NZ Commercial Rent Review Calculator
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How Rent Reviews Work in NZ Commercial Leases
Fixed Percentage Review
The simplest type of rent review. The lease specifies a fixed annual increase — commonly 2-5%. There are no surprises: both landlord and tenant know exactly what the increase will be each year. This method is straightforward to calculate and cannot be contested.
CPI (Consumer Price Index) Review
Rent increases are tied to inflation as measured by Stats NZ's Consumer Price Index. The calculation compares the CPI at the review date with the CPI at the last review (or lease start). CPI reviews are objective and non-contestable — the number is the number. A common variation is CPI + X% (e.g., CPI + 1%), which adds a fixed margin above inflation.
Market Rent Review
Based on what a similar property would rent for in the current market. The landlord provides an independent valuer's certificate. The tenant has approximately one month to contest. If unresolved through negotiation, each party commissions their own valuation. If the valuers can't agree, the matter goes to arbitration. During the dispute, interim rent is typically the midpoint between the two valuations, with a retroactive adjustment once settled.
Ratchet Clauses
Some commercial leases include a ratchet clause, meaning the rent can never decrease below the current level — even if the CPI calculation or market review would result in a lower figure. This protects the landlord's income stream but limits the tenant's downside protection.
Reference: CPP.nz — Understanding Commercial Leases
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