Unlike residential properties, the value of a commercial property depends heavily on the remaining term of existing lease agreements as well as the creditworthiness and reliability of the tenants.
A key criterion is also third-party usability: if the property can easily be re-let to other commercial users upon the current tenant's departure, this has a value-enhancing effect.
The property class, such as office, retail or logistics, as well as the micro-location within the commercial environment, also significantly influence both the applicable capitalisation rate and the general risk of the valuation.
Contractual special rights, such as tenant renewal options or an agreed turnover rent in retail, also significantly affect the predictability of future income and therefore the value.
In the case of prolonged vacancy or an upcoming change of tenant, an additional assessment is made of how realistic and how costly a follow-up letting under comparable conditions actually is.
For special-purpose properties such as data centres, secured connection capacity replaces floor area as the reference unit – the effect on the valuation is set out in the article Valuing data centres.
For a deeper look: Valuing industrial property: production halls, logistics centres and business parks
How value is derived from sustainably achievable income is explained by the Income approach.
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