Why compare total cost, not starting rent
Two offers with similar rents per sq ft can cost very different amounts over a nine-year lease. A lower starting rent with 5% yearly escalation can overtake a higher rent that escalates 15% every three years; three extra rent-free months or a smaller security deposit can be worth lakhs. This calculator puts every offer on the same basis.
What it calculates
- Total rent over the term, after the rent-free months, with each escalation applied (compounded).
- Total CAM — fixed, or escalating with the rent if you tick the box.
- Effective rent per sq ft — total rent spread over every month of the lease, so rent-free periods and escalations are averaged in.
- Interest cost of the deposit — the money locked up as security deposit, at your cost of money, for the lease term.
Before you decide
- Check whether rent is on carpet or super built-up area — compare the same basis across offers.
- Ask what CAM includes, and whether parking, power back-up and signage are extra.
- Compare lock-in, notice period and fit-out contributions too — they don't show up in rent but matter.
Frequently asked questions
What is effective rent?
Effective rent is the total rent payable over the lease divided by the number of months (and the area), so rent-free months and escalations are averaged in. It lets you compare offers with different rent-free periods and escalation clauses fairly.
Should GST be included in the comparison?
GST at 18% applies to commercial rent in the same way for every offer, and businesses registered under GST can usually claim it as input tax credit, so comparing amounts before GST is common. Add it if you can't claim the credit.
Why include the interest cost of the deposit?
A security deposit is money you can't use elsewhere for the whole lease. Multiplying it by your cost of money shows what a larger deposit really costs you.
Manage every lease after you sign
LeaseHub360 tracks rent, escalations, CAM, deposits and lock-in dates for your whole portfolio.