Our Client requested advice in the drafting and formalisation of a real estate transaction, consisting in the lease of various properties. This lease was to come into effect once the old existing buildings were demolished and the new properties were subsequently constructed, which were intended to become a shopping centre as the use of the main premises which covered a leased area of approximately 16,629 m2. A leased area of 9,571 m2 was to become the showroom, being the part of the centre dedicated to the sale of products and provision of services in relation to home, workshop and gardening.
The transaction entailed a high level of complexity for our Client resulting from its undertaking of large investment in order to construct the future commercial premises that formed the subject of the lease, and that further necessitated the implementation of a Special Plan as well as to regulate, in a detailed manner, the submission process of the centre with regard to the leaseholder.
Our Office advised the Client in the negotiations and reaching agreement with respect to the lease contract, in coordination with the technical team in charge of developing the construction project of the Shopping Centre and the commercial premises that formed the subject of the lease.
The lease is set for a period of mandatory compliance of up to 10 years by the leaseholder which will allow our Client to recover its investment input and to obtain a profit greater than the current property market average for these types of transactions.
The lease is structured such that obtaining a variable annual income is based on a function of the net sales obtained by the leaseholder for the premises which forms the subject of the lease, fixing a minimum guaranteed annual income of one million, seven hundred and fifty thousand Euros (1.750.000 €) and a maximum of two million, seven hundred and fifty thousand Euros (2.750.000 €).
The Client has achieved the successful finalisation of the lease of various vacant properties which were initially intended for industrial activity and that now, through the lease agreement with an international company dedicated to the DIY, construction and gardening sectors, will be able to renovate the currently vacant properties and, further, obtain a profit from said properties.