UNDERSTAND THE LANGUAGE OF A COMMERCIAL VALUER - 2

F
Face Rent
The rent shown on a lease document which may or may not include incentives and may or may not include outgoings.

Fair Market Rent
The rent that would be fair for the particular landlord and particular tenant to have agreed under the lease in question having regard to all the circumstances relevant to any negotiations between them of a new rent from the review date. The test is largely subjective. ‘Fair market rent’ is considered to be different from’current market rent’ to take into account what is reasonable between the actual parties to the lease.

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

Fixtures
Those parts of a property affixed to structures or land, usuall in such manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them. Fixtures are usuall included in a sale and commonly include items such as carpets, and awnings.

Floor Space Ratio (FSR)
The amount of development that can be achieved on a site expresed as a ratio. A FSR of 2:1 means that a floor areas equal to twice the area of the site is allowable. THe result is known as Floor Space Area (FSA). See also Plot Ratio.

G
Gazumping
Where the vendor agrees to sell a property, but then sells it to another party on more favourable terms.

Going Concern
The entity is normally viewed as a going concern, that is, as continuing in operation for the foreseeable future. It is assumed that the entity has neither the intention nor the necessity of liquidation or of cutailing materially the scale of its operations. An operating business. Going concern also serves as a premise, under which Valuers and accountants consider a business as an established entity that will continue in operation indefinitely. The premise of a going concer serves as an alternative to the premise of liquidation . Adoption of a going concern premise allows the business to be valued above liquidation value and is essential to the developement of the Market Value of the business.

Gross Lease
One in which all operating costs on the property are included in the rental charged rather than charged as a separate amount. The landlord generally pays for all base year repairs, taxes and operating expenses incurred through ownership. It is the opposite of a net lease in which these costs are borne by the lessee.

Gross Lettable Area (GLA)
Used for calculating tenancy areas in: warehouses; industrial buildings; free standing supermarkets; and showrooms. 13 Refer to Method of Measurement, Published by the Property Council of Australia.

Gross Lettable Area Retail (GLAR)
Used for calculating retail tenancy areas in shopping centres; commercial buildings and strip shows, free-standing shops, semi detached or terrace type shops in suburban streets. 13 Refer to Method of Measurement, Published by the Property Council of Australia. In some states or territories, lease legislation might contain provisions that over-ride the Property Council approach.

Gross Rent
In a gross lease, all operating costs on the property (excluding direct tenancy expenses) are included in the rental.

Ground Lease
Usually a long-term lease of land with the lessee permitted to improve or build on the land and to enjoy those benefits for the term of the lease.

H
Head Lease or Master Lease
A lease to a single entity that is intended to be the holder of subsequent leases to sublessees that wil be the tenants in possession of the leased premises. Headlease is common Australia usage; master lease is North American usage.

Highest And Best Use
The most profitale use of a property which is physically possible, appropriatel justified, legally permissible, financialy feasible, and which results in the highest value of the property being valued.

Holding Over
Where a lease term expires and the lessee remains in occupation (usually on a month-to-month basis) on the terms and conditions of the original lease.

I
Investment Property
Property (land or building; or part of a building; or both) held by by the owner or by the lessee under a finance lease to earn rentals or for capital appreciation or both.

L
Leasehold Land
A land holding that is leased to a person or company by the relevant State (as the Crown). However, it is critical to note that, where applicable, all mineral rights are reserved to the Crown. A lease of freehold land is not leasehold land, the land remains freehold.

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