Lease tools
Effective rent calculator
The face rent is the number in the offer. The effective rent is what the lease costs you. Put the incentive in and see the difference, on the same discounted basis a landlord uses.
Free to use
Open the effective rent calculator
It is free and there is no obligation. We ask because the figures only mean something in context, and if the position looks worth a conversation we would rather come to it already knowing the numbers.
Effective rent
—/m²/yr
- Face rent, year one
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- Face rent, term equivalent The escalating stream expressed as one level rate
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- Effective rent, term equivalent The same calculation, after the incentive
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- Discount to face
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- Total incentive
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- Incentive as a share of gross rent
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- Gross rent over the term
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- Net rent payable
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- Total occupancy cost, term equivalent
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Where the money goes
The face rent you are quoted, against what the lease actually costs once the incentive is priced.
Year by year
Rent payable in each year of the term, on the inputs above.
| Year | Rate /m² | Gross rent | Abatement | Rent payable | Present value |
|---|
How this is calculated. Rent is modelled monthly in advance and escalated at each anniversary. The term-equivalent figures are the level rate whose present value, discounted monthly at the rate you set, matches the present value of the actual stream — so an escalating rent and a flat rent can be compared on the same basis. A landlord contribution is treated as received at commencement. This is an indicative calculation to frame a negotiating position; it is not advice on a specific lease, and it does not account for GST, holdover, make-good, or any right of renewal.
How to read it
Why the two numbers diverge
Three things move the gap between the rent you are quoted and the rent you pay.
01
The incentive is capital, not a discount
A rent-free period and a fitout contribution are both money. Spread across the term and discounted, they cut the rate you actually pay. That is how the deal gets priced on the other side of the table. A tenant comparing headline rates is not seeing it.
02
Escalation compounds against you
A fixed review looks small in year one and does most of its work in years five and six. Comparing an offer with a 2% review against one with 4% on year-one rent alone hides where the money goes.
03
Timing changes the number
Six months rent-free taken at the front is worth more than the same abatement spread over six years, because money now is worth more than money later. The discount rate is what prices that difference.
Read the analysis behind this · Map the dates the lease creates
Next step
Have the number checked against the deal in front of you
A calculator takes the inputs you give it. What it cannot tell you is whether the incentive on offer is the one you should be asking for, or what the same landlord has agreed elsewhere. Send us the terms and we will tell you plainly where the position sits.