Yield and net operating income are the two key figures that drive how a property is valued, and most other property KPIs affect one or the other. Here we go through ten KPIs that property managers and asset managers should track, with a definition, formula and worked example for each. All examples use the same made-up office property, so you can see how the numbers connect.
In Swedish, the two headline figures are called direktavkastning (initial or direct yield) and driftnetto (net operating income).
The example property
The figures below are hypothetical and chosen to be easy to follow:
| Item | Value |
|---|---|
| Lettable area (LOA) | 8,000 sq m |
| Heated floor area (Atemp) | 9,000 sq m |
| Rental value | SEK 20,000,000/year |
| Vacant space | 800 sq m, estimated rent SEK 2,400/sq m/year |
| Operating costs (caretaking, heating, power, water, insurance etc.) | SEK 3,200,000/year |
| Maintenance | SEK 800,000/year |
| Property tax (1% of the SEK 140m tax assessment value) | SEK 1,400,000/year |
| Property administration | SEK 600,000/year |
| Market value | SEK 240,000,000 |
1. Net operating income (driftnetto)
Net operating income is the property's ongoing surplus: rental income minus operating costs, maintenance, property tax and property administration. Under the Swedish industry definition in the Fastighetsnomenklatur, the company's central administration is excluded, and the figure should reflect actual cash flows rather than accounting profit (Samhällsbyggarna).
Formula: NOI = rental income − (operating costs + maintenance + property tax + property administration)
Example: Rental income is rental value minus vacancy: 20,000,000 − (800 × 2,400) = SEK 18,080,000. Costs are SEK 6,000,000. NOI is SEK 12,080,000/year.
Track NOI per property and per square metre (here SEK 1,510/sq m) so properties of different sizes can be compared.
2. Yield (direktavkastning)
Yield shows net operating income relative to the property's value. It is the figure most often used to compare and value properties: the market sets a required yield, and value equals NOI divided by that yield. Listed Swedish companies often report yield as rolling twelve-month NOI relative to the fair value of the properties (see for example SBB's definitions).
Formula: Yield = NOI / market value
Example: 12,080,000 / 240,000,000 = 5.0 percent.
Running the formula backwards shows how sensitive value is. If the vacant space is let, NOI rises by SEK 1,920,000, which at a 5 percent required yield means roughly SEK 38 million in higher value.
For comparison, the prime yield for the best office properties in the second quarter of 2026 was 3.75 percent in Stockholm CBD, 4.50 percent in Gothenburg and 4.80 percent in Malmö according to Cushman & Wakefield's MarketBeat. Properties outside prime locations are valued at higher yields.
Yield should not be confused with total return, which also includes the change in value over the year.
3. NOI margin (överskottsgrad)
NOI margin shows how much of rental income is left as net operating income. It is a good measure of how efficient property management is.
Formula: NOI margin = NOI / rental income
Example: 12,080,000 / 18,080,000 = 66.8 percent.
Compare the margin between properties with similar leases. A property where tenants pay their own heating and power will naturally have a higher margin than one where heating is included in the rent.
4. Economic occupancy and vacancy rate
Economic occupancy is rental income relative to rental value. The economic vacancy rate is the inverse: the rental value of vacant space divided by total rental value.
Formula: Economic occupancy = rental income / rental value
Example: 18,080,000 / 20,000,000 = 90.4 percent, meaning an economic vacancy rate of 9.6 percent. Area vacancy is 800 / 8,000 = 10 percent.
We cover the difference between economic and area vacancy, and how to bring it down, in the article on reducing the vacancy rate.
5. Rental value per square metre
Rental value per sq m shows the income potential if everything were let. Tracked over time, it shows whether rent levels keep pace with the market and indexation.
Formula: Rental value per sq m = rental value / lettable area
Example: 20,000,000 / 8,000 = SEK 2,500/sq m/year.
Compare with published market rents for the same district and segment, for example those summarised in our overview of office prices in Stockholm.
6. Operating cost per square metre
Operating cost per sq m shows what it costs to keep the property running. Keep operations (ongoing caretaking, utilities, insurance) and maintenance (restoring function) apart, or a heavy maintenance year will hide inefficient operations.
