Graduated rent or index-linked rent – which is better for commercial tenants?

The essentials at a glance

• There is no one-size-fits-all answer – what matters is your inflation outlook and planning horizon: graduated rent offers maximum predictability (fixed euro steps) and protects you in high-inflation phases; with index-linked rent the rent follows the VPI – you carry the inflation risk. ^5,7
• In commercial leases, index clauses are only permissible under the conditions of the Price Clause Act (PrKG) – in particular a de-facto ten-year commitment and symmetry (adjustment in both directions). ^3,4
• New and important: The BGH (ruling of 11 March 2026) additionally subjects pre-formulated index clauses to standard-terms review (AGB control) – a clause that is intransparent or unreasonably disadvantageous is void from the outset, and overpaid rent can be reclaimed. ⁶

First things first: commercial leasing follows different rules than housing

If you search online for "graduated rent" (Staffelmiete) or "index-linked rent" (Indexmiete), you will encounter Sections 557a and 557b BGB almost everywhere. Take note: these provisions sit in the BGB under "Tenancies for residential space" and govern residential rent exclusively. They do not apply directly to your commercial lease. ^1,2

Commercial leasing is governed by freedom of contract: graduated and value-protection/index clauses are freely negotiated between the parties. Their limits, however, are set by two control mechanisms – standard-terms review under Section 307 BGB (for pre-formulated form contracts) and, for index clauses, additionally the German Price Clause Act (Preisklauselgesetz, PrKG). Anyone who understands both models negotiates far more strongly at signing or renewal – especially across multiple sites, where a single clause takes effect across many contracts. ^4,7

Graduated rent (Staffelmiete): fixed steps, full predictability

With graduated rent, the lease already sets out when the rent will rise and to which specific euro amount – for example, "from year 4, €22/m²; from year 7, €24/m²". For residential graduated rent, Section 557a BGB requires that each amount be stated as a monetary sum and that each step apply for at least one year. In commercial leasing this structure is not legally mandated, but it has become established as transparent practice. ¹

From a tenant's perspective, the advantage is obvious: you know your rental costs to the cent for the entire term and can factor them into your site calculations. The increase is decoupled from general price developments. In high-inflation phases this is genuine protection: if inflation jumps into double digits but your steps rise by only 2–3% per year, you pay less in real terms. The price for this: in low-inflation phases, a generously calculated step schedule can end up above actual market developments.

Index-linked rent (value-protection clause): the rent follows inflation

With index-linked rent – in commercial leasing usually called a "value-protection" or "index clause" – the rent is tied to the Consumer Price Index (VPI) for Germany published by the Federal Statistical Office (current base year 2020 = 100). If the index rises, the rent rises; with a correctly worded clause it conversely also falls when the index falls. ⁵

For such a genuine sliding clause (automatic adjustment) to be valid in commercial leasing, the Price Clause Act requires three things: ^3,4,7

1. Reference to an official index (VPI from Destatis or an EU statistical office).
2. Long-term commitment: the landlord must waive ordinary termination for at least ten years, or the contract must run for at least ten years, or you as the tenant must have the right to extend to ten years.
3. No unreasonable disadvantage to either party – in particular, "upwards-only" clauses (rent rises when the index rises but never falls) are not permitted.

Since the PrKG came into force (2007), such clauses no longer require official approval; they are valid to begin with. If a clause is declared impermissible for a PrKG breach, this generally takes effect only from the point at which it is established (Section 8 PrKG), i.e. going forward. ⁴

From a tenant's perspective, index-linked rent is transparent and close to the market – but it transfers the inflation risk to you. In the high-inflation years of 2022/2023, many index-linked commercial rents jumped sharply; anyone who had an index clause in their contract at the time bore the full price increase. In times of low inflation, by contrast, the adjustment turns out to be moderate. ⁵

New: BGH strengthens commercial tenants (ruling of 11.03.2026)

How to spot a flawed clause and when reclaiming is worthwhile – with the specific case and the limitation questions – is covered in detail in Value-protection clause void? Reclaiming rent (BGH 2026).

Graduated rent vs. index-linked rent in commercial leasing – orientation from a tenant's perspective. ^1,3,5,6,7

Which is better for you as a tenant?

There is no blanket answer – it depends on your inflation expectations and your planning horizon. If you need maximum cost certainty and expect rising inflation, graduated rent is usually the more tenant-friendly choice. If you value flexibility and market proximity and assume stable or falling prices, index-linked rent can be cheaper – provided the clause is symmetrical and transparent. For multi-site operations, it is worth looking at the overall effect: a uniform clause across many contracts multiplies both opportunities and risks.

Do you run a medical practice or an MVZ? How Boomerent analyzes long-term practice leases, including index and graduated-rent clauses, is explained on practice rent & service charges for medical practices.