to, real estate and associated interests therein, personalty, intellectual property, rights, licences and options, plant and machinery, art and jewellery, goodwill and shares.

Public (Open) Space
Parks, recreation reserves, sports grounds and the like available for use by the public generally are public spaces.

Ratchet Clause
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.)

Real Estate
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.

Regional Centre
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.)

Rent Review
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.

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

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

Replacement Cost
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.

Restrictive Covenant
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.

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

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

Reversionary Yield
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.

Riparian Rights
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.

Sale And Leaseback
A transaction whereby an existing owner sells an asset to another who then leases it back to the original owner on pre-determined terms and conditions for the mutual advantage of each party.

Second Mortgage
A mortgage or charge on real property ranking after a prior mortgage or charge; i.e. after a first mortgage.

The minimum distance a structure must be moved back from the street or boundary line in accordance with local planning or building regulations.

Showroom/Warehouse Centre
A collection of outlets typically including bulky goods retailers (furniture, white goods and other homewares), and non-retail uses (e.g. automotive and trades-people outlets).

Sinking Fund
An account set up with regular payments made over period of time for the purpose of paying for future maintenance and repairs of a capital nature (e.g. the fund established by a body corporate for the collection of strata monies for capital expenditure within the unit block).

A parcel of land which is undeveloped or underdeveloped.

Site Cover
The maximum amount of a site that can be covered by a building, usually expressed as a percentage.

Special Value To The Owner
A value amount above market value that reflects the particular value an asset has to the owner and the use to which the owner can or does put it to. Excludes any sentimental value.

Specialty Store
A retail shop in a centre that specialises in a defined narrow range of merchandise with an emphasis on product knowledge and customer service. Shops may range up to 400 square metres but are typically 60-120 square metres.

Stamp Duty
The duty or tax payable on a real estate transaction or lease registration which is calculated on a scale.

Strata Plan
The registered plan of a strata title property showing the boundaries of lots and unit entitlements. Pursuant to legislation on strata or unit titles.

Strata Title
The formal ownership of property held within a strata plan where property is defined within horizontal and vertical boundaries.

Division by a land owner, of all or part of a parcel of land, into separate allotments (or sections), each with a separate title, in accordance with a ‘plan of subdivision’ approved by the planning authority.

A contract whereby the whole or part of the property is let to another person, the party letting being themselves a lessee. The obligations of the lessee are not, however, diminished.

Summation Approach
Refers to the addition of the value of the parts of real estate to obtain the value of the whole (i.e. land and buildings). May refer only to a value prediction using the depreciated replacement cost approach.

A purpose-built tenancy specialising in tinned and packaged food, grocery lines and fresh produce. The emphasis is on self-service with a bank of checkouts for payment by customers.

A group of individuals who join together for the purpose of property development and/or investment, usually for a fixed period of time.

Tenancy In Common
Where two or more persons are entitled to property in such a manner that they have an undivided possession but several freeholds. No one party is entitled to the exclusive possession of any part of the land and the interest on land is transmitted by will, at the death of an individual.

Tenancy Schedule
A listing of each premise in a property including tenancy name, number, area, lease commencement and expiry dates, rental, rental review date and type, outgoings and rent review mechanism, etc.

A person paying rent in exchange for the occupancy of a building or dwelling.

The length of period of projection of detailed cash flows.

The form of ownership of real estate (i.e. Torrens, strata or company title).

Trade Practices Act.

The trustee oversees the flow of funds, collecting principal and interest from the servicer, distributing payments and reporting to those with an interest in the trust.

The gross takings of a business.

Turnover Rent
That amount of rental produced by a given percentage of the gross sales less the base rental. (Also known as Percentage Rent)

Under Construction
Buildings which are currently being developed. A building is deemed to be under construction when development proceeds beyond the laying of footings.

Unimproved Value
A statutory concept of value used mainly for rating and taxing purposes, which envisages the land as being in its virgin state but enjoying the benefits of all external factors which influence the value at a given date. Now obsolete. The value of the land as if all existing improvements thereupon, including site works, had never been build or made, but regarding all other lands as in their current circumstances, including all improvements, roads, services and amenities.

A single item; any standard of quantity by which other quantities of the same kind may be measured and expressed. A residential flat.

Areas of buildings available for occupation. Space which is empty but unable to be occupied is not included in the calculation of vacancies and marketable stock. Vacant space is designated as being available either on a direct or sub-lease basis.

Vacancy Factor
The percentage of total marketable stock that is vacant. The ratio of total vacancy to total rentable area, usually expressed as a percentage.

The prediction of the value of an asset, depending on the purpose for which the valuation is required.

A person who is:

  1. Registered/licensed/approved to carry out property or plant and machinery valuations under any State, Territory or Commonwealth legislation, and/or;
  2. A member of the Australian Property Institute who is accredited as a certified practicing valuer.

The seller of the property.

The derived percentage return of a property calculated by applying the income produced by a property against the market value. Calculated by dividing realised net income by the opening capital value.

The statutory description of allowable uses of land as set out by a planning authority.

Sourced from the Australian Property Institute’s Glossary of property terms.