UKC

Say you built a light industrial unit and the cost including land, design, construction etc was £1m and someone with strong covenant was prepared to enter in to a 25 year repairs lease, roughly what sort of yield would you be looking for?

I'm probably misunderstanding the question but wouldn't it simply come down to the size of the unit and looking at rental values of similar sized local properties? 

I could just ask a valuation surveyor, but I’ve not got one to hand at the moment.

Its more the expected yield on the investment than actual square foot values, I know what they are locally.

I’m particularly interested in the relationship between lease length and yield expectation.

I'm no expert, but think you need to know the monthly rental income and treat it as a buy-to-let scenario.

https://www.thisismoney.co.uk/money/buytolet/article-2991821/Buy-let-yield-...

If you don't have long-term loan, then I think you need to look at using an alternative benchmark investment to get a monthly - ie, what would you do with the £1m other than invest in the property (shares, dividends, bonds, cash).

5 to 8%, what may surprise you is that a companies higher covenant strength will often result in you getting less return.

No, I understand that completely lower risk, lower return. Thanks