NOI

Net Operating Income (NOI) is a critical financial metric used in the valuation and performance analysis of income-producing real estate, including industrial and logistics properties. It is calculated by subtracting all operating expenses related to the property from its total operating income generated within a defined period, typically one year. Operating income includes rental revenues, service fees, and other recurring income streams directly attributable to the property. Operating expenses encompass costs necessary to maintain and manage the property, such as property management fees, maintenance, insurance, utilities, and property taxes, but explicitly exclude financing costs like mortgage interest, depreciation, and income tax. NOI is a pivotal indicator for investors and asset managers because it reflects a property’s ability to generate cash flow from core operations, independent of capital structure or tax situations. It also serves as the foundation for key valuation metrics, including capitalization rate calculations and investment return analyses. For industrial real estate, particularly in dynamic markets such as Slovakia and the CEE region, NOI provides an objective basis for assessing asset performance, guiding acquisition decisions, lease structuring, and portfolio management strategies.