Taking the series further, we present to you letters E through H. In case you missed the first four posts, catch up here:
Part I (A)
Part II (B)
Part III (C)
Part IV (D)
Ee
E.B.I.T.D.A.
Earnings before interest, taxes, depreciation and amortisation (EBITDA} is a non-GAAP metric that can be used to evaluate a company’s profitability. EBITDA = Operating Revenue – Operating Expenses + Other Revenue.
Early Termination
It is termination of a lease before the end of original term. This option is provided in most cases after completion of the lock-in period (if any). Early termination options can be provided in extreme cases such as closure of business operation, etc.The lessee could be required to pay an early termination charge as described in the contract.
EBO
Acronym for an Exclusive Brand Outlet (retail industry usage). An EBO is a retail outlet that exclusively stocks/offers merchandise of a particular brand. An EBO may either be company owned or a franchisee outlet.
Economic Life
Usually stated in years post construction or acquisition, during which an asset will add value or generate financial returns.
Economic Obsolescence Reduction
in the economic life of an asset/ property caused by external factors such as regulatory changes, technological changes, and excess supply.
Economic Rent
Market value of rent at a given point of time.
Effective Age
The estimation of the age of a building based on its condition and not chronological age. Better maintained buildings will have a lower effective age than others.
Effective Rent
It is the gross rent payable per month by the occupiers which includes the base rent, maintenance charges, assigned costs of loss of interest on security deposit and rental advance. The effective rent indicates the total cash outflow of an occupier every month on account of leasing any property.
Endorsement
A signature on a draft or cheque by a payee prior to the transfer to a third party. Also,a statement attached to an insurance policy. which changes the terms of the policy.
Equity Linked Mortgage
A title deed of a property that is held as a mortgage, in which the lender takes ownership of a stake in the equity of the property.
Equivalent Yield
It is a weighted average of the initial yield and reversionary yield and represents the return a property will produce based upon the timing of the income received. In accordance with usual practice, the equivalent yields (as determined by the group’s external valuers) assume rent received annually in arrears and on gross values including prospective purchasers, cost.
Escalation Clause
A provision in a contract which calls for an increase in price in the event of an increase in certain costs. For e.g. an escalation clause may specify that rent due will increase with inflation.
Escrow
A deed which is signed, sealed and conditionally delivered but does not become operative until the condition has been fulfilled. In the meantime it is usually held by a third party.
Ex- gratia
Something done without legal obligation or admission of liability.
Ex- gratia Payment
A discretionary payment, usually made to a payee who has no strict entitlement to compensation.
Exception
A provision in an agreement that excludes liability for a specific outstanding. Exception clauses do not conform to the rules of the agreement.
Exchange of Contracts
The first formal and legally enforceable step in the disposal of real property. i.e. when the parties duly sign and exchange copies of a document embodying the terms of the deal.
Exclusive Agency Agreement
An agreement that prohibits a principal from appointing more than one agent. An agreement that gives an agent exclusive rights to deal on behalf of a principal.
Exclusive Listing
Contract between principal and broker wherein the former agrees to pay the latter a certain sum of money regardless of whether the latter plays a role in the execution of the transaction.
Expansion Option
Lessee’s right to take additional space within the building.
Expected Supply
New or retrofitted space entering the market that is still under construction and would be ready for occupation in a specified timeframe (quarter/year).
Export Processing Zones
Established specifically for the manufacturing and export of finished product designed for export.
Extended Coverage
It is an insurance term which means coverage extending beyond that provided by a standard policy.
Extension of Mortgage Agreement between the lender and the borrower for extension of a mortgage beyond the timeframe provided in the existing agreement.
External Valuer
An individual valuer can be considered excernal to one particular lender when his/ her professional activity as valuer cannot be influenced by the lender due to other business and/or personal relationship, or when the valuation business obtained from that lender is a substantial portion of his/ her total business.
Ff
Free of Charge (FOC)
Free of Charge (FOC) includes any goods or services provided gratis.
Facade
The front face of a building.
Face Rent
The quoted rent without taking out the effect of rent-free periods, rebates or incentives, if any.
Facilities Management
The management of occupied(owned or leased) corporate real estate, on behalf of the owner. The services are sometimes considered to be divided into hard services
(like air conditioning etc.) and soft services (ensuring cleaning of the property, monitoring the performance of contractors, etc.)
Fair Market Value
An estimate of what a willing buyer will pay to a willing seller, both in a free market, for an asset or property.
Fair Rent
The market rent of a property.
Final Account
The agreed amount to be paid to the contractor/s for works completed including any adjustments for variations, delay costs, etc.
Financing Costs
The rate of interest and other service charges needed to obtain a loan.
First Mortgage
The mortgage that has priority over all others when there is a default on the mortgaged asset.
First Partial Month’s Payment
If the rent commencement date for the first month of the initial term is other than the first day of a calendar month then the rent for such partial month is prorated on daily basis, based on the actual number of days in that calendar month.
First Right of Refusal (First Refusal Right)
A right given by one party to another whereby the first party is obliged to give the second party a chance to acquire an asset before he offers it to anyone else.
First-Level Market
The land market where developers obtain land from the government via auction or bid.
Fit-out
The physical components included in a facility constructed to enable the occupier to utilise the space.
Fixed Price Contract
A building contract in which the total price is fixed at the outset usually subject only to changes due to subsequent variations in statutory undertakers’ charges.
Fixed Rate Mortgage
A mortgage where the rate of interest remains constant.
Fixed Rent
A rent which cannot be changed during the entire period of a lease or at the date when the lease is being valued.
Flagship Store
A flagship store is the main or best retail outlet in a chain. Depending on the country, this may also mean the main store versus a remote location (branch). Such stores are usually large in size and a brand will typically operate only one flagship store in a single city.
