Vacancy is the share of a property's or portfolio's lettable space that is not leased, and occupancy is the opposite, the share that is leased to tenants.
Why it matters
Vacant space produces no rent, while the owner usually keeps paying costs such as maintenance, insurance and service charges that cannot be recovered from tenants. In a real estate fund, rising vacancy can reduce income and put pressure on property valuations, which feed into the fund's net asset value.
What to watch for
Look at how vacancy is measured, whether by area or by rental income, and whether the figures include space under refurbishment. Check lease expiry dates, because many leases ending at the same time can quickly raise vacancy. See real estate fund risks and rental yield.
General information. Not investment advice or a suitability assessment.
