What this calculator does
Australian commercial leases are almost always quoted as a rate per square metre per year, such as "$300/m²/year", rather than as a flat monthly figure the way residential rent usually is. To calculate commercial rent you multiply that rate by the floor area of the space, which gives the annual figure, and then divide by twelve for a monthly comparison.
The number people get caught out by is outgoings. A quoted rate is often the base rent only, and the tenant separately pays a share of council rates, building insurance, common-area maintenance and similar costs, billed as a further dollar amount per square metre. Leaving outgoings out understates the real cost of the space, sometimes by a large margin.
The formula
Multiply the floor area by the annual rate per square metre to get the base annual rent, then divide by 12 for the monthly figure. If outgoings are quoted separately, they are worked out the same way, per square metre per year, and added to the base rent to give the total cost of occupying the space.
| Term | Meaning |
|---|---|
| Floor area | The leased area in square metres, usually taken from the lease document rather than measured on site. |
| Rate per m² per year | The quoted commercial rent rate, expressed per square metre of floor area, per year. |
| Outgoings | Costs passed on to the tenant on top of base rent, such as rates, insurance and common-area upkeep, also often quoted per square metre per year. |
The inputs explained
| Field | What to enter |
|---|---|
| Floor area (m²) | The total leasable floor area of the space, in square metres. |
| Rate per m² per year ($) | The quoted annual rent rate, in dollars per square metre. |
| Outgoings per m² per year ($) | Any outgoings charged on top of rent, in dollars per square metre per year. Leave at zero if the quote is rent only. |
When to use it
Comparing two lease quotes
Two properties quoted at different rates per square metre are only comparable once both are converted to the same total annual or monthly figure, ideally including outgoings for each.
Budgeting for a new office or shop
A monthly rent figure slots straight into a cash-flow budget, which is usually the number a small business actually needs rather than the raw rate per square metre.
Checking a rent review
When a landlord proposes a new rate at a lease review, recalculating the resulting annual and monthly rent shows the real dollar size of the increase, not just the percentage change in the rate.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How annual and monthly rent change with floor area at a fixed rate
The same $300/m²/year rate applied to a range of floor areas.
| Floor area | Annual rent | Monthly rent |
|---|---|---|
| 50 m² | $15,000.00 | $1,250.00 |
| 100 m² | $30,000.00 | $2,500.00 |
| 150 m² | $45,000.00 | $3,750.00 |
| 250 m² | $75,000.00 | $6,250.00 |
| 400 m² | $120,000.00 | $10,000.00 |
| 600 m² | $180,000.00 | $15,000.00 |
How the total cost changes once outgoings are added
A fixed 150 m² space at $300/m²/year base rent, across a range of outgoings rates.
| Outgoings per m²/year | Total annual cost (rent + outgoings) | Total monthly cost (rent + outgoings) |
|---|---|---|
| $0 | $45,000.00 | $3,750.00 |
| $30 | $49,500.00 | $4,125.00 |
| $60 | $54,000.00 | $4,500.00 |
| $90 | $58,500.00 | $4,875.00 |
| $120 | $63,000.00 | $5,250.00 |
| $150 | $67,500.00 | $5,625.00 |
Questions
Why is commercial rent quoted per square metre instead of a flat monthly amount?
It lets tenants and landlords compare properties of different sizes on the same basis, and it makes clear how the total rent scales if the tenant later leases more or less space in the same building.
What is the difference between gross rent and net rent in Australia?
A gross rent quote is meant to include outgoings in the one figure, while a net rent quote is base rent only, with outgoings billed separately. Always check which basis a quote is on before comparing it to another property.
Does floor area mean the same thing in every lease?
Not always. Some leases measure area to the internal walls only, others include a share of common areas under a method such as the Property Council of Australia guidelines. Use the area stated in the lease document, not a rough on-site measurement.
How often does the rate per square metre change during a lease?
Most commercial leases include fixed annual increases or periodic market reviews written into the contract, so the rate at signing is rarely the rate for the full term. Re-run this calculation with the new rate whenever a review takes effect.
For a fixed dollar-per-square-metre building or renovation cost rather than rent, see the concrete volume calculator. To work out material costs for the fit-out itself, the flooring calculator covers boxes and cost for a floor area.