Commercial Property
Valuation Calculator
Find out what a UK commercial property is really worth in seconds. Enter the rent, the running costs and a market yield, and see the capital value using the same investment method surveyors and lenders use.
What You'll Calculate
Capital Value
The estimated price the property would trade at, based on its net income and the chosen yield.
Net Operating Income
Your gross rent minus running costs. This is the figure the valuation is actually built on.
Net Yield Applied
The yield you applied to the net income to reach the value. The single most important input.
Gross Yield
The simpler return on the full rent, useful for a quick comparison against other deals.
What's Included
The investment method, the way the market prices income: Capital value from net rent and yield, the same approach surveyors and lenders use to value tenanted property.
Net and gross yield side by side: See both the yield applied to the value and the simpler gross yield on the full rent, so you can compare deals at a glance.
Any commercial sector: Offices, shops, industrial units, mixed-use buildings and commercially-valued HMOs. Pick the type and enter the right market yield for that asset and location.
How It WorkS
Choose the property type
Office, retail, industrial, mixed-use or commercial HMO. This frames the yield you should use.
Enter the rent
Type the rent the property produces, switching between per year and per month. Use the actual or achievable market rent, not an inflated figure.
Add the running costs
Insurance, management, repairs and a void allowance. The calculator subtracts these to get the net income the valuation rests on.
Set the yield and read the value
Enter the net initial yield for that type of asset in that location. The capital value, net income and yields update instantly.
The Investment Method
Commercial property is priced on income, not on bricks. Master the relationship between rent, costs and yield and you can value almost any tenanted building.
The investment method capitalises income. You divide the net annual rent by the yield investors expect, written as a decimal. The formula is Capital value = net annual rent / net initial yield. A property earning £54,000 net at a 6% yield is worth £900,000, because £54,000 is 6% of £900,000.
Valuers work from net income, not gross rent. If you skip running costs you overstate the income and therefore the value. Always deduct realistic management, insurance, repairs and voids before applying the yield. The gap between gross and net is often 10 to 20% of the rent.
The yield trap
Small movements in yield swing the value hard. The same £54,000 of net income is worth £900,000 at 6%, but only £720,000 at 7.5% and £1,080,000 at 5%. That is a £360,000 spread from a couple of percentage points. Choosing the right yield matters more than any other input, which is why guessing a national average is dangerous.
A long lease to a strong tenant is low risk, so it commands a low yield and a high value. A short unexpired lease, a break clause, or a weak tenant pushes the yield up and the value down. The calculator cannot see your lease, so you reflect it in the yield you enter.
The capital value is your headline estimate. The net operating income shows what the valuation is built on. The net yield is the rate you applied, and the gross yield is the simpler return on full rent, useful for quick comparison against other deals.
Worked example
Annual rent
£60,000
Running costs
£6,000
Net operating income
£54,000
Net yield applied
6%
Estimated capital value
£900,000
Beyond The Investment Method
Other Ways to Value Commercial Property
The investment method fits most tenanted property. These apply in specific cases.
Comparable method
Value based on recent sale prices of similar nearby properties. Strong where there is good transaction evidence.
Replacement cost
The cost to rebuild plus land, less depreciation. Used for specialised buildings with no real rental market.
Profits method
For trading properties like pubs, hotels and care homes, value comes from the business's sustainable profit.
Business rates
The rateable value set by the VOA is a tax figure, not a market value. Do not confuse the two.
Capital Value
Your headline estimate of what the property would sell for, found by dividing net income by the yield.
Net Operating Income
Gross rent minus running costs. The income figure the whole valuation is built on.
Net Yield Applied
The rate you applied to net income. Lower yield means higher value, and vice versa.
Gross Yield
Full rent as a percentage of value. A quick comparison metric, before costs.
Common Questions
How do you value a commercial property?
The standard approach is the investment method: divide the property's net annual rent by the market yield for that type of asset. For example, £54,000 of net rent at a 6% yield gives a value of £900,000. Comparable, replacement cost and profits methods apply in specific cases.
What is a yield, or cap rate?
The yield is the annual net income expressed as a percentage of the property's value. A property worth £900,000 producing £54,000 of net income has a 6% yield. Investors use it to compare assets and to price risk.
What is a good yield on commercial property in the UK?
It depends on sector and risk. Prime assets traded around the high-5% range at the end of 2025, while secondary or higher-risk property commands higher yields. There is no single good number, only the yield that fits the specific property and location.
Should I use gross or net rent?
Net. Deduct running costs such as management, insurance, repairs and a void allowance from the gross rent first, then apply the yield. Using gross rent overstates the value.
How does the lease affect the value?
A long lease to a strong tenant lowers the yield and raises the value. A short lease, a break clause or a weak tenant raises the yield and lowers the value. Reflect this in the yield you enter.
Is this the same as a formal valuation?
No. This is an indicative estimate for screening deals. A mortgage or purchase decision needs a RICS Red Book valuation by a qualified surveyor.
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