What means Rent indexation?

After the lease has been concluded, the rent indexation is determined by the percentage increase in the annual rent. In general, the annual rent increase is usually related to the CPI (Consumer Price Index). Sometimes a maximum annual increase (indexation) is agreed.

The aim of the rent increase is to (largely) compensate for the effects of inflation. The indirect return is the unrealized gains in value and proceeds from the sale of the property after deduction of sales costs, taking into account taxes.