What is a takeover fee?

What the outgoing tenant asks for handing over the unit as it stands: the renovation, the equipment, the time a new tenant saves, and sometimes the running business. It is paid to the outgoing tenant, not the landlord, and the lease is assigned with the landlord's written consent.

How is the range worked out?

The renovation counts over a five-year life, and only for the years the lease (and a renewal option written in it) still leaves the new tenant. Equipment counts at what a dealer would pay for it. Three months of rent stand for the time saved. Goodwill is a year of profit, counted in full only when it is in accounts, 60% with a POS sales report, 25% on the owner's word and nothing without figures.

Why does proof of profit change the price so much?

Because goodwill is the part of a takeover fee that cannot be seen. Fit-out and equipment are in the unit; profit is only a claim until accounts or sales reports back it.

No. It is a rule of thumb to start a conversation from numbers instead of a guess. A busy location, a rare licence or a long lease can justify more; a short lease or no landlord consent, less.

Is the takeover fee fair?

Most takeover fees are a guess. Put in the rent, the lease left, the renovation, the equipment and the profit, and see what the takeover is worth on paper. Owners see what to ask and what raises it; buyers see what to offer and what to check first.

The numbers

Asking takeover fee (S$)

Monthly rent (S$)

Months left on the lease

Renewal option (years, 0 if none)

Only counts if it is written in the lease.

Renovation cost (S$)

Renovation year

Equipment resale value (S$)

What a dealer would pay, not what was paid.

Owner's profit per month (S$)

Profit backed by

Landlord's consent to assign

Common questions

What is a takeover fee?: What the outgoing tenant asks for handing over the unit as it stands: the renovation, the equipment, the time a new tenant saves, and sometimes the running business. It is paid to the outgoing tenant, not the landlord, and the lease is assigned with the landlord's written consent.
How is the range worked out?: The renovation counts over a five-year life, and only for the years the lease (and a renewal option written in it) still leaves the new tenant. Equipment counts at what a dealer would pay for it. Three months of rent stand for the time saved. Goodwill is a year of profit, counted in full only when it is in accounts, 60% with a POS sales report, 25% on the owner's word and nothing without figures.
Why does proof of profit change the price so much?: Because goodwill is the part of a takeover fee that cannot be seen. Fit-out and equipment are in the unit; profit is only a claim until accounts or sales reports back it.
Is this a valuation?: No. It is a rule of thumb to start a conversation from numbers instead of a guess. A busy location, a rare licence or a long lease can justify more; a short lease or no landlord consent, less.