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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