Commercial and professional leasing: which benchmark to use?
Verified 30 January 2025 - Directorate for Legal and Administrative Information (Prime Minister), Ministry of Economy
The rent of a commercial or business lease is reassessed on a benchmark basis when the lease contract is revised or renewed. For the commercial lease, the Commercial Rent Index (CLI) or the Tertiary Activity Rent Index (LTI) may be used. For the professional lease, it is the index of the rents of tertiary activities (ILAT) or the index of the construction cost (ICC).
Rent on a commercial lease is revalued every 3 years : this is the triennial review (also called legal review). This revision is automatic and does not have to be mentioned in the lease.
Rent may vary more frequently (e.g. annually) when a sliding scale clause (also known as an escalator clause) is included in the commercial lease.
The rent is also reassessed at the time of renewal of the commercial lease, that is, after 9 years.
It's theactivity concerned which makes it possible to determine whether it is commercial rent index(ILC) or thetertiary activity rent index (ILAT) which serves as a benchmark for the revision of commercial leases.
Please note
Since September 2014, theconstruction cost index (CCI) is no longer a benchmark used for triennial review and commercial lease renewal. The CCI may continue to be used as a benchmark in a sliding scale clause.
Use of the Commercial Rent Index (CLI)
The ILC concerns tenants engaged in a commercial or craft activity and who are registered in the National company Register (RNE) and in the Commercial and business Register (RCS) for traders.
In the context of the commercial rent review, the benchmark used is the Commercial Rent Index (CLI).
The ILC consists of the following:
- Consumer price index excluding tobacco and rent, at 75%
- Construction cost index, at 25%
ILC is calculated for each quarter and published on the Insee website with 2 quarters lag. For example, at the beginning of 3e quarter of a year, the index of 1er Quarter will be published.
Commercial Rent Index (CLI)
National Institute of Statistics and Economic Studies (INSEE)
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FYI
THE ILC cannot be used for contracts concerning the following activities:
- Industrial (factories, factories)
- Exercised in office buildings
- Exercised in logistics platforms, such as warehouses.
To calculate the new rent with the CLI, the calculation model is as follows:
New Rent = Current Rent x (New LCI/LCI for the same quarter last year)
Use of the tertiary activity rent index (ILAT)
It is possible to the tertiary activity rent index (ILAT) for the following activities:
- Liberal and tertiary (e.g., medical or architect's offices)
- Rental of office space (for non-commercial and non-artisanal activities)
- Logistics warehouses
The ILAT shall consist of the following elements:
- Development of non-tobacco consumer prices and rents on all households, up to 50%
- Construction cost price of 25%
- Gross domestic product (GDP) in terms of value, 25%
As with ILC, ILAT is published for each quarter by Insee with 2 quarters lag. For example, the index of 1er quarter will be published at the beginning of the 3e quarter of the year.
Tertiary Activity Rent Index (ILAT)
National Institute of Statistics and Economic Studies (INSEE)
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The calculation of the rent based on the LTI is as follows:
New Rent = Current Rent x (new LTA/LTA for the same quarter last year)
The rent of a business lease is not necessarily reassessed. The law doesn't require it. However, the commercial lease may contain a clause for the revision of the rent during the lease.
The rent for the business lease can be revised based on one of the clues following:
- Tertiary Activity Rent Index (ILAT)
- Construction cost index (CCI): for professional leases promoting rental investment, social housing ownership and land supply development
The index chosen must be related to the activity of one of the parties or to the object of the contract.
Warning
In the absence of a review clause, the amount of rent for the business lease shall remain at even for 6 years.
Use of the tertiary activity rent index (ILAT)
It is possible to the tertiary activity rent index (ILAT) for the following activities:
- Liberal and tertiary (e.g., medical or architect's offices)
- Rental of office space (for non-commercial and non-artisanal activities)
- Logistics warehouses
The ILAT shall consist of the following elements:
- Development of non-tobacco consumer prices and rents on all households, up to 50%
- Construction cost price of 25%
- Gross domestic product (GDP) in terms of value, 25%
As with ILC, ILAT is published for each quarter by Insee with 2 quarters lag. For example, the index of 1er quarter will be published at the beginning of the 3e quarter of the year.
Tertiary Activity Rent Index (ILAT)
National Institute of Statistics and Economic Studies (INSEE)
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The rent calculation based on ILAT is done as follows:
New Rent = Current Rent x (new LTA/LTA for the same quarter last year)
Use of the Construction Cost Index (CCI)
The CCI measures the evolution of the construction price of new buildings for main residential use in metropolitan France.
Like the ILAT, the ICC is published for each quarter by Insee with 2 quarters of lag. For example, the index of 1er quarter is published at the beginning of the 3e quarter of the year.
Construction Cost Index (CCI)
National Institute of Statistics and Economic Studies (INSEE)
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The rent calculation based on the CCI is done as follows:
New Rent = Current Rent x (new ICC/ICC for the same quarter last year)
National Institute of Statistics and Economic Studies (INSEE)
National Institute of Statistics and Economic Studies (INSEE)
National Institute of Statistics and Economic Studies (INSEE)
Chamber of Commerce and Industry of Paris - Île-de-France