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How to figure rent on retail space

Updated February 21, 2017

If you are new to the business of acquiring retail space, the manner in which they list rental prices may confuse you. It is common practice for the commercial real estate industry to list rental or leasing prices by the square metre or the square foot because so many commercial buildings can be modified by moving interior walls to suit the renter's needs. Thus, describing prices on a cost-per-square-metre or cost-per-square-foot basis provides a cost to the customer regardless of their space needs. You should know how to determine what this equates to in a monthly rental payment before you seriously shop for retail space.

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  1. Obtain the cost per square metre from the agent for the retail space. It will be a number in the following format: £11 per square metre. We will call this value "C."

  2. Obtain the square metre area of the space. If the agent tells you they can modify it to suit your needs, then use the square metres you need for your retail space. We will call this value "SM."

  3. Multiply the cost per square metre (C) by the square metres of the space (SM), and then divide by 12 to arrive at the monthly rent figure, giving you the equation (C x SM)/12 = rent. For example, if C = £11 per square metre and SM = 100 sq. m., then (11 x 100)/12 = £91 per month.

  4. Tip

    Be sure to walk the area and take your own measurements before committing to a rental agreement. Some landlords take their measurements from the middle or outside of walls, and the square metres they report might not all be usable space.

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About the Author

Anthony Smith began writing for Demand Studios in May of 2009 and has since written over 1400 articles for them. He also writes for "The College Baseball Newsletter." He attended the University of New Mexico, and has more than 25 years of experience in the business world.

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