1. What is Commercial Rent Review?

Commercial rent review is a process where the rent for a commercial property is reassessed, typically based on factors like Consumer Price Index (CPI) changes, market conditions, or other terms specified in the lease agreement.

2. How CPI-Based Rent Review Works

The CPI-based rent increase is calculated using the formula:

Where:

• \( CPI \) — Consumer Price Index percentage (inflation rate)
• \( Current\ Rent \) — The current monthly rent amount

Explanation: The rent increase is proportional to the inflation rate, maintaining the real value of the rental income over time.

3. Importance of Rent Review Calculations

Details: Accurate rent review calculations ensure fair adjustments that account for economic changes while maintaining landlord income and tenant affordability.

4. Using the Calculator

Tips: Enter the current CPI percentage (inflation rate) and the current rent amount. The calculator will show both the rent increase amount and the new rent amount.

5. Frequently Asked Questions (FAQ)

Q1: How often are commercial rents typically reviewed?
A: Most commercial leases specify rent reviews every 1-5 years, often tied to CPI changes or market conditions.

Q2: Is CPI the only factor in rent reviews?
A: While CPI is common, some leases use fixed increases, market reviews, or a combination of factors.

Q3: Can rent decreases happen with negative CPI?
A: This depends on lease terms. Some specify minimum increases regardless of CPI.

Q4: How is CPI determined for rent reviews?
A: Typically uses official government CPI figures for a specific period before the review date.

Q5: Are there caps on CPI-based increases?
A: Some leases include maximum (cap) and minimum (floor) increase percentages regardless of CPI.