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calculate NPV of increasing rents with varying multipliers

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  1. #1
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    06-18-2012
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    Excel 2010
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    calculate NPV of increasing rents with varying multipliers

    Morning,

    In short i have a huge list of leases lease's which all have varying terms etc, but the one im having trouble with is the rising/doubling rents and their NPV, Ill use one lease as an example:

    lease start 01/01/2001
    lease length 99
    lease doubles every 25 years.
    Initial rent £175

    So I can work out the next rent review using =IF(AF3="","no RR",EDATE(AC3,CEILING(DATEDIF(AC3,TODAY(),"y")+1,AF3)*12))
    where :
    AF3 = multiplier period, i.e 25 years
    AC3 = Lease start

    Using the above how would i calculate the full NPV for this lease? i know a 2 stage lease with fixed rents i can do:

    ROUND(PV(interestrate,stagelength,(rent*2))/(1+interestrate)^yearsdelayed,decplaces)

    But how would i extend that to do my multi stage increasing rent lease as above!! its tricky

    Cheers

    Chris

  2. #2
    Valued Forum Contributor
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    03-16-2012
    Location
    Aarhus, Denmark
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    Excel 2007
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    Re: calculate NPV of increasing rents with varying multipliers

    You could use =OFFSET() to automatically adjust the period on which you calculate the NPV. Have I understood the issue correctly? Perhaps you could upload a sample workbook?
    Sincerely
    S?ren Larsen

    "Give a man a fish, and you'll feed him for a day. Give a man a fishing rod, and he'll steal your yacht!"

  3. #3
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    06-18-2012
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    Excel 2010
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    Re: calculate NPV of increasing rents with varying multipliers

    http://dl.dropbox.com/u/59808759/ground%20rent%20p...

    here is the link, should work.. ive just put three units in but i have a list of hundreds..

    The cell i want to solve is AF3... which is the PV of the lease to termination. i.e. for the top unit with the doubling rent it should be 13 years at 175, 25 years at 350, 25 years at 700, 24 years at 1400.. now i can go that sum manually with ease, but im not sure how to automate it in excel. i may be being stupid and it is easy.. What i dont want to do it have a huge cashflow, i just want a single cell answer.

    The rising ones i havent got the details of the effect yet so ignore them, and the fixed ones are fixed so are easy.

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