This Glossary was compiled under the USAID Local Economic Development project as a reference material for the training program on attraction of foreign direct investments.
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Amortization
Anchor tenant / Flag-ship investor
Appreciation
Benchmarking
Brownfield site
Capital gain
Capitalization rate
Cash flow
Certificate of title
Compound interest
Consolidation of title
Covenant
Date of settlement
Depreciation
Developer
Development
Direct costs
Discount (investment) rate
Economic life(cycle)
Environmental impact assessment (EIA)
Greenfield site
Height and density regulation
Industrial park
Investment return
Joint venture
Landlord
Land use
Lease with option to purchase
Lessor
Leverage
Liquidity
Maintenance
Market price
Option
Outgoings
Plot ratio (floor area ratio)
Property wealth
Redevelopment
Remediation
Rezoning
Sale and lease back
Site value
Speculator
Time value of money
Title deed
Yield
Zoning
Amortization
Paying the principal and interest on a loan through regularly scheduled installments. Initially, most of each payment is applied toward interest owed, and later in the loan term increasingly applied toward principal.
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Anchor tenant / flag-ship investor
The big-name tenant in a shopping complex or investor in an industrial park that will attract other tenants and customers.
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Appreciation
An increase in property value triggered by inflation, improvements or increased demand.
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Benchmarking
A tool for continuous improvement that involves quantifying internal performance and then comparing performance against an external group.
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Brownfield site
Formerly developed land that is economically under-used, sometimes vacant, derelict or contaminated.
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Capital gain
Profit an investor makes from the sale of real estate or investments.
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Capitalization rate
The rate at which net operating income is discounted to determine the value of property - one of methods that are utilized to estimate property value. Sometimes the capitalization rate is called discount or investment rate.
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Cash flow
The surplus income, usually charted monthly, flowing into a property investment or business after servicing and operating costs have been deducted. Cash flow on property corresponds to its net operating income.
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Certificate of title
The paper that records property ownership, one copy lodged at the Titles Office, the other with the proprietor; when the property is sold, the Titles Office annotates both copies.
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Compound interest
The interest calculated on both the principal and interest accrued.
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Consolidation of title
When several parcels of land are put together, a new Certificate of Title is issued to replace all the earlier certificates.
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Covenant
An agreement between landlord and tenant, or vendor and purchaser, covering specific things which will be done or cannot be done to a property.
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Date of settlement
The day, under the terms of the contract, when a vendor is obliged to transfer a property to the purchaser.
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Depreciation
1) Drop in a property's value due to passage of time, deterioration, or changes to neighboring properties.
2) The amount you can claim for tax purposes for the replacement of an asset.
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Developer
A person (or an entity) who buys property and by improving it through sub-division, construction etc. lifts its value.
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Development
See Business of developers.
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Direct costs
Site costs (purchase price + legal expenses + commission), plus improvement cost (plans and permits + professional fees + construction).
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Discount (investment) rate
The relative cost with which cash can be obtained and used (borrowed) or relative income that cash can generate (if loaned or invested) in a risk-free manner over time.
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Economic life(cycle)
Often called Project (property) Lifecycle. The potential number of years a property could be profitable.
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Environmental impact assessment (EIA)
An expert's assessment of long-term environmental effects of a particular land-use scheme.
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Greenfield site
Land nearby an urban settlement boundary which has never previously been developed for urban (commercial or industrial) use, or land that has been brought into active or beneficial use for only agricultural or forestry purposes.
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Height and density regulation
A zoning regulation limiting the height and the density of buildings in a particular area.
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Industrial park
A considerable development over a large area tailored to the water, roads, landscaping, etc. requirements of industry.
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Investment return
The rate per month (or year) of return on investment produced by rental and resale.
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Joint venture
Two or more people or companies combine to carry out a project or enterprise.
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Landlord
The owner of a property for leasing.
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Land use
Residential, industrial, etc use of land as determined by zoning regulations.
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Lease with option to purchase
A lease embodying the right of the lessee to buy the property at an agreed price within an agreed time.
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Lessor
The party who grants a lease.
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Leverage
Means putting into a property a low amount of capital, and borrowing the balance to achieve the best return on your capital.
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Liquidity
The ability of an investment to be easily converted into cash with little or no loss of capital and minimum delay.
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Maintenance
The expenditure required to keep a property in an efficient operating condition.
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Market price
Unlike the actual price paid for a property, the market price is an estimate of what the highest price could be should the property be sold on an open market at a given time.
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Option
In selling, the right (secured by a payment) to purchase a property at an agreed price on or before an agreed date. In leases, the right to renew at a mutually agreed rent.
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Outgoings
All expenses on a property.
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Plot ratio (floor area ratio)
In zoning, the ratio of the total area of all floors in all buildings constructed on a plot to the area of the plot.
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Property wealth
The difference between the market value of your properties and the amount of money you owe on them.
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Redevelopment
The updating of urban property, usually by demolition and rebuilding.
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Remediation
Cleanup (removal of contaminated, hazardous parts) of a site to levels determined to be health-protective for its intended use.
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Rezoning
A planning term in which the local authority can alter a planning scheme to allow, say, commercial rather than residential building.
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Sale and lease back
An investor buys a property and leases it back to the seller - a practice which is on the increase.
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Site value
The amount an unencumbered piece of land, less any improvements, is likely to realize at the time of a municipal valuation; the land component of a developed property.
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Speculator
A punter who buys property in the expectation of selling it later for a higher price.
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Time value of money
Time value of money refers to the concept that there is a difference in the value of cash received (expended) now versus its value if received sometime in the future.
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Title deed
The document proving ownership of property. (See certificate of title.)
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Yield
The money you derive by way of income or profit from a property deal.
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Zoning
The method by which councils or planning authorities control uses of land: residential, commercial, industrial, etc.
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