Reference
Glossary: 51 property terms
Each term explained in two lines, with a link to its practical meaning for buyers, sellers and owners of commercial property.
Selling
Costs
Value
Gross initial yield
Gross rent divided by the investment.
Net initial yield
Yield after deducting the owner's expenses.
Commercial property valuation
Formal valuation by a valuer.
Rental capitalisation method
Valuation method based on rental income.
DCF method (discounted cash flow)
Valuation based on future cash flows.
Letting potential
The extent to which a property can be let quickly and at a market rent.
Legal
ROZ model
Standard commercial lease agreement.
Zoning plan / environmental plan
Permitted use of land and buildings.
Environmental permit
Permit for construction or change of use.
Break option
Right to terminate a lease early.
Chain clause
Obligation passed on to a subsequent owner.
Right of superficies
Right to have a structure on someone else's land.
Ground lease for commercial land
Right to use land in return for ground rent.
KvK use designation and SBI code
Business activity linked to the use.
Vacant Property Act
Temporary letting of vacant property.
Rent review (Article 7:303 of the Dutch Civil Code)
Adjustment of the rent to market levels.
Notice period for commercial premises
Notice periods and grounds for terminating a lease.
Asbestos survey
Investigation into asbestos in older buildings.
Soil investigation
Investigation into soil contamination.
Change of use
Giving an existing building a different use.
Wwft checks for commercial transactions
Mandatory identity and source-of-funds checks.
Letting
Rent-free period
Period without rent payments offered as an incentive.
Incentive
Financial incentive to enter into a lease.
Service charges
Costs in addition to the base rent.
Loss of rental income
Rental income lost through vacancy or non-payment.
Rent indexation
Annual adjustment of the rent.
Rental deposit
Security for the landlord.
Handover in shell / bare / building-services-fitted condition
Level of finish on handover.
Office
Investment
WALT (Weighted Average Lease Term)
Weighted average remaining lease term.
Sale and leaseback
Sale with an immediate leaseback.
Leverage (financial gearing)
Effect of debt on returns.
Loan-to-value (LTV)
Ratio of the loan to the property's value.
Investor (commercial property)
Buyer focused on rental returns.
Industrial premises
Business unit
Small, self-contained commercial premises.
Warehouse
Large covered commercial premises.
Distribution centre
Large-scale logistics storage and transshipment facility.
Loading dock
Raised loading and unloading platform.
Clear height
Usable height beneath the roof or trusses.
Floor loading capacity
Maximum load the floor can support.