Retail Market for Major Properties Leases?
sector and real estate markets has become
increasingly evident in recent years.
Italian shopping high-streets have
conquered world-wide consumers'
confidence,
commercial properties by fashion brands.
In the Montenapoleone premium location
fashion district in Milan or in the very
brands are ready to pay from 7,000 up
to 10,000 Euro per square meter. For
a store in Corso Vittorio Emanuele in
Milan or at Piazza di Spagna in Rome,
they will pay comparable prices of Euro
3,000/5,000 to Euro 7,000.
to regulate the utilization of stores in
centers of Italian cities are, for the most
part, commercial lease agreements. The
relevant rules are contained mainly in
law n. 392/78 (the "Law") whose features
are and interpretation has always been
protecting the lessee side, likewise a
"weaker" party, against the possible
"abuse of power" of landlords.
Therefore, as a way of example, the
following clauses have been always
considered null and void by the Italian
case law (even in presence of an express
waiver by the lessee):
the minimum duration of the lease;
the lessor a higher rent with respect
to that provided by the law;
the lessor any other advantages in
violation with the law.
side needs to be always protected" does
not consider the economic power of the
retailers involved. This "precautionary"
legislative framework has been recently
"upset" by law n. 164 of November
11, 2014. This law introduced upon
condition that the annual rent provided
in the lease agreement exceeds Euro
250,000 the "freedom of contract"
principle, with the clear intention to
changing times.
It is assumed, in fact, that if the
lessee can bear an annual rent exceeding
the above amount of Euro 250,000, it is
no longer considered in a weak position
and thus it can negotiate on equal terms
with landlords.
After the reform, hence, the parties to
property commercial lease contracts with
a yearly rent higher than Euro 250,000,
are entitled to agree terms and conditions
derogating the provisions of the law,
provided that such property leases do
not refer to premises declared of historic
interest by a decision issued by regions
or municipalities (so called "botteghe
storiche").
agree on the following terms, without
risking the relevant clause to be declared
void:
emption right
advance the right of renewal of the
lease contract;
payment of sum, different from rent,
as "entry fee;"
adjustments and step-rents not linked
to index ISTAT and cap provided by
the law.
Italian historical central high streets
are, the reform seems nevertheless to
embrace a relevant percentage of the
fashion retail business.
Studio legale e tributario since 2013. Her main
areas of practice are mergers and acquisitions,
corporate law and general commercial law
matters, including property law. She represents
and advises Italian as well international
corporations in Italian and cross-border
transactions.
tributario as an associate in 2016. She practices
in corporate law, focusing on commercial
agreements and share and purchase agreements.
Piazza Borromeo, 12
Milan, Italy 20123
+39.02.805.2565 Fax
m.deluca@fdl-lex.it
e.poggioni@fdl-lex.it