Definition:

In the context of commercial real estate, yield refers to the annual cash return on the investment, expressed as a percentage of the investment’s initial cost, or less frequently, its estimated current value.

Example:

If you buy a retail property for $750,000 and rent it out for $1,500 a week ($78,000 annually) the annual return on your investment, or your yield, will be 10.4%. This is an example of gross yield, where the running expenses of owning a retail business have not been taken into account.

Commercial properties typically return a much higher yield than residential, generating yields upwards of 7% compared to yields of 4-5% in residential.