REAL ESTATE GUIDE
Industrial Development Underwriting Guide
Industrial underwriting links lettable area, rent per square metre, lease terms, development cost and exit yield.
In this guideWhat the analysis measuresCalculation frameworkUnderwriting reviewHow to use the result
What the analysis measures
Define gross and net area, clear height, loading, yard, power and specification because rent and cost benchmarks depend on the physical product.
Calculation framework
Model rent-free, leasing costs, vacancy, service-charge recovery and tenant incentives. A headline rent is not the same as effective rent.
Underwriting review
Phase land, construction and fit-out costs, then size debt and interest from the actual programme. Test speculative lease-up separately from pre-let space.
How to use the result
Review yield on cost, development spread, cost per square metre, debt yield, IRR and exit sensitivity.