Rent Valuation and Rent Review Determinations in Sydney
Monita provides independent market rent valuations for lease renewals, commercial rent reviews and rent disputes.
What a Rent Review Valuation Involves
Independent market rent determinations for commercial, industrial and retail properties at lease renewal or mid-term review, prepared by a Certified Practising Valuer.
Who Needs One?
Landlords, tenants, property managers and solicitors.
- Commercial offices
- Industrial & warehouse premises
- Retail & shopping centre tenancies
- Specialised commercial premises
Rent Review Valuations in Sydney
Monita prepares independent market rent valuations from our Sydney office at 1/261 George Street, for landlords, tenants, property managers and solicitors dealing with commercial, industrial and retail premises in Sydney. The work is led by Nirav Shah, a Chartered Valuation Surveyor (MRICS) and Certified Practising Valuer (Property). Group heritage since 1954.
We start by reading your lease, because the lease decides how the rent is to be set. Tell us who will receive the report and why you need it, and we will confirm the approach at the free consultation.
Market Rent vs a Rent Review Clause
These two things are often confused. Market rent is the rent a property could reasonably achieve in the open market, on the terms of the lease. A rent review clause is the part of the lease that says when and how the rent changes. The clause tells the valuer what question to answer.
Leases generally use one of these review methods, or a mix:
- Market review: the rent is reset to market rent, which needs a valuer's opinion
- CPI review: the rent moves with an index named in the lease, which is mainly a calculation
- Fixed review: the rent rises by a set percentage or amount on set dates
- A combination, for example fixed increases with a market review at an option or renewal
How Market Rent Is Determined
The valuer reads the lease, inspects the premises and gathers evidence of rents for comparable premises in the area. The evidence is then adjusted for size, location, condition, lease terms and incentives such as rent-free periods, so the figures can be compared fairly.
The report states the market rent, the evidence relied on and the reasoning, so a landlord, tenant or solicitor can follow how the figure was reached. The valuer works from the wording of the lease, including any assumptions it tells the valuer to make about the premises, the term or the incentives.
When You Need a Rent Valuation
A rent valuation is commonly needed for:
- A scheduled market rent review under the lease
- A lease renewal or the exercise of an option
- A dispute between landlord and tenant over the rent
- Setting the rent for a new letting
- A lease between related parties, where an independent figure is wanted
- A rent that needs to be reset after major works or a change of use
Agreed Valuer, Expert or Adviser
Your lease may say how a valuer is chosen, whether the valuer acts as an expert whose decision binds both sides, and how the valuer is to be paid. The role we take depends on that wording and on what you agree, so please send the rent review clauses with your enquiry.
Some retail shop leases in NSW are also covered by retail leasing legislation, which can affect how rent is reviewed. We are valuers, not lawyers, so please speak to your solicitor about the legal position, deadlines and notices under your lease.
How a Monita Valuation Works
Free consultation
We talk through the purpose, the valuation date and what the report is for.
Scope and fee
You get a firm fee estimate and a delivery date before any work begins.
Valuation
We gather the evidence, inspect where needed and apply the method that suits the purpose.
Report
A clear report setting out the basis, the evidence and the reasoning, ready for your adviser, lender or auditor.
Rent Review Valuation FAQs
What is a rent review valuation?
It is an independent opinion of the market rent for a property, prepared by a valuer. It is used at a lease renewal, a scheduled market rent review or when landlord and tenant disagree about the rent. The report sets out the evidence and reasoning behind the figure.
What is the difference between market rent and a rent review clause?
Market rent is what the premises could reasonably earn in the open market. A rent review clause is the lease provision that says how the rent is reviewed. The clause may call for market rent, a CPI increase or a fixed increase, so the valuer reads it first.
Do all rent reviews need a valuer?
Generally no. CPI and fixed percentage reviews are mainly calculations from the lease wording. A valuer is usually needed for a market review, a renewal at market rent, or when the two sides disagree about the figure. Check your lease or ask your solicitor.
How is market rent worked out for Sydney premises?
The valuer reads the lease, inspects the premises and compares rents on similar premises, adjusted for size, location, condition, lease terms and incentives. The report states the evidence and reasoning so you can see how the figure was reached.
Can a landlord and tenant use the same valuer?
Yes, if both agree, or if the lease provides for a joint appointment. Either side can also engage its own valuer. Your lease and solicitor can confirm how a valuer should be appointed and whether the valuer's decision is binding.
Is a rent valuation the same as a rental appraisal from an agent?
No. An agent's appraisal is a marketing estimate. A rent valuation is prepared by a qualified valuer, sets out the evidence and assumptions, and is written for a stated purpose such as a rent review or dispute.
Do you value industrial and retail rents as well as offices?
Yes. We prepare market rent valuations for offices, industrial and warehouse premises, retail shops and shopping centre tenancies, and specialised commercial premises in Sydney. Tell us the property type and we will confirm what we need.
What do you need to start a rent review valuation?
The property address, a copy of the lease and any variations, the rent review clauses, the review date, the current rent and details of any incentives or recent works. Tell us who will receive the report and why it is needed.
Can you help if the landlord and tenant disagree on the rent?
We can prepare an independent market rent valuation to inform negotiations or a process set out in the lease. We cannot give legal advice, so please speak to your solicitor about the steps, notices and time limits under your lease.
Do retail leases in NSW follow different rules?
Retail shop leases in NSW may be covered by retail leasing legislation that affects how rent is reviewed and how a valuer is appointed. This is a legal question, so please check with your solicitor. We will read the lease before we start.
Can the rent valuation be used for a lease between related parties?
Yes. An independent market rent figure is often used where the landlord and tenant are related, for example between a company and its owner. Tell us the purpose and who will receive the report, and ask your accountant what they need.
How long does a rent review valuation take?
It depends on the property, the lease and the evidence needed. We agree the timeline at the start, and if a review date or deadline under the lease is close, tell us when you enquire.
Other valuations you may need
Ready for a precise, independent valuation?
Connect with the Monita Asset Management team. All consultations are free of charge.
- Free initial consultation
- Fee confirmed before any work begins
- Certified Practising Valuer, Sydney CBD office