Net Yield
Calculate net initial yield after non-recoverable costs and purchaser’s costs.
Introduction
Who this is for: Investors and analysts assessing the true income return on a commercial asset.
Why it matters: Net initial yield is the figure the market actually quotes and the one valuers use. The gap between gross and net is where most amateur analysis goes wrong.
Typical scenario: An investor comparing two multi-let industrial estates needs a like-for-like net yield after costs.
- Omitting purchaser’s costs, which in the UK are around 6.8% and materially reduce the net yield.
- Assuming all costs are recoverable through service charge — empty units and management rarely are.
- Confusing net initial yield with equivalent yield on a reversionary asset.
Inputs
Price & Income
Costs
Analysis
Gross yield is 7.00%, but after £12,000 of non-recoverable costs and £163,200 of purchaser's costs, the net initial yield is 6.09% — a gap of 0.91 percentage points.
This analysis provides context, not financial advice. Consult a qualified adviser before making investment decisions.
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Export
Live Results
Net Initial Yield
6.09%
Gross Yield
7.00%
Net Income
£156,000
Total Outlay
£2,563,200