RESEARCH
EuRopEAn REAl EStAtE HAndbookA Guide to doinG Business in europe
bnp pARibAS REAl EStAtE �
intRoduCtionThis handbook has been assembled by the BNP Paribas Real Estate’s
Large Corporate Coverage Team and the International Research
Team to provide you with a guide to occupying or investing in real
estate in Europe.
even with the creation of the european union, a myriad of different
languages, cultures and real estate practices exist today. Knowledge of
these differences is paramount for planning a successful real estate
strategy. Consideration of how local markets work is equally important
to successful implementation. this publication identifies the main
differences in each major european market and will help you establish
boundaries at the outset of a project.
For each of the countries reviewed in the handbook we provide an
overview on what occupiers and prospective inward investors are likely
to expect for:
typical Lease terms
Legal environment
occupancy Costs
Acquisition Costs
General Market practices
Bnp paribas real estate operates more than 60 offices across europe.
We are a european company and experts in our market place. our goal
is to provide our clients with the best local knowledge with the benefit
of an international perspective. if you have any comments or questions
about this handbook, or Bnp paribas real estate, please contact us.
•••••
Tim Harlow
senior director
Large Corporate Coverage
Bnp paribas real estate
90 Chancery Lane
London, WC2A 1eu
united Kingdom
tel: +44 20 7338 4155
Fax: +44 7747 758289
email:
Christophe Pineau
Head of research
Bnp paribas real estate
32, rue Jacques ibert
92300 Levallois-perret
France
tél: +33 (0)1 47 59 24 77
Fax: +33 (0)1 47 59 21 35
email:
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
bnp pARibAS REAl EStAtE �
Austria .............................................................4Belgium ...........................................................9Bulgaria ........................................................14Cyprus ...........................................................20Czech republic ............................................24denmark .......................................................29estonia ..........................................................34Finland ..........................................................38France ...........................................................42Germany .......................................................47Greece ...........................................................53Hungary ........................................................58ireland ..........................................................62italy ...............................................................67Latvia ............................................................72Lithuania .......................................................76Luxembourg .................................................80netherlands ................................................84
ContEntSnorway .........................................................89poland ...........................................................93portugal ........................................................98romania ..................................................... 103russia ......................................................... 108serbia ......................................................... 112slovakia ......................................................116spain .......................................................... 120sweden ...................................................... 125switzerland .............................................. 130turkey ........................................................ 135ukraine ...................................................... 140united Kingdom ....................................... 144
SuMMARYComparison of leasing costs ..................149Comparison of transactions costs ....... 151
AuStRiA
bElgiuM
bulgARiA
CYpRuS
CzECH REp
dEnMARk
EStoniA
FinlAnd
FRAnCE
gERMAnY
gREECE
HungARY
iRElAnd
itAlY
lAtviA
litHuAniA
luxEMbouRg
nEtHERlAndS
noRwAY
polAnd
poRtugAl
RoMAniA
RuSSiA
SERbiA
SlovAkiA
SpAin
SwEdEn
SwitzERlAnd
tuRkEY
ukRAinE
unitEd kingdoM
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Country Statistics
population (thousands) 8,282
surface area (km²) 84,000
density (per km²) 99
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 289 298 303 291
GDP AnnUAl % 3.3 3.0 1.7 -3.9
net Direct foreiGn inveStment (US$ millionS) -3,049 -736 -6,503 -6,356
lAboUr force (millionS) 3.5 3.6 3.6 3.6
UnemPloyment rAte % 4.7 4.4 3.8 4.7
inflAtion rAte AnnUAl % 1.7 2.2 3.2 0.4
AverAGe reAl WAGeS AnnUAl % 1.0 0.2 -0.1 0.6
GDP Per heAD ($ At PPP) 36,054 37,492 38,810 37,360
lenDinG intereSt rAte 4.2 5.1 5.6 5.4
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Vienna 1,539,848
salzburg 143,973
innsbruck 118,112
Graz 237,810
Linz 203,044
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE �
AuStRiAVienna
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Austria
Political
Austria is a democratic federal republic of nine state
governments and a ceremonial president as head of
state. the Austrian parliament, Bundesversammlung,
is bicameral and consists of the Federal Council (the
Bundesrat) and the national Council. the president
is elected for a six-year term.
Legal Structure
the legal structure is a civil law system. the highest
courts in Austria are the Constitutional Courts. the
Administrative Court handles bureaucratic disputes
and the supreme Court deals with civil and criminal
cases.
Hours of business
the main business hours are Monday to thursday
07:30am – 18:30pm with Friday seeing many
businesses close at 15:00pm.
Visas
Austria is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 6 months.
Transport
the main international airport is Wien-schwechat
(www.viennaairport.com) in Vienna with other
international airports are in Graz, innsbruck,
Klagenfurt, Linz and salzburg.
