What is rental reversion and why does it matter?
Rental reversion is the percentage change between the old rent on an expiring lease and the new rent on the renewal or re-let of the same space. It is the new rent minus the old rent, divided by the old rent, multiplied by 100.
A positive figure means rents are rising on renewal; a negative one means falling. It shows whether current rents are above or below what the market is paying.
Commonly misread:
- Comparing headline rent without incentives, rent-free periods or fit-out contributions, which change the effective rent.
- Averaging a few large moves across a small number of leases.
- Mixing renewals with new tenants in different conditions.
Track the reversion by property and lease type, and show the number of leases behind each figure so readers can judge its reliability.
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