CPI Rent Review Commercial Property: How Property Managers Calculate and Run Each Review

Your team pulls the latest CPI figure for a lease review, and it looks nothing like the base number on file. That is not a typo: since late 2025, the ABS has put out the CPI each month on a new base. In this guide to the CPI rent review commercial property managers now run, I show you how to pick the right figure, do the sum and handle limits and notices. Read on for a process your team can run the same way on every lease.

What Is a CPI Rent Review in Commercial Property?

A CPI rent review changes the rent in line with inflation. Inflation is measured by the Consumer Price Index, or CPI. The Australian Bureau of Statistics (ABS) publishes it. The lease sets when the review happens, which CPI figure applies and how to work out the new rent.

The NSW Small Business Commissioner says most retail leases allow a review, usually every 12 months. There are three common ways to do it:

• CPI: The rent moves in line with the CPI figure the lease names
• Fixed percentage: The rent rises by a set rate at each review, such as 3%
• Market review: The rent moves to the current market rent for the premises

I compare these in my guide to commercial rent review methods. The Queensland Small Business Commissioner says fixed and CPI rises lead to fewer disputes. That is likely because the method is clear.

For property managers, the sum is the easy part. The inputs are where reviews go wrong: the wrong series, the wrong base or a missed date. As I said on my show, if you manage properties, you are not only a service provider. You also act as a legal representative of the landlords, and a CPI review is one place where that duty shows up in dollars.

Which CPI Figure to Use After the ABS Changes

The ABS publishes a CPI for each of the eight capital cities. The national figure is a weighted average of the eight. There is no regional series, so a lease for a regional property names a capital city or the national figure.

Your lease names the series it uses. The Small Business Development Corporation (SBDC) in Western Australia gives All Groups CPI for Perth as the kind of wording to look for. It also warns that the chart on the ABS CPI page is a national average, not the figure to use. Its steps for finding the figure were written before the monthly CPI, so use Step 3 below instead.

What Changed in 2025 and 2026

These five ABS changes matter for leases:

• Monthly CPI: Since 26 November 2025, the ABS has released a complete CPI each month. The first release covered October 2025
• Quarterly figures: These are still published for contracts that need them. Each one is now the average of three monthly figures
• New base: Index numbers now use September 2025 = 100. The old quarterly base was 2011-12 = 100
• Indicator stopped: The old Monthly CPI Indicator ended with the September 2025 figures, released on 29 October 2025
• Old figures moved: In January 2026, the ABS re-referenced past quarterly figures to the new base. Index numbers changed, but percentage changes did not, apart from rounding

Monthly and Quarterly Figures Can Differ

The ABS shows that for March 2026, the yearly change was 4.6% on monthly figures and 4.1% on quarterly figures. On a $200,000 rent, that gap is about $1,000 a year. So the lease needs to say which one applies.

As at 13 October 2026, the latest ABS release is from 30 September 2026. It shows the monthly CPI rose 4.0% in the 12 months to August 2026. The next release, due on 28 October 2026, adds the September quarter figures.

This is a training job as much as a lease job. As I say in my compliance episode, “Property laws change regularly.” Data sources change too, so make sure your whole team knows about the new base.

How CPI Is Calculated for Commercial Leases in Australia

There are two common ways to work out a CPI increase. Use the one your lease names.

Some leases add a margin, such as CPI plus 2%, which the SBDC says is often used. In a Queensland retail shop lease, one basis can combine an index and a fixed percentage (s 27(5)(g)). Elsewhere, get advice first.

The Percentage Method

The SBDC sets out the formula: (current rent × CPI percentage ÷ 100) + current rent = new rent. Say the rent is $120,000 a year and the lease uses the monthly CPI’s yearly change to August 2026. That was 4.0%. The sum is $120,000 × 4.0 ÷ 100 = $4,800, and $120,000 + $4,800 = $124,800.

The Index Points Method

Here you compare two index numbers. The ABS guide to using price indexes in contracts shows the steps:

• Step 1: Take the change in index points
• Step 2: Divide it by the starting index number
• Step 3: Then multiply by 100

Take a lease that uses the national quarterly series and compares June quarters. The June quarter 2025 index was 98.43 and the June quarter 2026 index was 102.31, from Table 17 of the August 2026 release. The June quarter 2026 figure came out on 29 July 2026.

The change is (102.31 minus 98.43) ÷ 98.43 × 100 = 3.94%. On $120,000, the new rent is about $124,730. If the lease rounds the change to 3.9%, it is $124,680.

Avoid Mixing Old and New Index Numbers

If the starting index number in your file was recorded before 2026, it may be on the old scale. On that scale, the June quarter 2025 index was 141.7, not 98.43.

