How is the rent of a commercial space updated in Peru?

Lease contracts for commercial spaces in Peru are, almost without exception, medium- or long-term contracts (3, 5 or 10 years). Without an update clause, the rent lags behind inflation. The most common practice is to index the rent to the CPI published by INEI, although formulas in dollars or variable rents tied to sales are also common.

Contract framework

The lease of properties for commercial use is governed by the Civil Code (articles 1666 onwards) and by contractual freedom between the parties. There is no mandatory index in Peru for commercial rent adjustments; the parties agree freely and almost always choose INEI's CPI because it is public and traceable.

INEI's CPI

The Instituto Nacional de Estadística e Informática publishes the CPI for Metropolitan Lima and a national index monthly. For commercial contracts, it is best to specify in the contract which of the two series will be used to avoid disputes.

A typical clause:

"The monthly rent will be readjusted every twelve (12) months, on the contract's anniversary date, multiplying the current rent by the factor resulting from dividing INEI's national CPI of the month immediately preceding the update by the CPI of the same month of the previous year."

If the month's CPI goes from 122.4 to 125.7, the factor is 1.0270 and the rent increases 2.70%.

Common variants

Rent in dollars

It is common in San Isidro, Miraflores or Callao Aeropuerto for the rent to be agreed in USD payable in soles at the day's selling exchange rate. In these cases, CPI indexation becomes secondary: what matters is the evolution of the exchange rate.

Mixed CPI + exchange rate rent

An intermediate formula: base rent in soles indexed by CPI, with a floor equivalent to the exchange rate on the day of signing to cover the landlord against sharp depreciation of the sol.

Cap and floor

Cap: the update cannot exceed a percentage (typically 5%–6% annual). Floor: nor can it be less than another percentage (typically 2%). They are reasonable clauses for both sides.

Fixed rent + percentage of sales

In shopping centers and retail formats (Real Plaza, Jockey Plaza, MegaPlaza), a fixed minimum rent is used plus a variable rent equivalent to a percentage of gross sales. The fixed part is adjusted with CPI; the variable depends on business performance.

Step-by-step process to readjust

1. Verify the exact contract clause: index, frequency and caps.
2. Check the CPI series on INEI's portal for the relevant months.
3. Calculate the factor with four decimals and notify the tenant by notarial letter or certified mail, at least 30 days in advance.
4. Issue receipt: if the landlord is a natural person, lease receipt (SUNAT virtual form No. 1683); if a legal entity, electronic invoice with corresponding IGV.
5. Keep proof of notification and the INEI CPI reports used for the calculation.

Practical case: a commercial space in Miraflores

A space on Larco Avenue rents for S/ 9,500 monthly. The contract sets annual readjustment by national CPI, with a 5% cap. On the anniversary date, year-on-year CPI has risen 3.4%. The new rent is S/ 9,823. The landlord notifies the tenant by notarial letter 30 days before and issues the lease receipt for the new amount.

Practical case: an industrial warehouse in Lurín

An industrial warehouse in the Lurín logistics park rents for a seven-year term at US$ 8,200 monthly payable in soles at the day's selling exchange rate. The contract does not apply CPI because the functional currency is the dollar. Every three years a "market adjustment" is made based on the average price per m² of the logistics corridor. The formula combines exchange-rate stability with periodic review.

Tax aspects for the landlord

• Natural person: leasing generates first-category income, with effective rate of 5% on gross income. It is paid monthly with SUNAT virtual form No. 1683.
• Legal entity: leasing is treated as third-category income and the operation is subject to IGV (18%) when invoiced for commercial purposes.

The corporate tenant usually needs the invoice to deduct the rent as an expense. When leasing from a non-business natural person, they support it with the receipt and the proof of IR payment.

Common mistakes

• Applying the readjustment before the anniversary date.
• Forgetting the notarial letter: if litigation arises, the certain date of the notification changes the outcome.
• Mixing indexes without defining priority.
• Agreeing on CPI without specifying series (Metropolitan Lima or national).
• Charging IGV on rents agreed with a non-business natural person: it does not apply.

When it is worth renegotiating the formula

If the contract has been in force for more than five years, if the property has been modernized, or if the corridor where it is located has changed significantly, a renegotiation with professional advice can raise the landlord's income and, at the same time, give predictability to the tenant with a reasonable cap.

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