Formula: Operating cost per sq m = operating costs / lettable area
Example: 3,200,000 / 8,000 = SEK 400/sq m/year. Including maintenance: 4,000,000 / 8,000 = SEK 500/sq m/year.
Pick one area basis (LOA or gross area) and use it consistently. Figures calculated on different areas cannot be compared.
7. Energy use per square metre
Energy use per sq m is both a cost issue and a sustainability measure that tenants and banks ask about. The Swedish energy performance certificate states a primary energy figure per square metre Atemp (Boverket), but for ongoing follow-up, purchased energy per sq m Atemp, normalised for weather, is often enough.
Formula: Energy use = purchased energy (kWh) / Atemp
Example: 1,050,000 kWh / 9,000 sq m = 117 kWh/sq m/year.
8. WAULT
WAULT (weighted average unexpired lease term) shows how long rental income is secured, weighted by rent. A short WAULT means greater vacancy risk in the coming years.
Formula: WAULT = sum (annual rent × years remaining) / total annual rent
Example: Three tenants: A pays SEK 8,000,000 with 5 years left, B SEK 6,000,000 with 2 years left and C SEK 4,080,000 with 1 year left. (40,000,000 + 12,000,000 + 4,080,000) / 18,080,000 = 3.1 years.
Also track the expiry profile, meaning how much of the rent expires each year. Here 23 percent of rent expires within a year, which calls for a plan now.
9. Net letting
Net letting shows whether the portfolio is growing or shrinking in rental income. It is a leading indicator: it shows up before the change hits rental income.
Formula: Net letting = annual rent in new leases − annual rent in terminated leases (for the period)
Example: In a quarter, new leases worth SEK 1,200,000 in annual rent are signed and leases worth SEK 900,000 are terminated. Net letting is +SEK 300,000.
10. Average time to let
Time to let measures how long a unit stays vacant before a new lease is signed. It shows both how much demand there is for the space and how well the letting process works.
Formula: Average time to let = sum of months vacant for let units / number of let units
Example: Three units were let after 4, 7 and 13 months. The average is 8 months. For the example property's 800 sq m, each month means SEK 160,000 in lost rent.
Measure the time in stages (enquiry, viewing, offer, lease) to see where the time goes.
Financial key figures worth knowing
Property managers mainly influence NOI and letting, but two financial figures decide how much the company can borrow and are worth knowing:
- Loan-to-value (LTV): interest-bearing debt relative to property value.
- Interest coverage ratio: profit before financial items (excluding value changes) relative to interest expense.
From measuring to managing
KPIs are only useful when they are followed up with the same definitions, at the same rhythm and with a clear owner. A good setup is to track NOI, economic occupancy and WAULT per property every month, and compare actuals against budget each quarter. We describe how to move from spreadsheets to continuously updated figures in the article on real-time property data.
Several of these KPIs, such as time to let and economic vacancy, depend directly on how fast vacant space reaches the right tenants. That is where Shace can help, with qualified enquiries from companies looking for offices, and landlords can publish vacant space directly from their own systems via API.
Frequently asked questions
How do you calculate the yield on a property?
Divide the property's annual net operating income by its market value (or purchase price). NOI of SEK 12 million and a value of SEK 240 million gives a yield of 5 percent. Valuations often use a normalised NOI, based on market rents and a long-term vacancy level.
What is included in net operating income?
NOI is rental income minus operating costs, maintenance, property tax and property administration. Interest, depreciation and the company's central administration are not included. That is why NOI is used to compare properties regardless of how they are financed.
What is a normal yield for offices?
It depends on location, condition and lease length. In the second quarter of 2026, prime office yields were 3.75 percent in Stockholm CBD, 4.50 percent in Gothenburg and 4.80 percent in Malmö according to Cushman & Wakefield. Properties in weaker locations or with shorter leases have higher required yields.
What is the difference between yield and total return?
Yield only measures ongoing NOI relative to value. Total return adds the property's change in value over the period. A property can therefore have a stable yield but a negative total return in a year when its value falls.
Which KPIs matter most for a property company?
NOI and yield are the foundation, since they drive value. For day-to-day management, economic occupancy, WAULT and time to let are the figures that give the earliest warning of future income loss.
Want to shorten time to let and lower vacancy with tenants who already know what they need? Read more about Shace for landlords.