Put 141.7 in the same sum with 102.31: (102.31 minus 141.7) ÷ 141.7 × 100 = minus 27.8%. On paper, the $120,000 rent drops to about $86,640. That fall is not real. Prices rose 3.94%, and the gap comes from mixing two scales.

Take both figures from the current ABS table. Keep a copy of the ABS file with each review, because a tenant may ask to see the source figure. As I say on my show, “Document everything.”

Caps, Collars and Ratchet Clauses on a CPI Review

Many leases limit how far a CPI review can move the rent. These are the three common limits:

• Cap: The most the rent can rise at one review, such as 5%
• Collar: The least the rent can rise, such as 2%
• Ratchet: A clause that stops the rent falling below the current rent, even if CPI falls

Take a year where CPI falls by 0.5% on a $120,000 rent:

• Ratchet: The rent stays at $120,000
• 2% collar: The rent rises to $122,400
• 5% cap: No effect, because a cap only limits rises. With no ratchet or collar, the rent falls to $119,400

Apply each limit as the lease words it, and in the order it sets.

Retail lease law can void some of these limits:

• Higher of two methods: A clause like “CPI or 3%, whichever is higher” is void in retail leases in NSW, Queensland, SA, Tasmania and the ACT. In Queensland, a major lessee can opt out. WA’s SBDC says the clause breaks WA’s single basis rule. In Victoria and the NT, it may break the one basis rule
• Collars: No retail law names them. A collar works like a higher of two methods clause. It also stops the rent falling, so a ratchet ban may catch it. Check any collar in a retail lease with a lawyer
• Caps: Queensland’s law expressly allows them. Tasmania’s Code bars a formula that mixes two methods, which may catch a CPI cap. Check any cap in a retail lease outside Queensland with a lawyer
• Ratchets: The rules differ by state, as the table below shows

Outside retail law, the lease wording mostly decides. A 2023 NSW review noted that ratchets are allowed in NSW commercial leases but not in retail leases. In a NSW retail lease, the ban applies where the review could lower the rent.

Another law can reach a non-retail lease. The ACCC sets out the unfair contract terms rules:

• The rule: Unfair terms in standard form contracts with a small business are banned. Penalties apply
• Which contracts: The 2023 rules apply to standard form contracts made or renewed from 9 November 2023. They also apply to terms varied or added from then. Land transactions are included
• Small business: Fewer than 100 employees or annual turnover under $10 million
• Who decides: Only a court can decide if a term is unfair

Is a clause unclear? One of my five compliance steps helps here: “Use legal lease templates. Work with legal professionals or industry standards.”

Retail Lease Rules for CPI Reviews in Each State and Territory

Each state and territory has its own retail lease law. Each one treats a CPI review a little differently.

Some of these laws reach past shops. SA’s covers many commercial leases with rent up to $420,000 a year, excluding GST. The ACT’s covers small commercial premises up to 300 square metres. Victoria’s can cover premises that sell to an end user, including another business.

This table is general information as at October 2026, not legal advice. Whether a lease falls under these laws depends on the premises, the rent and the tenant.

Tasmania has passed a Retail Leases Act 2022. Only two sections are in force, and no start date is set for the rest. For now, the Code still applies.

When to Get Legal Advice

Check with a lawyer before the notice goes out if any of these apply:

• The lease is a retail lease with a collar, a ratchet or a higher of two methods clause
• The lease is a retail lease outside Queensland with a cap or a margin added to CPI
• The lease is unclear on how its limits work together
• The lease names the Monthly CPI Indicator or another stopped series, with no clear backup
• You are not sure whether the retail lease law covers the lease
• A review was missed and the landlord wants to backdate it
• The tenant disputes the figure, the method or the review date

That is a lot of law, but your team does not need to know it by heart. Mark each retail lease in your register with its state. Check its row in the table before each review, and raise any clause on the list above with a lawyer.

What to Check in Your Lease Clause

Before any CPI review, check that the clause answers each of these points. The ABS guide to price indexes in contracts covers most of them:

• Series: Which CPI applies (a city or the national average) and whether it is monthly or quarterly. The ABS suggests naming the series, not a table number
• Base period: The month or quarter the change runs from
• Review period: Which month or quarter’s figure applies at each review date, such as the latest one published before it
• Index base: The period the ABS sets to 100. The ABS warns against tying a clause to one index base, because it can change
• Method: Percentage change or index points
• Review dates: Each date or a clear way to work it out
• Compounding: Whether the change applies to the current rent or the starting rent
• Limits: Any cap, collar or ratchet. Also the order they apply in
• Notice: Whether notice is needed. If so, its form and timing
• Falling CPI: What happens if the index falls. Also whether a later rise catches up
• Backup index: What applies if the ABS renames or stops the series. The ABS suggests every clause has a fallback

These answers belong in your lease register, not in one person’s head. We built our own “roadmaps that unpacked around 1600 tasks” in a rent roll. A CPI review is a small task with a big dollar figure, so it earns its own fields.

