Financial Resource

valuation to ascertain a ground rent, the rate at which costs are decapitalised to find the annual deduction from the occupation rents; it comprises:
a) an investment yield
b) an annual allowance for developers risk and profit and, in some instances
c) an annual sinking fund element
Discounted cash flow analysis:
Techniques used in investment and development appraisal whereby future inflows and outflows of cash associated with a particular project are expressed in present -day terms by discounting. The most widely used forms of DCF are the internal rate of return (IRR) and net present value (NPV). The techniques may be used for such purposes as the valuation of land and investment, the ranking of projects or their components.

E

Easement (UK):
A right appurtenant to a parcel of land entitling a dominant owner to use the land of the servient owner in a particular manner, or constraining the legal rights otherwise enjoyed by the servient owner, e.g. A right of way, right to light, right to support. Strictly speaking, easements cannot exist “in gross”, i.e. personal and unattached to the ownership of land, but rights similar to easements can be created by statute, usually for the benefit of public utility undertakings, and these are commonly referred to as “statutory easements”.
Effective rent:
The gross rent payable per month by the occupiers which includes the base rent, maintenance charges, imputed 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.
Equity linked mortgage:
A mortgage whereby the interest on the principal in part or in whole is calculated, usually yearly, by reference on the security, e.g. It may reflect annual increase or possible decreases, in the annual return on, or the value of, the property in which the mortgage is secured.
Escalation clause specified in lease agreements wherein renewals of lease period are built in:
It involves an increment in the base rent at every renewal of a lease agreement in the base rent at every renewal of a lease agreement and is generally a percentage rate that is either pre agreed or negotiated before the renewal of the lease agreement.

F

Facilities management:
The coordination of many specialist disciplines to create the optimum working environment for staff.
Fail rent:
The rent determined by a rent officer (or, on appeal, by a rent assessment committee) under a regulated tenancy and registered.
FERA:
An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act ( FERA) of 1973, It is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.
Fire certificate:
A certificate covering matters of safety required under the legislation for hotels, boarding houses, factories, offices shops and railway premises, excluding those buildings containing less than a minimum number of employees. In order to obtain a fire certificate, one must apply to a fire certificate, one must apply to a fire officer, who then inspects the building and issues a list of requirements (e.g. Fire doors). Once the fire officer is satisfied that those requirements have been met he will issue the fire certificate. It enables fire officers, in the event of an emergency, to have prior knowledge inter alia of the permitted number of people on each floor; it also informs officials if any authorised inflammables /explosives materials on the premises.
Fitouts:
Relate to the interior permanent furnishings required in a property including HVAC ducting, fire protection system implementation, establishment of workstations and telephone/computer cabling among other, in order to make the property fit for usage.
Flatted factory:
An industrial building of more than one storey, usually with two or more goods lifts, and constructed or converted for multiple occupation. The building is subdivided into small, separately occupied units, which are used for manufacturing, assembly and associated storage.
Force majeure:
A force, which cannot be resisted, in other words, something beyond the control of the parties involved. It includes acts of God and acts of man, e.g. Riots, strikes, arson. In many contracts and insurance policies, specific provision is made for damage or injury arising from force majeure. For example, the financial liability of a building contractor for failure to complete by a specific date may be relieved to the extent it was caused be force majeure. This is a common clause in most property contracts.
Foreclosure:
1. (UK) The mortgagees restricted power to extinguish the mortgagor’s right of redemption by transferring the mortgagor’s interest in the property to himself, if the mortgagors defaults in paying his dues or in complying with any other terms of the mortgage deeds.
2. (USA) The legal process by which a mortgagee can sell the mortgagors interest in the property to satisfy debt: also called “foreclosure sale”. Also applied to the extinguishment of a mortgagors right of redemption. Freehold:
In general parlance this is used as shorthand for the tenure of an estate in fee simple absolute in possession. Strictly speaking, however, freehold includes fee simple, entailed interests and tenancies for life. Frontage (line): The full length of a plot of land or a building measured alongside the road on to which the plot or building fronts. In the case of contiguous buildings individual frontages are usually measured to the middle of any party wall.

G

Greased:
Lease back The disposal by a freehold or leasehold owner of his interest on a property or leasehold interest where the rent payable is geared to a fixed percentage of some variables, often rack-rental value.
Gold cause (UK):
A clause in a lease, which provides for the rent to be reviewed by reference to the price of gold.
Green field site:
An area of land, usually in the edge of a town or city or away from substantial urban areas, hitherto undeveloped but for which development is now proposed.
Gross External Area (GEA):
The aggregate superficial area of a building taking each floor into account. As described in the RICS/ISVA Code of Measuring Practice (UK), this includes: external walls and projections, internal walls and partitions; columns; piers, chimney-breasts, stairwells, and lift wells; tank and plant rooms, fuel stores whether or not above main roof level and open-sided covered areas and enclosed car-parking areas, terraces etc.

H

Hi-tech building (high technology building):
Primarily a modern industrial building which is particularly suited to the flexible uses and space needs of business organisations engaged in modern technologies. Such activities usually require more office or laboratory space than a traditional factory and also more sophisticated and adaptable installations for services and communications.
High point loading:
A concentration of abnormally heavy floor loading at one point or more particular places in a building or other structure where extra support may be required.
HVAC:
Refers to the heating, ventilation, and air conditioning system installed in a building to regulate temperature. This includes air conditioning plants, chillers and ducting systems, which ensure the uniform transfer of the cold or hot air, as the case may be throughout the building.

I

Indian Stamp Act, 1899:
A legal statute, which provides for the payment of stamp duty in case of all real estate transactions to duty to the local government. The value of the stamp duty depends on the rental payable and the lease term or the sale value as the case may be. This duty is paid by purchasing non-judicial Indian Stamp Paper, on which the lease/sale agreements are documented.
Improvements:
Generally, physical changes which enhance the capital value of land or buildings. These may include additional buildings, extensions to existing buildings, installation of new services, e.g. Central heating and air conditioning and infrastructure works. On the other hand, mere replacement by a modern equivalent if something worn out would normally be regarded as a repair rather than an improvement. The distinction has legal and taxation consequences.
Indenture:
A deed between two or more parties, each party having his own copy. Originally copies were all included in a single document from which each was torn or cut along a wavy (intended) line. Institutional investors: These are generally taken to include banks, pension funds, insurance companies, unit trusts and investment trusts, which are together commonly referred to in the investment field as the “institutions”. Investment yield: The annual percentage return which is considered to be for a specific valuation in an investment being expressed as the ratio of annual net income (actual or estimated) to the

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