Page 19 - Demo
P. 19
19Clearly there is a tradeoff between the amount of fixedrents and additional duties for tenants. Fixed rents aretypically inflation linked and payable monthly,providing the landlord a steady flow of cash whichremains constant in real terms over the duration (18 ormore years) of the master lease agreement.Besides a fixed rent the lease contract may foresee avariable portion of rent arising from the sharingbetween Tenant and Landlord of given financial results.Trade Off relationships apply here too, with fixed rentdiminishing when the variable rent mechanismsbecome progressively aggressive. Total Rent in Milanmay represent 5.5 % - 6% initial yield or higher.