Commercial Lease Calculator
From monthly rent, escalation and fit-out, compute the average monthly cost and total occupancy cost over a commercial lease term.
Input Data
Results
At a glance:Commercial lease true cost goes beyond headline rent: rent-free period, annual escalations, management fees, government rates/government rent, and fit-out (net of allowance). average monthly = total rent over term / term months; total cost = rent + management + rates + fit-out (net of allowance). In Hong Kong, tenants usually pay management and rates/government rent on top of rent, and landlords often give a rent-free fit-out period. WARNING: Hidden terms — stamp duty on the tenancy agreement, deposits (2-3 months), reinstatement at exit, break clauses. Read the whole lease; this is an estimate, not legal advice.
Formula
Total rental rate = base rate + operating expenses (per unit area/year).
Annual rent = area × total rental rate; monthly rent = annual rent / 12.
Total rent = annual rent × lease years.
Agent fee = commission% × lease years × annual rent.
How to Use
- Enter the monthly rent and lease term.
- Enter rent-free months and the escalation step/interval.
- Enter management fee, rates, fit-out and allowance.
- View the average monthly and total occupancy cost.
FAQ
What is included beyond the headline rent in Hong Kong?
Typically: management fee (building upkeep), government rates and government rent (levied by the government, passed to tenant), and sometimes air-conditioning or promotion levies (malls). These can add a meaningful percentage on top of rent, so always budget the all-in monthly cost, not just the headline.
How does a rent-free period affect cost?
A rent-free (fit-out) period lowers the effective rent because you pay nothing for those months but get the use. Spreading the total rent over the full term gives a lower average monthly cost — a key bargaining chip, especially for new tenancies or weak markets.
How do escalations work?
Rent often rises by a fixed % every set interval (e.g. +5% every 2 years). This lifts the later-period rent and the total cost. Model it to see the true average, and negotiate the escalation rate and timing — a lower step saves more over a long lease than a small headline discount.
What hidden costs should I check?
Stamp duty on the tenancy agreement (shared or by tenant per terms), a deposit of 2-3 months' rent (returnable subject to conditions), reinstatement/ dilapidations at exit (restore the premises), and any break clause penalties or renewal terms. These can materially change the real cost and your exit flexibility.
Should I compare on average monthly or total?
Both. Average monthly tells the ongoing burden (vs your revenue/cash flow); total tells the full commitment over the term (vs alternatives). Compare candidate premises on the same basis and term, and weigh location and footfall, not just cost. This tool estimates; have a solicitor review the lease.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.