Flexible Interest Rate
A rate that fluctuates between due payment, as opposed to a fixed interest rate which is set for the entire life of the loan or a predetermined period.
Floating Charge
It is a form of security under which all the assets of the business, other than those which are subject to a mortgage or fixed charge, are used as security for the loan.
Floor Plate
The aggregate superficial area for each floor in the building. It includes lift area, partitions, external walls, etc.
Floor Space Index (FSI)
Also called Floor Area Ratio (FAR); it is the quotient of total covered area on all floors of all buildings on a certain plot to the area of the plot.
Foreclosure
The act of taking away the right, tide and interest of the owner of a property or asset in case of due payments.
Foreclosure Sale
The sale of a property following foreclosure.
Franchise Agreement
An agreement in which a manufacturer or supplier enters into a continuing contractual relationship with a third party (franchisee) enabling the latter to sell products or services under the supplier’s trade name and guidance, in exchange of a fee.
Freehold
Tenure in perpetuity.
Full Rent Value (FRY)
The best possible rental that might reasonably be expected in the open market for a particular property at a given time, with regard to the terms of the actual or notional lease, e.g. responsibility for repairs rights of assignment or subletting, or basis of review.
Gg
Gap Financing
A temporary financing usually by a bank extended to a developer to bridge the deficiency between the amount of mortgage loan due on project completion and the expenses incurred during construction.
Gazebo
It is a pavilion structure, often octagonal, commonly found in parks, gardens and spacious public areas. Gazebos are freestanding, or attached to a garden wall, roofed and open on all sides; they provide shade, basic shelter, ornamental features in a landscape and a place to rest.
Gearing
I) The use of borrowed money to generate a higher yield through investment in real estate.
2) The relationship between a company’s loan capital and their equity capital.This is usually expressed as the ratio of loan capital to net asset value.
General Contractor
Contractor who assumes responsibility for completing a construction project, under contract to the owner and hires. supervises and pays all subcontractors.
General Mortgage
A mortgage that includes all real property of the mortgagor, both what he has and that he may acquire in future.
Going Concern Value
The total value of a business as carried on with all its assets and liabilities. goodwill and potentialities. If the premises used are owned by the business, they form a part of the going concern value on the basis of their value to the business.
Grace Period
A period of time after a payment such as a loan or insurance premium becomes due, before one is subject to penalties, late charges, forfeiture or cancellation.
Grade
I) The degree or rise of a sloping surface.
2) To change the original slope of ground to prepare for paving or for drainage purposes.
3) Classification of building quality. In Asia Pacific property markets. top tier property is termed Premium or A Grade.
Green Building
A common term used to describe a building that is designed, built or operated in a way that is more sustainable, minimising its negative impact on the natural environment.
Greenfield Sites
A greenfield site is one which has never been built upon previously. These are areas of land, usually agricultural, which are considered for urban development.
Greenfield Project
A project which lacks any constraints imposed by prior work, where there is no need to remodel or demolish an existing structure. E.g. of Greenfield projects are new factories, campuses, power plants. airports which are built from scratch on Greenfield site.
Green Leases
A lease that incents and encourages significantly reduced usage of both. renewable and nonrenewable resources by both landlord and tenant; and establishes a more sustainable operating platform for the building. A green lease often details environmentally preferable products, water conservation measures, energy efficiency standards, ventillation requirements, etc.
Gross Area
The total floor area of a structure, measured from its outside walls.
Gross Floor Area
The total of all covered areas including common areas such as amenities and parking.The area to be leased or sold is usually quoted on the basis of Gross Floor Area (GFA), which includes not only the gross area of the leased floor but also portions of common areas. The ratio of “net lettable area” to GFA varies, naturally depending on the efficiency of the superstructure and the area of the basement levels included in GFA calculations.
Gross Leasable Area (GLA)
Gross leasable area is the total area that is used for rental space in a building.
Gross Operating Profit
The difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxation and interest payments.
Gross Rent
Refers to the total rentals payable by tenants. This is equivalent to the sum of base rent plus charges for utility services such as electricity. gas, water and sewer and trash removal.
Gross Sales
The total sales. for a specific period, before adjusting discounts or returns.
Ground Rent
The rent paid by a lessee for the use of land.
Guarantor
A person who makes or gives a guarantee.
Guarantee
An agreement by which one person assumes the responsibility of assuring payment or fulfillment of another’s debts or obligations
Hh
HVAC
The acronym for Heating, Ventilating and Air-Conditioning.
Handover Condition
Condition of the office unit/premises upon turnover to the lessee.
Hard Option
Option on a certain area of premises (i.e., I 00 sq. ft. or 1,000 sq. ft. or I 00,000 sq. ft.) offered by the lessor to the lessee over a fixed duration of time where in the lessor will not market the area to another tenant/ party for that specific time frame. A hard option can either be free of cost or could have a holding cost of a bare minimum value.
Heads ofTerms
A document signed between the lessor and lessee or the buyer and seller which outlines the commercial terms agreed upon and usually provides a date and duration by which the final agreement is to be executed. Such a document does not create any legal obligation on either party until and unless some monetary value has been paid to the seller or lessor.
Hectare
A unit of area measurement. equaling 2.471 acres or about
I 07,637 square feet or I 0,000 square meters.
Hedge
Investment with the characteristic that the investor’s capital and/or income is to varying degrees protected from loss due to inflation or other causes of price movement from inflationary
Hypermarket
A large (50,000 to 200,000 sq. ft.) low-rise retail centre which sells a wide range of food and general merchandise at low prices. Typically located on a large tract of land off highways or major roads or in suburban locations. However in certain landscarce cities (such as New Delhi or Mumbai), they may be located within a shopping mall and function as an anchor tenant of the mall.
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