Retail leasing laws are quite complex in France. They obey to local rules intended to protect the leaseholder and his business. The protection comes with a « leasehold ownership » established in order to offer the leaseholder the right to renew the lease. Tenants may not be removed from the property where they conduct their business at the term of the lease (usually nine years), except in certain circumstances in which they must be compensated by the landlord. These circumstances include for example: construction, rebuilding, personal occupation if the premises include a residence, or demolition. The owner may also reclaim the premises on serious and legitimate grounds, such as the tenant's failure to pay rent.

The leaseholder, on the other hand has the right to leave the premises at the end of every three-year period. They may also sell the business, including the right to the lease, also known as « key money » at any time during the lease unless otherwise stipulated in the lease agreement.

Rent increase may be applicable on every year, but must not exceed the increase of the National Construction Index. At the end of the lease, landlords are authorized to renegotiate the renewed rental amount. However, it may not exceed a certain ceiling unless they prove there has been a substantial commercial change in the area which consequently favours the tenant and therefore justifies a significant increase. Retail leases of 10 years and more are automatically subject to rental increase at the renewal of the lease based on the local rental market values.

In France, leaseholders who wishes to sell their right to the lease to a new tenant usually claim a « key money » from the new tenant. The « key money » is a relation between the rental amount and the value of the location (« valeur locative »). Its value varies according to several parameters: attractiveness of the location in terms of traffic, rental amount, size of the store and « value » of the lease. Every location has a market value (« valeur locative ») which varies from 100 euros per square meter p.a. in non commercial areas to 10 000 euros on the sunny side of the Champs Elysées.

Our extensive knowledge of the French market enables us to estimate most precisely the « valeur locative » of each location in Paris. International retailers may be confident that our broad local knowledge is a strong asset to finding them the right location at the right price. This is our job!