A tenant of a shop wants to extend the current lease to 15 years with five-year upward-only
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Question:
A tenant of a shop wants to extend the current lease to 15 years with five-year upward-only rent reviews. The current lease has two years unexpired at a rent of 40,000 per annum. The market rent is 45,000 per annum. Assuming comparable freehold yields of 7%, what rent should the 'landlord accept and the tenant offer' for the first five years of a new lease? When reporting the rent, comment on anything else that should be considered. (40% of marks)
Related Book For
Fundamental Accounting Principles
ISBN: 978-0071051507
Volume I, 14th Canadian Edition
Authors: Larson Kermit, Tilly Jensen
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