In our commercial service list, CPI and scheduled rent reviews are a monthly task. Our assistants prepare them for you to sign off. Our monthly commercial audits include a rent increase audit and an option to renew audit.

Why CPI Reviews Get Missed and What Happens Next

A missed review may not mean lost rent, but it makes the catch-up harder. This is what the laws and regulators say.

• NSW: For retail leases, the NSW Small Business Commissioner says a notice or reminder is not required for an anniversary increase. A late note may mean extra to pay to bring the rent up to date. Check the lease too
• Queensland: The Queensland Small Business Commissioner says a tenant is still likely to owe an increase that is applied late. The oversight of the lessor or agent does not usually release them
• Victoria and the NT: In retail leases, a review is to happen as early as practicable. If the landlord has not started it within 90 days after the end of the time in the lease, the tenant may start it
• ACT and Tasmania: For leases covered by the ACT Act or Tasmania’s retail tenancy Code, no change can be made if the lease does not state the review date. In the ACT, an easy way to work out the date is enough

How far back a landlord can claim depends on the lease and the law.

The sum takes minutes. Keeping track of the review date is the harder job. In my introduction to PMVA, I warned that inconsistency leads to “missing vital key points”.

Building a Systemised CPI Rent Review Process

A good process turns each review into small steps that someone can check. You don’t have to write it all up yourself first. When an agency joins us, “We supply you with best practice blueprints, road mapping every aspect of the tasks, systems and processes that you want to outsource.” This is how I would set out a CPI review.

Step 1: Keep a Lease Register

Record these fields for every lease:

• Tenant, premises and state
• Retail or not, as confirmed by your property manager
• Review dates and review method
• CPI series and period
• Starting index number and its index base, such as September 2025 = 100
• Cap, collar or ratchet
• Notice rules and option dates

Our assistants can track CPI review dates in a lease register. Those dates sit next to option dates and market review windows. This is part of our commercial facilities management support.

Step 2: Diary Each Review Early

In my book, From Stress to Success in Property Management, I call the calendar one of the two key action stations. It is where your highest priority tasks are stored.

I recommend “a digital calendar and not a paper-based diary”. Set the reminder early enough to cover any notice window in the lease.

Then check the next month’s reviews in your weekly review. I suggest a weekly review “mostly so you don’t miss anything important for the week”.

Step 3: Pull the Right Figure

• Download the data table from the ABS release, not the chart
• Find monthly figures in Table 1 and quarterly figures in Table 17
• Match the series name, as table numbers can change
• Save the file with the review

Step 4: Work Out the New Rent

• Use the method the lease names
• Apply any cap, collar or ratchet in the order the lease sets
• Have a second person check the sum

Step 5: Prepare the Notice

• List the series, the figures, the period, the method and the new rent
• Your property manager approves the notice
• The agency issues it in the form the lease sets

Step 6: Update the Rent and Records

Change the rent in your software and invoices from the right date. File the notice, the ABS file and the working together.

Most of a CPI review is admin. An assistant can prepare it while your property manager keeps the decisions:

• What we prepare: The review diary, the ABS figures, the calculation and a draft notice on your template. Once you approve, we update the software
• What stays with you: Reading unclear lease wording, approving the new rent, issuing the notice, talking with the tenant and any legal advice

The buck stays with you too. I was once asked who is responsible when you outsource. I said, “ultimately you will be responsible for the outcomes and results”.

I saw how much admin can move with Phil Jones, Principal of Propel Realty in Brisbane. He came to us managing both residential and commercial property. In 18 months, he moved more than 20 processes to his own assistant. Those were processes across his general admin, not a rent review project.

He was thrilled with the result. In his words, our support “is beyond anything that I’ve experienced before in a company”.

The same split works for other jobs that come round each year. Our guide to commercial property outgoings shows how it works there.

FAQs: CPI Rent Reviews for Commercial Property

Make Every CPI Review Routine

Each CPI review needs the right figure, the right sum, the right limits and a notice on time. The ABS changes make the figure harder, so check the series and base in each lease before its next review. Want help with the admin? Book a strategy session to see which steps an assistant could prepare while your team keeps every decision.