Rent indexation in leases allows the owner of the office space to adjust the rent annually based on the current inflation level. This adjustment typically occurs once a year, most often at the beginning of the calendar year. Rent can thus increase every 12 months, even if the way the office is used or the scope of services remains unchanged.

The lease agreement typically specifies both the specific indexation benchmark and the frequency of its application. In practice, this is an automatic mechanism—the rent is adjusted without the need for an amendment to the contract. This means that the tenant has no ability to influence the change in the given moment.

Jana Vlková, Director of the Office Agency and Workplace Advisory Department at Colliers, explains the indexation mechanism in practice: "Let’s assume that the tenant uses 500 m² of office space and the base rent is 20 EUR/m². With annual inflation at 3%, the base rent rate will increase to 20.60 EUR/m². In practice, this means an additional 3,600 EUR per year, solely due to the indexation. Even with seemingly low inflation, the difference is noticeable, especially for larger spaces or during longer-term leases."

Although rent indexation is a standard part of lease agreements, its specific terms are not set in stone—the scope and method of application are typically subject to negotiation between the contracting parties. Whether signing a new lease or renewing an existing one, it is possible to agree on one of the following options:

• Deferral of the first indexation – the absence of rent indexation for the first 12 or 18 months can reduce operating costs associated with the lease for a certain period.
• Limiting growth in subsequent years (a so-called cap) – setting a maximum indexation level, for example at 5%, regardless of the inflation index value. This helps mitigate the impact of high inflation on the tenant.
• Switching to a more favorable index – from the pan-European HICP to the HICP for the eurozone (EA), which has historically been lower. For tenants with a ten-year lease, this can mean savings equivalent to several months’ rent.
• Including a force majeure clause in the lease – a provision allowing for renegotiation of terms in the event of significant economic changes.

To ensure that provisions regarding indexation are unambiguous and do not raise doubts about their correct interpretation, renters must pay attention to several key elements when drafting the lease. The indexation clause should include the following:

• Precise identification of the index and its source—for example, the HICP All Items for the Eurozone, published by Eurostat for the previous year.
• The frequency and timing of rent increases—most commonly once every 12 months; it is advisable to avoid provisions for more frequent adjustments, such as semi-annual ones.
• Information regarding the possibility of a reduction—that is, whether the rent can be reduced in the event of deflation. Although in practice many landlords do not accept such a solution, its inclusion in the contract clarifies the terms under various market scenarios.

Rent indexation is not just a technical detail in a contract—it is a financial commitment that can amount to tens of thousands of euros in costs over the years for renters. The key is not to avoid indexation, but to set it up so that it is predictable and controllable.

Jana Vlková of Colliers adds: "Tenants often underestimate indexation, but even a seemingly minor adjustment, such as lowering the indexation cap from 8% to 5%, can result in savings exceeding €10,000 over five years for a 500 m² space. We therefore recommend consulting with experts to negotiate terms and include them in the lease before signing, rather than waiting until rent begins to rise."