A Market That Plays by Its Own Rules
The French shopping centre emerged in the 1960s and 1970s on the urban periphery, and over the following decades it reshaped how the country shops, how retail property is valued, and how leases are drafted. The concentration of ownership — a relatively small number of institutional investors and foncières control the majority of significant retail schemes — means that lease terms are rarely negotiated from scratch. They are standardised, imposed, and in many cases non-negotiable for all but the largest anchor tenants.
The result is a document that bears the name of a commercial lease and is governed in principle by the same statutory framework as any other, but that in practice operates as a fundamentally different instrument. The standard shopping centre lease transfers to the tenant a remarkably broad range of obligations, costs and risks that the ordinary commercial lease statute would assign to the landlord — all within the limits of what French law permits, and sometimes testing those limits. Every element described below applies within the general framework of the French commercial lease statute (C. com. Art. L 145-1 and following). The mandatory provisions — the right of renewal, the eviction indemnity, the rent review rules, the nine-year minimum framework — continue to apply. The shopping centre lease operates around them, not outside them.
The Destination Clause: Narrower Than You Expect
Every commercial lease in France must specify the permitted use of the leased premises. In a shopping centre, this destination clause is both commercially critical and legally loaded. The landlord has a direct interest in controlling the tenant mix: the success of a shopping centre depends on variety, coherence and the avoidance of damaging competition between neighbouring tenants. The destination clause is the primary instrument through which that control is exercised. The tenant may only use the premises for the activity stipulated in the lease. Any activity beyond that authorised use requires either a contractual permission or a formal process of déspécialisation under Articles L 145-47 and following of the Code de commerce — which are matters of public order, meaning the landlord cannot contractually suppress them.
The destination clause also carries exclusivity implications. If the landlord has granted a neighbouring tenant exclusivity for a particular activity, a subsequent lease authorising a similar use by another tenant violates that exclusivity. Courts have confirmed that a parapharmacy clause authorised in a centre where an existing tenant held exclusive rights over pharmaceutical retail constitutes a breach entitling the original tenant to damages. Third-party tenants who benefit from an exclusivity clause can themselves rely on it in injunction proceedings.
A tenant who enters a shopping centre lease believing it will protect them from competition within the centre — without that protection being contractually guaranteed — may find they have signed a document that offers none of it. If an exclusive commercial environment was a material inducement to contracting, the tenant may be able to argue error on the essential qualities of the leased property, but this requires demonstrating that the absence of competition entered the contract as an agreed and unambiguous quality.
The Rent Structure: Fixed Floor, Variable Top
The rent in a French shopping centre lease is almost never simply a fixed sum per square metre. The dominant structure is the loyer binaire: a guaranteed minimum rent (loyer minimum garanti) combined with a variable additional rent calculated as a percentage of the tenant's turnover. The guaranteed minimum is the rent the landlord receives regardless of how the business performs. The variable element only kicks in when the turnover percentage exceeds the minimum. In practice, minimum rents in established centres are now set at levels that the variable component rarely triggers.
The turnover percentages applied across retail sectors vary considerably: electronics and telephony (6–8%), fashion and personal accessories (6–8%), jewellery and premium food (7–8%), restaurants (5–7%), pharmacies (3–4%), supermarkets and hypermarkets (2–3%), leisure and gaming (3–5%). These ranges are market conventions, not statutory requirements. The turnover definition in the lease is commercially critical: standard clause language captures all sales conducted in, from or via the leased premises — including mail order, telephone, internet and delivery-based sales originating from the location. With the rise of click-and-collect and omnichannel retail, the scope of what counts as turnover for rent purposes has become a significant negotiation point.
The lease will require the tenant to report turnover monthly and annually, with the annual figure certified by an independent accountant or statutory auditor. The landlord has audit rights over the tenant's books. Financial penalties for late or inaccurate reporting are standard: a daily fine for delayed reporting and a lump sum penalty equal to three months' base rent for discrepancies exceeding 0.5 per cent or for obstruction of the audit process.
The pandemic disrupted the standard binary structure. Many landlords and tenants temporarily moved to a fully variable rent — rent set entirely as a percentage of turnover, with no guaranteed minimum — to allow businesses to survive during closure periods. Some larger anchor tenants used their leverage to secure full variable arrangements on a permanent basis as the price of their presence in a struggling centre. This variant remains contractually valid but commercially rare outside distressed situations.
Service Charges: The True Cost of Occupation
In a shopping centre, the rent is rarely the largest financial exposure for the tenant. Service charges — the costs of operating, maintaining and managing the common areas and shared infrastructure — can add 20 to 40 per cent or more to the headline rent. Since the reform of 2014, leases concluded or renewed from 5 November 2014 must include a precise and exhaustive inventory of the charge categories passed to the tenant, information on projected works over the next three years and a summary of works carried out over the previous three, the rules for allocating charges among multiple tenants, and the payment modalities. This is a mandatory requirement under Article L 145-40-2 of the Code de commerce.
