What is WALE (weighted average lease expiry) and why does it matter?
WALE (weighted average lease expiry) is the average time left on a property's or portfolio's leases, weighted by each lease's rent or floor area, and investors and lenders use it as a quick read on how long the income is contracted. A WALE of 5.1 years means the rent, on average, is secured for 5.1 more years. Scayled works on the moment WALE cannot describe: when a lease actually ends, it finds 250 to 350 businesses the building suits and the person who signs at each, so the unit is not empty for long.
- How do you calculate WALE?
- Is WALE measured to expiry or to the first break?
- Why do investors and lenders care about WALE?
- What does WALE not tell you?
- How do funds manage WALE?
- Where does Scayled fit with WALE?
How do you calculate WALE?
Multiply each lease's remaining term by its rent, add the results, and divide by total rent. Take three leases: rent of 500,000 with 8 years left, 300,000 with 3 years left and 200,000 with 1 year left. The weighted sum is 4,000,000 plus 900,000 plus 200,000, which is 5,100,000; divided by total rent of 1,000,000 that gives a WALE of 5.1 years.
Weighting by floor area instead of rent gives WALE by area, which is useful when rents differ a lot between units. Conventions on vacant space vary: some reports leave it out, others count it as zero term, so check which method a figure uses before comparing two portfolios.
Is WALE measured to expiry or to the first break?
Both, and the difference matters. WALE to expiry assumes every tenant stays to the end of its lease; WALE to first break assumes every tenant leaves at the first chance. The second figure is the conservative one and is often what a buyer or lender focuses on.
The same measure goes by other names. In the UK it is usually WAULT (weighted average unexpired lease term), in the US often WALT (weighted average lease term), and in Australia and New Zealand WALE, normally stated by income.
Why do investors and lenders care about WALE?
WALE is a shorthand for income security. A longer WALE means more contracted rent before the owner faces re-letting risk, which supports a lower yield and makes debt easier to arrange. Listed REITs in Australia, New Zealand and the UK routinely report WALE or WAULT in their results.
Some loan agreements include a minimum WALE or WAULT test, and valuers use remaining lease term directly when they capitalise income. A short WALE is a prompt to look at the expiry profile, not by itself a sign of a bad asset.
What does WALE not tell you?
WALE is an average, so it hides concentration. One long lease can lift the figure while a cluster of near-term expiries sits underneath it. A lease expiry profile, showing the share of income ending in each year, is the better tool for seeing when the risk falls.
It also says nothing about who the tenants are or whether they will stay. It does not measure covenant strength, how likely each tenant is to renew, or how quickly the space would re-let. A short WALE on a well-located building with rents below market can be an opportunity rather than a risk.
How do funds manage WALE?
The main levers are early renewals and regears, where a tenant extends its term in exchange for an incentive or works; letting vacant space on longer leases; pre-letting space before a current lease ends; and staggering expiries so that not all income rolls in the same year. Acquisitions and disposals change portfolio WALE too.
Speed of re-letting matters as much as term. Each month a unit sits empty after a lease ends is a month at zero income and zero term on that space, so the time between one lease and the next is where WALE management meets cash flow.
Where does Scayled fit with WALE?
Scayled does not calculate or report WALE. It acts when a lease is ending or has ended, which is when WALE drops and the real question becomes who takes the space. From the building's size, use and intended occupier, it lists 250 to 350 suitable businesses nearby and across the market, names the decision-maker at each and drafts the first email. Funds run these campaigns on vacancies and on expiries ahead of them.
Each campaign covers one unit. The Campaign costs US$749 for the Full list, which suits the larger units that move WALE most, or from US$449 for a Focused 100 to 150 businesses on smaller ones, paid once with no subscription. Every email is written as the owner, and Scayled can send them from a mailbox on the fund's own company email for US$299 more, with replies landing with the fund. For the broader approach, see in-house leasing for industrial landlords.
Lease The Vacancy In-House, Before You Appoint An Agent.
The Campaign finds the 250 to 350 businesses the building suits, names the person who decides at each and writes every email, ready in about five days. One payment of US$749 per property, no commission and no subscription. A focused 100 to 150 from US$449.