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Tealeaf · 13-10-2004, 16:47

What's the financial effect of Britcliffe's scheme as far as the market hall tenants are concerned? Here's a back-of-an-envelope calculation that the accountants on here may wish to comment on. I know there's umpteen ways of calculating an ROI, so I'll keep it as simple as possible

Assuming that the repairs and upgrade of the building will cost £1m, depreciated straight line over 10 years, that there is a seperate management fee of say, net £100K and that the management co are looking for a 15% ROI and assuming that there are 30 tenants within the market hall.

Management co will be looking to recover the initial investment by increasing total rental income by £115K per annum; in addition, it will seek to pass on the net management fee of £100K per annum. Total additional rent recoverable from tenants, per annum, £215K. Average increase of rent per annum, 215/30 = £7,166pds per market stall.

Obviously, there are alot of simple assumptions here...the market stalls are all different in size, the capital upgrade cost may be £500,000 or it may be £5m, the depreciation may be over 7 years or over 25years......any comments, anyone?

13-10-2004, 16:47	#30
Tealeaf God Member Join Date: Jan 2004 Location: Paradise Lost Posts: 7,220 Liked: 11 times Rep Power: 4266	Re: Our Market Hall up for grabs. What's the financial effect of Britcliffe's scheme as far as the market hall tenants are concerned? Here's a back-of-an-envelope calculation that the accountants on here may wish to comment on. I know there's umpteen ways of calculating an ROI, so I'll keep it as simple as possible Assuming that the repairs and upgrade of the building will cost £1m, depreciated straight line over 10 years, that there is a seperate management fee of say, net £100K and that the management co are looking for a 15% ROI and assuming that there are 30 tenants within the market hall. Management co will be looking to recover the initial investment by increasing total rental income by £115K per annum; in addition, it will seek to pass on the net management fee of £100K per annum. Total additional rent recoverable from tenants, per annum, £215K. Average increase of rent per annum, 215/30 = £7,166pds per market stall. Obviously, there are alot of simple assumptions here...the market stalls are all different in size, the capital upgrade cost may be £500,000 or it may be £5m, the depreciation may be over 7 years or over 25years......any comments, anyone?