Commercial lease index 2026: reading and applying indexation

The deadline comes round every year for real estate asset managers and legal departments: on the anniversary date of the lease, the rent indexation must be applied, which requires knowing which index to use, which published value to take, and over what period to calculate it. An error in the index or a poorly drafted clause can be costly: the indexed rent may be challenged, or even the entire clause disregarded by the court. This guide explains how to read the ILC, ILAT and ICC indices in their 2026 version, where to find the official values published by INSEE, how to carry out the indexation calculation step by step, and above all how to prevent the sliding-scale clause (clause d'échelle mobile) from being deemed unwritten.

Three indices for three families of activities

The first step is to identify the index applicable to the lease. The choice is not free: it depends on the nature of the activity carried on in the premises and on what the contract provides. Three indices now structure the indexation of commercial and professional rents.

The ILC, for traders and craftspeople

The commercial rent index (indice des loyers commerciaux, ILC) was created by Decree No. 2008-1139 of 4 November 2008. It applies to leases for commercial and craft activities, that is, to traders registered in the commercial and companies register and craftspeople registered in the trades directory. It is the reference index for the three-yearly review provided for by Article L. 145-38 of the French Commercial Code for these activities.

Its composition has been reformed to limit its volatility. Decree No. 2022-357 of 14 March 2022 removed from its calculation the component linked to construction costs, judged too unstable, in order to refocus the 2026 commercial lease index on the movement of consumer prices. In practical terms, the ILC now mainly tracks inflation, which makes it more predictable from one quarter to the next.

The ILAT, for tertiary activities

The tertiary activities rent index (indice des loyers des activités tertiaires, ILAT) was established by Decree No. 2011-2028 of 29 December 2011. It covers activities not covered by the ILC: liberal professions, offices, logistics warehouses, service activities, laboratories. An accountancy firm, a law firm or a consultancy company located in offices fall in principle under the ILAT.

The boundary between the ILC and the ILAT is a source of disputes. A mixed activity, for example premises housing both a showroom open to the public and administrative offices, requires the main activity to be characterised. The lease must clearly designate the index used, failing which there will be discussion at each indexation.

The ICC, an index that has become residual

The construction cost index (indice du coût de la construction, ICC) published by INSEE long served as the sole reference for commercial leases. Law No. 2014-626 of 18 June 2014, known as the Pinel Law, ended its use for the review of commercial and professional rents in favour of the ILC and the ILAT, precisely because the ICC was subject to abrupt variations unrelated to the rental market.

The ICC has not disappeared for all that. It remains in use in certain older leases whose indexation clause has not been amended, as well as for contracts outside the scope of the commercial lease statute. A landlord managing a historic portfolio will therefore still come across sliding-scale clauses based on the ICC, raising the question of their validity under the Pinel Law. The rules for applying the ICC and the pitfalls specific to clauses referring to it are detailed in our guide to the construction cost index.

Where to find the 2026 indices and on what date

All three indices are calculated and published by INSEE (the French national institute of statistics and economic studies). The official value appears in INSEE's quarterly publications, reproduced in a notice published in the Journal officiel (French official gazette). They can be consulted free of charge on the INSEE website, each index having a dedicated page with the full history of quarterly values and a revaluation calculator.

The publication rhythm follows a stable calendar. The indices are quarterly: each value corresponds to a calendar quarter and is published with a lag of about three months. The value for a given quarter therefore becomes known in the following quarter. To apply an indexation in 2026, it is first necessary to check that the index provided for in the contract for the anniversary date has indeed been published, failing which the calculation must wait for the official publication.

Two points of vigilance deserve attention before any calculation:

• check the reference base of the index: INSEE periodically changes base (for example an updated base 100), which makes it essential to compare indices expressed in the same base or to use the linking coefficients provided by INSEE
• use the exact quarter stipulated in the lease: some contracts refer to the last index published at the indexation date, others to a specific quarter of the year, and confusion distorts the result

Three-yearly review and sliding-scale clause: two distinct mechanisms

Many disputes arise from confusion between two mechanisms which coexist but are not subject to the same rules.

The statutory three-yearly review

The three-yearly review derives from Article L. 145-38 of the French Commercial Code. It may be requested at the end of each three-year period from the date of taking possession or from the last review. The change in rent is in principle capped by the change in the ILC or the ILAT over the same period, which is known as the statutory cap. This mechanism does not operate automatically: it requires a request from one of the parties.

The sliding-scale clause

The sliding-scale clause, also called an indexation clause, is contractual in nature. It provides for automatic revaluation of the rent, most often each year on the anniversary date, by applying the change in the chosen index. It is the operation of this clause that triggers the annual rent indexation without either party having to make a request.

