YOU ASK
My natural breakpoint differs between ARGUS Enterprise and Valuation DCF. The base rent matches. What am I missing?
propfessor.Companion exampleThe short answer
Compare the rent components used in the breakpoint, not just the base rent. In the documented Enterprise 10.1 calculation, base rent, fixed steps and CPI contribute. Valuation DCF lets you select the components. The models can therefore use different rent totals even when the base rent matches.
Base rent only£100k
Base + steps + CPI£115k
£100k base£10k steps£5k CPI
BASE ONLY ÷ 5%£2.0m
ALL THREE ÷ 5%£2.3m
Same base rent. Different inputs to the breakpoint.
Work through it
- Identify the components feeding the natural breakpoint in each model.
- Check whether fixed steps and CPI have been included on both sides. Align the assumptions only where the lease and your modelling approach support it.
- Recalculate and reconcile the breakpoint again. This check does not establish that every other lease assumption matches.
| Illustrative rent components | Rent total | At 5% turnover rent |
|---|---|---|
| Base rent only | £100,000 | £2,000,000 breakpoint |
| Base + £10,000 steps + £5,000 CPI | £115,000 | £2,300,000 breakpoint |
Illustrative arithmetic: relevant rent ÷ 5%. These are invented figures, not a reproduced software report.
WHAT YOU CAN DO NOW
You have a specific assumption to reconcile before changing the rent itself.
Will changing the components reconcile the whole valuation?
Not necessarily. This diagnoses one difference. Review the remaining lease and valuation assumptions separately, and confirm the rules in your software release.
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