Outgoings

Outgoings are the recoverable operating costs of a commercial property — rates, insurance, common area maintenance and building services — which under a net lease are paid by the tenant.

How they work

The landlord typically estimates annual outgoings, charges the tenant monthly on account, and reconciles to actual at year end. Recoverable items are defined in the lease schedule.

What is usually recoverable

Rates, water, building insurance premiums, body corporate levies, common area cleaning and maintenance, building management fees, security, and lift and HVAC servicing.

What usually is not

Structural repairs, capital improvements, the landlord's own management or leasing costs, and the landlord's income tax.

Why investors need to watch them

• Rising outgoings effectively reduce the tenant's total occupancy cost tolerance, which can constrain rent growth at review
• Vacant space means the landlord bears that share of outgoings — a partly vacant building costs more than the lost rent alone
• Disputes over recoverability are common and are decided by the lease wording

Common misunderstanding

"Net rent plus outgoings" is the number a tenant actually pays, and it is what determines affordability and re-leasing prospects, not the net rent alone.

Related terms

Last reviewed: 1 August 2026 · General information only, not legal or financial advice.

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