At Raine & Horne Business Sales, our business brokers can advise business buyers on industry standards and expectations on this great debate… how much rent to pay?
Market value as defined by the International Valuation Standards Council (IVSC) is:
"the estimated amount which an asset should exchange(including leased space) on
the date of valuation between a willing buyer (tenant) and a willing
seller (landlord) in an arm’s length transaction after proper marketing,
wherein the parties acted knowledgeably, prudently and without compulsion.”
& Horne Business Sales, our business brokers can advise business
buyerson industry standards and expectations on this great debate… how much
rent to pay?
often calculated on a per square metre basis. This method is most likely
used by landlords. A tenant’s (business owner) position is more likely to
be concerned with what the business can afford to pay and is usually calculated
as a percentage of turnover. For example:
Supermarket rent between 2% - 6%
of turnover (this percentage can vary depending on gross profit margin)
Cafes & Restaurants between
8% - 10% of turnover
Fruit & Vegetable shops
between 3% - 5% of turnover
Retail Tyre Stores between 4% -
5% of turnover
when the parties are usually at loggerheads in determining a fair value for
rent with both parties wanting to maximise their return on investment.
want a fair return per square metre and the highest possible return on their
commercial property investment.
business owners know only too well that if the business is paying rent which is
too high then they will be under pressure to either lift sales significantly or
increase gross profit margins, so that they may maintain or improve their
& Horne Business Sales has a database of over 1,050 businesses
sold over the past 20 years inSouth Australia to draw on for advice in this
& Horne Business Sales you can be assured of getting the right
advice on business sales as we specialise in selling businesses.
Tony Iasiello has been working as a Business Broker since 1997 having undertaken substantial accounting training and having also completed his business sales course. Tony’s area of specialisation in recent years has been in supermarkets, cafes and transport/distribution rounds. Also with the current influx of business migrants coming to South Australia, Tony has been involved in many happy sales for both vendors and new owners.