The charges typically fall into two categories: general charges relating to structural elements, land, collective services and equipment that benefit all occupants; and specific charges relating to infrastructure and services that benefit only certain tenants. Shopping centres generate additional charges: shared signage and advertising systems, multimedia infrastructure, environmental annex obligations, contributions to any association syndicale libre or association foncière urbaine libre that governs the wider site, and the cost of all promotional and marketing operations for the centre. The taxe foncière and the cost of major structural repairs (grosses réparations) are legally the landlord's burden. The Cour de cassation has confirmed that both are, in the absence of express statutory authorisation, factors that reduce the rental value at review — the obligation to pass those costs to the tenant is an exorbitant clause that depresses the market rental value against which the renewal rent is assessed.
Exorbitant Clauses: The Catalogue
Modification of the leased premises
Under ordinary lease law, a landlord may not change the form of the leased property without the tenant's consent (C. civ. Art. 1723). Shopping centre leases routinely derogate from this rule, granting the landlord the unilateral right to modify common areas, change access routes, extend the centre horizontally or vertically, remove escalators or stairways, and alter the commercialisation plan — all without requiring the tenant's agreement and without any obligation to compensate. The Article 1723 derogation must be express and is interpreted strictly: a structural modification to a tenant's shopfront or the principal access to their unit goes beyond what a tolerance clause can authorise. A tenant who reviews a shopping centre lease and finds broad powers over the physical configuration of the centre should negotiate specific carve-outs protecting their unit's access and structure.
Traders' association and marketing obligations
The lease will almost certainly require the tenant to join and maintain membership of a traders' association or similar body that manages collective marketing and promotional activities for the centre. Since 2003, such clauses have been declared absolutely null as violations of freedom of association (Cass. 3e Civ. 12-6-2003 n° 02-10.778). The Cour de cassation has confirmed that a tenant obliged by such a clause cannot be required to continue paying equivalent sums after the clause is declared null — that would merely give the nullity a theoretical existence devoid of practical effect. For the period prior to the declaration of nullity, mutual restitution applies: the landlord returns the fees collected, the tenant returns in value the services actually received. In practice, many shopping centre operators have migrated to GIEs and marketing funds to achieve the same economic result through technically lawful means. The GIE alternative has been found lawful where membership corresponds to the specific commercial destination of the property and is necessary for the building's normal operation.
French law since 2016 provides that clauses in a contract of adhesion — defined as a contract with a set of non-negotiable terms determined unilaterally in advance by one party — that create a significant imbalance in the rights and obligations of the parties are deemed unwritten (C. civ. Art. 1171). Shopping centre leases frequently state that the parties have negotiated them in good faith. Whether those recitals are accurate is a question of fact that courts will examine on the evidence: draft exchanges, the uniformity of terms across all tenants of the same landlord, and the relative bargaining power of the parties.
What the Landlord Is and Is Not Obliged to Do
A shopping centre landlord is subject to a significantly attenuated set of obligations compared to an ordinary commercial landlord. In the absence of specific contractual commitments, the landlord is not obliged to maintain a favourable commercial environment for the tenant: if neighbouring units become vacant, if anchor stores leave, if footfall collapses, that is not the landlord's legal problem. Courts have consistently refused to impose a general obligation to maintain commercial vitality, ruling that the landlord's basic duties under Article 1719 of the Civil Code are limited to delivering the leased space, maintaining it and ensuring peaceful enjoyment (Cass. 3e Civ. 12-7-2000 n° 98-23.171).
However, the landlord is obliged to maintain the common areas. This obligation flows from Article 1719 of the Civil Code, confirmed by the Cour de cassation as applicable to common areas of a shopping centre or commercial gallery. A landlord who allows the common areas to deteriorate — blocked car parks, broken sanitary facilities, crumbling flooring, defective lifts — is in breach of a legal obligation. Where the landlord has contractually committed to maintaining a favourable commercial environment, courts treat that commitment as an obligation of means, not result.
What the Tenant Is Required to Do
The tenant's obligations in a shopping centre lease extend well beyond paying rent and maintaining the leased unit. Operating obligations are standard: the tenant will typically be required to operate the business continuously and to maintain the premises in a commercially presentable state throughout the lease term. Abandonment of the unit — even temporary cessation of trading while remaining in possession — can constitute a breach entitling the landlord to invoke a clause résolutoire. Opening hours are regulated by the lease: the standard shopping centre lease stipulates hours that align with the centre's collective schedule, and the tenant may not deviate unilaterally. Courts have recognised this as a legitimate constraint given the interdependence of the centre's commercial environment. In the event of permanent closure of the shopping centre itself, the tenant is not required to remain until the last day — the closure of the centre constitutes a change in circumstances that frees the tenant from their operating obligation proportionately.
Whether you are a brand negotiating a first French shopping centre lease, an investor acquiring a retail asset in France, or in-house counsel reviewing a lease packet before signature, the legal and commercial issues in French shopping centre leases require specialist expertise.
Book a ConsultationThis article is for general information and educational purposes only. It does not constitute legal advice. The legal framework described reflects French law and practice as at 2025. French commercial lease law is a complex and evolving field. Always seek qualified legal advice before signing or relying on any lease document.
