2026-10-10 11:22

What happens if a supermarket tenant moves out?

As long as the lease runs, moving out does not release the tenant from the rent: a tenant that closes the store keeps paying until the end of the term (§ 537(1) BGB). The real risk for the owner begins when the lease ends — on expiry, under a special termination right, through a form defect or in the tenant's insolvency. Then a replacement is needed, and the choice is narrow: four groups account for more than 90% of German food retail.

A closed store is not a terminated lease

A tenant that does not use the premises for reasons of its own must still pay; the landlord merely credits the expenses it saves and any benefit from using the property otherwise (§ 537(1) BGB). Chains are generally entitled to sublet a store within their group (see Part 2 of the series German Prime Retail), so one format can open where another has left.

A transfer to a third party is harder: it needs the landlord's consent, and a refusal can cost the landlord the lease. Unless the refusal is justified by good cause in the person of the new tenant, the tenant may terminate with statutory notice (§ 540(1) BGB). For commercial premises, that means notice by the third working day of a quarter, to the end of the following quarter (§ 580a(2) and (4) BGB).

A lease ends early only in a few, predictable cases

Exhibit 1. All five routes to the end of a lease can be checked before purchase

Situation	What happens by law	What to check beforehand
Lease or amendment not in text form	The lease counts as open-ended; termination on roughly six months' notice (§§ 550, 578, 580a BGB)	The complete lease file with all amendments
Consent to a transfer to a third party refused	The tenant may terminate with statutory notice, unless there is good cause for refusal in the person of the new tenant (§ 540 BGB)	Subletting and assignment clauses
Tenant insolvency	The insolvency administrator may terminate on three months' notice to the end of a month, whatever the term; damages rank only as an insolvency claim (§ 109 InsO)	Whether a group company signed the lease and whether it has given a guarantee
Special termination right in the lease	The lease ends on the terms of that clause	The wording of the clause and the period in which it applies
Expiry without renewal	The lease ends (§ 542(2) BGB)	Remaining term, options and the location's prospects

The reliability of whoever signed the lease matters more than the name above the entrance (Part 7). Once the tenant has filed for insolvency, the owner can no longer terminate for rent arrears incurred before the filing, nor because the tenant's financial position has deteriorated (§ 112 InsO).

Reletting runs into the market, the development plan and competition law

The choice of replacement tenants is small: EDEKA, the Schwarz Group (Lidl, Kaufland), REWE and ALDI account for more than 90% of German food retail (Bundeskartellamt, 2025 data). Competition law can rule out the most obvious candidate. In September 2026 the Bundeskartellamt allowed EDEKA to buy 178 tegut stores but barred it for four years from acquiring or leasing — including under a follow-on lease — another 24 sites.

The development plan (Bebauungsplan) for a special zone usually fixes the permitted use, the maximum sales area and often the range of goods. The rules that keep competitors out therefore also limit the building's alternative uses (Part 3). One reason a chain leaves is that the store has become too small for it: if the site cannot grow, the chain may move to a new one (Part 5).

While the property stands empty, the owner bears the costs: the property tax (Grundsteuer) — with possible partial remission of 25% or 50% (§ 34 GrStG) — as well as insurance and maintenance. Loss-of-rent insurance does not help here: it pays the rent while a damaged building is restored, not after a tenant leaves (Part 10).

Implications for investors

1. Check who stands behind the signature. In an insolvency the administrator may terminate on three months' notice to the end of a month, whatever the term, and damages rank only as an insolvency claim. A group company's signature or guarantee therefore weighs more than the name above the door.

2. Find the routes to an early exit before signing. The complete lease file in text form, the subletting clauses and the wording of any special termination rights show what is left of the term in practice.

3. Value the building for the day the tenant leaves. Look at which chains in the catchment could take it over and what the development plan permits. While it stands empty, the owner bears the property tax, insurance and maintenance, and loss-of-rent insurance does not cover them.

What to check:
• Establish who signed the lease, and request the group company's guarantee if there is one.
• Read the special termination rights and the subletting clauses; make sure the lease and every amendment are in text form.
• Calculate the fixed remaining term separately from the tenant's options.
• Compare the use, sales area and range of goods with the development plan, and assess whether the site can take a larger store.
• List the chains in the catchment that could take over the building, and check whether competition rulings restrict them.

Sources: §§ 537, 540, 542, 550, 578, 580a BGB; §§ 109, 112 InsO; § 34 GrStG; Bundeskartellamt press release of 28 September 2026 (EDEKA/tegut); the series German Prime Retail, Parts 2, 3, 5, 7 and 10. Legal position as of October 2026.

Photo: Jan-Philipp Thiele / Unsplash

This page is general information and not investment, legal or tax advice.

Ilya Gordon