Commercial Lease Cost Calculator

Unit A costs £39,600.00 a year to occupy, about £3,300.00 a month or £33.00 per square foot. Across 5 years, including one-off and exit costs, the total is £198,000.00. Turn on comparison to place a second property alongside it.

Annual occupancy cost is rent plus service charge, business rates, insurance, utilities and any other running costs you enter. Cost per square foot divides that total by the floor area, so properties of different sizes can be compared directly.

The term total adds rent for each year of the term, less any rent free period, plus the running costs across the term, fit-out and professional fees at the start and any exit provision at the end. A rent review applies the uplift from the review year onwards.

A rent deposit is shown separately because it is cash tied up rather than a cost. It comes back at the end of the term unless the landlord makes a deduction.

Costs entered by you rather than estimated: business rates use the bill you actually expect after relief, not a rateable value estimate. Figures exclude VAT, which may be charged where the landlord has opted to tax. Rent is assumed to be paid evenly across the year, and breaks, turnover rents and stepped rents are not modelled.

Commercial premises are rarely priced the way they are paid for. The rent per square foot is the headline, but business rates can add a third again, and a service charge in a managed building can add more. Fit-out, professional fees and a dilapidations provision at the end all fall outside the annual figure but still have to be funded.

Comparing two properties works only when both are costed the same way, which is what the comparison mode does. Once you have a monthly figure, check it against the rest of your overheads using the break-even calculator and against your cash position with the cash flow runway calculator.

Business rates come from the rateable value set by the Valuation Office Agency and are billed by your local council, with reliefs such as small business rate relief applied separately. Because reliefs are specific to the property and occupier, this calculator asks for the bill you expect rather than estimating it.

Small shop, 900 sq ft

Rent at £22 per square foot is £19,800.00. Adding rates, service charge, insurance and utilities brings occupancy cost to £33,700.00 a year, which is £37.44 per square foot rather than the £22 headline.

Office with fit-out and a rent free period

A 2,000 sq ft office at £28 costs £88,000.00 a year to occupy. Six months rent free saves £28,000.00, but £66,000.00 of fit-out and fees goes in at the start and £20,000.00 is set aside for reinstatement, giving a five year total of £498,000.00.

Two units compared

Unit A at £18 per square foot totals £180,000.00 over five years. Unit B at £15 with £25,000 of fit-out and three months rent free totals £171,875.00, so the cheaper rent wins by £8,125.00 once everything is counted.