Glossary of Terms

Gross Floor Area (GFA)

Gross Lettable Area (GLA)

GFA and GLA is the area required to provide the occupiable space. It therefore captures the building envelope as measured from the outside edge of external walls and the midway line of intertenancy walls. It also includes all mezzanine levels.

Gross Rent

A gross rent is an all-inclusive rental with the exception of utility usage costs (eg. electricity, gas, water, telephone and internet). A lessee is generally required to effect internal insurances which are a cost on top of the gross rent.

Net Floor Area (NFA)

Net Lettable Area (NLA)

NFA and NLA is the occupiable space of premises. The Property Council of Australia provides guidelines for the correct measurement of NLA. www.propertycouncil.com.au

Net Rent

A net rent is a rental that excludes outgoings. Under a net rental agreement the tenant will be required to pay all building outgoings on top of the rental figure. This generally includes Council rates, Water rates, Strata Levies, Land Tax and Insurances. An estimate of annual outgoings is generally provided at the beginning of the rental year for payment on a monthly basis. This is then adjusted at the end of the rental year based on actual charges.

Option to Renew a Lease

After the initial lease term, a Lessee may be granted an option to extend its lease for a further term under pre-agreed conditions. Generally a Lessee will be required to provide notice of its intention to take up its option between three and six months prior to expiry of the initial term.

Rent Reviews

Commercial rents are generally reviewed on an annual basis. A lease will stipulate the method of calculation of the new rental. There are three common ways a rent is reviewed:

           1. CPI – Consumer Price Index

           2. Fixed review – generally in the vicinity of 4%

           3. Market review – rent is assessed in accordance with current rents in the market place for similar properties

 

Tax (GST, CGT & Income Tax) &  Commercial Property

Leasing Commercial Property

www.ato.gov.au/general/property/property-used-in-running-a-business/leasing-and-renting-commercial-premises/

Selling Commercial Property

www.ato.gov.au/General/Property/Property-used-in-running-a-business/Selling-commercial-premises/

Purchasing Commercial Property

www.ato.gov.au/General/Property/Property-used-in-running-a-business/Buying-commercial-premises/

Zoning

Zoning is a local government statutory law which provides for the permitted and prohibited uses of a property. Zones are identified in Council’s Local Environment Plan (LEP), and are commonly:

IN1 – General Industrial

IN2 – Light Industrial

B1 – Neighbourhood Centre

B2 – Local Centre

B3 – Commercial Core

B4 – Mixed Use

B5 – Business Development

B7 – Business Park

Links to Manly, Warringah and Pittwater LEP documents can be found on our useful links tab http://bridge.ondicomdigital.com/resources/usefullinks/ .

A lessee is responsible for consent to operate its business within a particular premises. Council’s town planner will be able to provide preliminary advice, and a private town planner will be able to assist specifically. Please contact our office for guidance as to how to go about this process.