New Launch - India Real Estate Report 2026.

What is an Occupancy Cost Ratio?

Occupancy Cost Ratio Occupancy cost ratio is financial metric calculating total occupancy costs as percentage of revenue measuring affordability for tenants or operating efficiency for landlords, including rent, utilities, taxes, and maintenance relative to income generated.

Calculation

  • Total occupancy costs divided by revenue
  • Includes rent, utilities, and taxes
  • Expressed as percentage of income
  • Lower ratio indicates better affordability

Industry Standards

  • Retail typically 10-15% of sales
  • Office typically 15-25% of revenue
  • Varies by property type and market
  • Higher ratio indicates affordability pressure

Occupancy cost ratios calculate total occupancy costs as percentage of revenue measuring affordability for tenants including rent, utilities, taxes, and maintenance relative to income.

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