The Union of Polish Employers of Trade and Services (ZPPHiU) points out that due to clauses enforced by lessors in so-called green annexes to lease agreements in shopping centres, costs are rising. This results in additional burdens for lessees which often have no economic justification. For instance, landlords often require the replacement of high-quality flooring, shop windows or installations in stores, even though this is not justified by concern for the environment and makes no difference to the customers of shopping centres. Such irrational requirements increase tenant’s costs, affecting profitability or resulting in no profit at all in some properties. Often, renovations are carried out by landlords without notifying tenants and accounted for in shared costs without any agreements with business partners, the tenants who create value for shopping centres.
Existing shopping centres require regular new investments, due to ageing as well as changes in standards imposed by European Union law. Property owners are obligated to ensure safety and compliance with current regulations. Landlords tend to shift their obligations onto tenants who for years have been advocating for partnership in lease agreements, especially regarding proper risk distribution among contract parties.
“From research conducted by Omnisense on behalf of ZPPHiU in September 2024, it shows that customers visiting shopping centres are not interested in the type of flooring in stores, the method of sourcing electricity, the visibility of installations in the ceiling, or the type of glass in shop windows. Meanwhile, these are the kind of demands landlords make to tenants in shopping centres under the pretext of modernisation as part of ESG initiatives. As an association representing store and service point tenants in shopping centres, we’ve long been signalling that we can’t be forced to replace perfectly functioning devices or installations based on alleged ESG directive requirements. Our research shows that customers in shopping centres pay great attention to completely different elements, such as toilets, parking, available stores (tenant mix), etc., aspects largely under the control of shopping center managers. It’s the managers who bear complete responsibility for the quality of these aspects. Elements like toilets or parking are funded by tenants as part of shared costs – their quality and availability in each facility should be of the highest standard,” indicates Zofia Morbiato, General Director of the Union of Polish Employers of Trade and Services (ZPPHiU).
Green annexes to lease agreements in shopping centres can and should be negotiated. The new European ESG requirements apply to property owners, not tenants. Moreover, at this stage of legislation, they don’t mandate modernisation – they merely require reporting actual environmental impact. Therefore, one can’t impose these type of requirements as lease agreement annexes. Tenants have the right and duty to influence the contents of so-called green annexes and to receive carbon footprint information from landlords.
These issues were extensively discussed during the III ZPPHiU and PSNPH Congress, threats as well as solutions protecting and reducing tenant risks in this area were presented. The main topic of the congress was the so-called “green lease agreements” and reducing investment costs through thoughtful contract negotiation strategies and comprehensive cost control. Furthermore, for the first time, research results indicating actual customer expectations of shopping centres were presented.
It’s worth noting that in Polish legislation, there are no separate regulations governing lease agreements for premises in shopping centres. These contracts are signed for conducting business, i.e. to generate profits not only for the center owner but also for the tenant. This is a fundamental difference compared to rental agreements which satisfy housing needs. In all cases, the property owner, not the user, bears investment, legal, or administrative reporting obligations. Measuring electricity consumption also rests with the building owner, as does the obligation to modernise any installations and equipment the property is equipped with. When preparing a lease offer, the lessor should calculate and consider all costs that could burden them during the contract period and accept the business risk associated with ownership.
Source: https://managerplus.pl/zpphiu-zielone-zalaczniki-w-umowach-najmu-obciazaja-najemcow-i-zagrazaja-ich-rentownosci-72211