The two mechanisms may coexist in the same lease. The annual contractual indexation must then be reconciled with the statutory three-yearly review. Article L. 145-39 of the French Commercial Code adds a safety valve: where, through the operation of the sliding-scale clause, the rent has increased or decreased by more than a quarter compared with the price fixed by contract or by the last court decision, either party may request a review. This review, known as a review to rental value, then escapes the simple index mechanism.

Calculating the 2026 indexation in practice

The calculation rests on a simple proportion. The revised rent is obtained by multiplying the current rent by the ratio between the new index and the base index:

Indexed rent = current rent × (revision index ÷ base index)

The base index is the one stipulated in the lease as the starting point, often the index for the quarter of signature. The revision index is the one provided for at the indexation date. For an indexation taking effect in 2026, the revision index will be a quarterly value from 2025 or early 2026 depending on the drafting of the clause, once published by INSEE. To anticipate the result of this calculation, see our guide with a commercial rent review simulator based on the 2026 ILC.

Take an anonymous illustration without invented figures. A craftsperson operates commercial premises under a lease providing for annual indexation on the ILC, with the ILC for the second quarter of the year of signature as the base index. On each anniversary date, the landlord applies the formula using the ILC for the most recently published second quarter. If the clause had chosen the ILAT although the activity is a craft activity, or if it mixed the base index of one quarter with the revision index of another quarter, the calculation would be flawed from the outset.

Two control steps are necessary before sending the indexation notice:

• confirm that the base index and the revision index relate to corresponding quarters and are expressed in the same INSEE base
• keep a record of the official publication used, because in the event of a challenge it is for the landlord to establish that the amount claimed is well founded

Avoiding an indexation clause deemed unwritten

This is the most sensitive point for institutional landlords and tenants. A poorly designed sliding-scale clause is not merely ineffective: it may be deemed unwritten, with heavy financial consequences. The action seeking a declaration that a clause is unwritten has been imprescriptible (not subject to any limitation period) since the Pinel Law, codified in Article L. 145-15 of the French Commercial Code, which allows a tenant to raise it years after signature.

The distortion between the period of variation and the indexation interval

The main basis is found in Article L. 112-1 of the French Monetary and Financial Code. This text prohibits indexation clauses which take into account a period of variation of the index longer than the time separating two indexations:

Any clause in a contract performed in successive instalments, and in particular in leases and lettings of any kind, providing for the taking into account of a period of variation of the index longer than the time elapsing between each revision, is deemed unwritten.

In practice, an annual indexation must rest on a change in the index calculated over twelve months, no more. A clause which, on the occasion of an annual revision, applied a change in the index over a longer period creates a prohibited distortion. The case law regularly penalises this mismatch, notably where the base index remains fixed at its original value while the indexation takes place every year, which mechanically results in periods of variation longer than the interval between two revisions from the second year onwards.

The one-way indexation clause

Another frequent cause of nullity lies in clauses which operate only upwards. Some drafting provides that the rent increases if the index rises, but remains unchanged if it falls. The courts consider that such a stipulation distorts the indexation mechanism by removing the reciprocity of the variation, and the clause is deemed unwritten. The risk materialised during periods of index decline: a tenant who discovers that the clause deprived it of the benefit of a decrease may seek its annulment.

Prudence therefore dictates drafting a symmetrical clause, operating upwards and downwards, and strictly aligning the period of variation of the index with the frequency of indexation. A clause which indexed each year on the change in the index recorded between the last known index and the previous one, while guaranteeing reciprocity, clearly makes the arrangement safer.

Choosing an index linked to the activity

Article L. 112-2 of the French Monetary and Financial Code requires that the index used have a direct link with the purpose of the contract or with the activity of one of the parties. For a commercial lease, this link is presumed where the index chosen is the ILC, the ILAT or, for leases which still allow it, the ICC. Using an index unrelated to the activity, for example a sector index unconnected with the business, again exposes the clause to the sanction.

The fate of rent already received where a clause is deemed unwritten is particularly severe for the landlord. When the clause falls, the indexation ceases to have effect and the tenant may claim repayment of sums unduly paid as a result of past revaluations, within the limits of the limitation period applicable to the action for recovery of undue payment. A carelessly drafted clause can thus turn years of indexation into a debt of repayment. The conditions in which the tenant may challenge a sliding-scale clause deemed unwritten and obtain repayment of the indexations paid are the subject of a separate article.

