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Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustment

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    Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustment

    Hi. I'm trying to get Excel to calculate the quarterly rent payable for a 20 year lease which has the following rent review terms:

    1) The base rent of £120,000 p.a. is reviewed 5-yearly to annual CPI
    2) There is a cap and collar applied to this CPI indexation of 1-4% annually, i.e. the minimum escalation per year is 1% and the maximum escalation per year is 4%
    3) Lease start date: 01/01/2023 ; Lease end date: 01/12/2043

    My model includes annual CPI assumption for each year of the cashflow as follows:
    2023: 5%, 2024: 5%, 2025: 0.5%, 2026+ onwards: 2%

    I have successfully applied the 5-yearly review to the CPI growth rates assumed using an interval rent review flag, however I am struggling to apply the cap and collar overlay. Please help - many thanks.

    Template model attached:

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    Re: Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustme

    Modify your existing formula in cell G18,
    G30=F18*(1+MIN(MAX(INDEX($D$7:$H$7,,MATCH(MIN(MAX($D$6:$H$6),G$15),$D$6:$H$6)),$C$30),$D$30))^(1/$C$4)
    Last edited by josephteh; 07-26-2022 at 10:48 AM.

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    Re: Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustme

    Alternatively, G30=F18*(1+MIN(MAX(LOOKUP(G15,$D$6:$H$6,$D$7:$H$7),$C$30),$D$30))^(1/$C$4)

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    Re: Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustme

    Brilliant, a huge belated thank you - this worked perfectly.
    Last edited by AliGW; 08-25-2022 at 11:12 AM. Reason: Please DON'T quote unnecessarily!

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    Re: Calculate rent with annual CPI linked escalation: with Cap & Collar (min/max) adjustme

    Administrative Note:

    Members will tailor the solutions they offer to the version (NOT a release number like 2108) of Office (Excel, NOT Windows) that you have. Please check that your forum profile is up-to-date in this respect. If you aren't sure, in Excel go to File | Account and report what it says below the MS logo at the top of that page. If your version is for Mac, please also state this. Thanks.
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