The ILC cap: what remains of it in 2026

In the face of the surge in inflation, Law No. 2022-1158 of 16 August 2022 on emergency measures to protect purchasing power introduced a temporary shield on the ILC for the benefit of small and medium-sized enterprises. This measure capped the annual change in the ILC taken into account for the revaluation of those businesses' rents for a limited period, before expiring.

In 2026, this exceptional statutory cap is no longer intended to apply to current indexations: it targeted specific quarters of the inflationary period and was not made permanent. Two practical consequences follow. First, 2026 indexations apply according to the actual change in the contractual index, without any automatic statutory capping. Second, the reform of the composition of the ILC carried out in 2022, by removing the construction cost component, now acts as a structural moderator of volatility, which makes the ILC easier to read when anticipating the rental budget.

The parties retain the ability to negotiate a contractual cap, for example a clause limiting the annual increase to a specified percentage. Such a clause, provided it respects reciprocity and consistency of periods, escapes the criticisms levelled at one-way clauses and secures the lease relationship over time.

Conclusion

Indexing a commercial rent is not a trivial arithmetical operation. The choice of index, the ILC for traders and craftspeople, the ILAT for tertiary activities, the ICC only for leases which still tolerate it, conditions the validity of the revaluation. But the real fault line is not the calculation: it is the drafting of the sliding-scale clause. A one-way clause, or a clause creating a distortion between the period of variation of the index and the frequency of indexation, is today a time bomb, all the more dangerous because the action to have it declared unwritten is imprescriptible.

The position is clear: a symmetrical clause, aligned on twelve months for an annual indexation and based on an index genuinely linked to the activity, is preferable to an aggressive clause which exposes the landlord to repayment of several years of indexation. Before applying an indexation in 2026, two checks are required: compare the drafting of the clause with Articles L. 112-1 and L. 112-2 of the French Monetary and Financial Code, and confirm on the INSEE website the exact value of the index published for the quarter referred to in the lease. If there is doubt as to the compliance of an existing clause, have it audited before issuing the indexation notice, rather than discovering its nullity at the time of litigation.

Frequently asked questions

Which index applies to a commercial lease in 2026, the ILC or the ILAT?

The choice depends on the activity carried on. The ILC (commercial rent index) covers commercial and craft activities, while the ILAT (tertiary activities rent index) covers offices, liberal professions and service activities. The lease must designate the index used; in the case of a mixed activity, the main activity determines the applicable index.

Where can the official value of the 2026 commercial lease index be found?

The values are published free of charge by INSEE on its pages dedicated to each index, with the full quarterly history, and reproduced in a notice in the Journal officiel. As the indices are quarterly and published with a lag of about three months, it must be checked that the value for the quarter referred to in the lease has been published before any calculation. Changes of base by INSEE should also be noted, as they require the use of linking coefficients.

How is the annual indexation of a commercial rent calculated?

The indexed rent is obtained by multiplying the current rent by the ratio between the revision index and the base index: indexed rent = current rent × (revision index ÷ base index). The base index is the one stipulated in the contract as the starting point, and the revision index is the one applicable at the indexation date. Both indices must relate to corresponding quarters and be expressed in the same base.

Is a sliding-scale clause that operates only upwards valid?

No. The courts consider that an indexation clause excluding a decrease distorts the mechanism by removing the reciprocity of the variation, which means it is deemed unwritten. An indexation clause must operate symmetrically, upwards and downwards, over a period of variation aligned with the frequency of indexation.

What does a landlord risk if its indexation clause is deemed unwritten?

The indexation ceases to have effect and the tenant may claim repayment of the sums paid as a result of the revaluations, within the limits of the limitation period for the action for recovery of undue payment. As the action to have the clause declared unwritten has been imprescriptible since the Pinel Law (Article L. 145-15 of the French Commercial Code), this risk may be raised many years after the lease was signed.

Does the 3.5% cap on the ILC still apply in 2026?

The shield introduced by Law No. 2022-1158 of 16 August 2022 for the benefit of small and medium-sized enterprises was temporary and targeted specific quarters of the inflationary period. It was not made permanent and is no longer intended to apply to current 2026 indexations. The parties may nevertheless negotiate a contractual cap, provided it respects the reciprocity of the variation.

Can the ICC still be used to index a commercial rent?

The Pinel Law of 18 June 2014 removed the ICC from the review of commercial rents in favour of the ILC and the ILAT. The ICC nevertheless remains in certain older leases that have not been amended and in contracts outside the scope of the commercial lease statute. Its presence in a recent sliding-scale clause should lead to a check on the compliance of the indexation with Articles L. 112-1 and L. 112-2 of the French Monetary and Financial Code.