Austria has an extensive public transport network of
trains, trams and buses. travel details can be
obtained from the national rail network, ÖBB
Austrian Federal railways (www.oebb.at).
International Dialling code
the country code is + 43
Greenwich Mean time +1 hour
eastern standard time + 6 hours
Invest in Austria
Further country information can be obtained from
the invest in Austria bureau: (www.aba.gv.at)
bnp pARibAS REAl EStAtE �
AuStRiA
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Austria
Typical Lease Terms
Legislation: the law that governs
leases is based on the rent Act
(“Mietrechtsgesetz (MrG)”).
Lease Length: terms are either for
a limited number of years
(Befristet) or for an indefinite
period of time (unbefristet). Both
types are possible and can be
agreed on any building. in cases of
buildings constructed prior to 1967
the lease must be “unbefristet”,
even if the parties would rather
agree a limited lease. Between
3 and 7 year leases are typical in
Austria. in cases of “unbefristet”
leases, the tenant will agree a
“Kundigungsverzicht” which is a
fixed period of time in which the
tenant is bound to the lease.
Rent Escalation/Rent Review:
rent in Austrian leases is linked to
the consumer price index, and will
be increased either annually or
whenever the index has increased
by, for example, more than 5%.
rent increases can sometimes be
pre determined in leases. rent
reviews are uncommon, but are
being increasingly used in modern
office buildings with leases of 10
years or more.
AuStRiAGuarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
either a deposit of 3 months gross
rent or a bank guarantee is
necessary to complete the lease.
Rights of Renewal: unless an
option to renew was previously
agreed, leases will terminate at
the date of expiry, and must be
renegotiated. if an option to
renew was agreed, then the
current lease terms and current
rent will typically continue for the
new lease.
Break Options and Terminations:
in “unbefristet” leases the tenant
has full security of tenure. the
landlord cannot terminate the
lease except in cases of the tenant
being in breach of the lease. Break
options are negotiable or some
lease agreements allow for the
premature exit of a lease under
the condition of a penalty. in most
cases the penalty for early lease
termination is subject to
negotiation and depends on
current market conditions.
Tenant and Landlord Obligations:
normally the landlord is
responsible for building
maintenance, structural repairs,
insurance, and technical
installations and the tenant is
responsible for maintenance and
insurance within the premises.
Subletting: the tenant is not
permitted to sublet the premises
without written consent from the
landlord, or unless it has been
otherwise authorized in the lease.
the landlord is not obliged to
accept the subtenant, but in
practice if the subtenant’s
covenant is good, then the sublet
will generally be accepted.
bnp pARibAS REAl EStAtE �
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Austria
AuStRiALegal Environment Concerning
Brokerage Law
Austrian brokerage law is
governed by the innung and
Maklergesetz which states that
companies where agents are
working must have a property
licence. An agent must prove
“Verdienstlichkeit” in order to
receive a fee. in order to fulfil
“Verdienstlichkeit” the agent must
have at least made a written offer
and inspected the property with
the tenant. sometimes this
requirement becomes an issue if
the local management
unknowingly starts viewing
properties with agents that are
different from those instructed by
head office. this may result in the
tenant having to pay multiple
brokerage fees.
in order to avoid this situation the
real estate department of the
tenant must notify local
management not to go to market.
if a tenant has received offers but
has not viewed the property, they
can release their obligations to
pay a fee if they send back the
offers to the agent and formally
reject them.
Where another agent represents
the landlord, it is usual for the
total fee received from the
landlord and the tenant to be
split 50:50 between the two
agents. in some cases there is no
landlord fee and the agent
representing the tenant must
be prepared to give the landlord‘s
agent 50% of the fee he receives
from his client. this can cause a
problem in cases of tenant
representation instructions
as the client may be required to
pay a brokerage fee to the
landlord’s agent.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in euros per
square metre per month and are
paid together with the rent
monthly in advance.
Local Property Tax: paid by the
landlord and invoiced back to the
tenant through the service
charge.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually 3
times the gross monthly rent
(including parking) for a lease
agreement of more than 3
years. For leases between 2 –
3 years the fee is reduced to 2
months’ gross rent and for
less than 2 years the fee is
reduced to 1 month gross
rent.
•
Freehold – Fees are paid by
the seller and are negotiable
but are typically 1.5–3% of the
purchase price.
subletting – same as leasing
above.
Property Transfer Tax (Stamp
Duty) (Grunderwerbsteuer):
For the purchase of a property,
the purchaser will be responsible
for paying a property transfer
tax of 3.5%, which is based
on the purchase price of the
property plus VAt. Also the
purchaser will be responsible
for paying a registration fee
(Grundbucheintragungsgebühr)
of 1.0%, which is based on the
purchase price of the property
plus VAt.
Value Added Tax: the VAt rate in
Austria is 20% and is payable on
all forms of transactions including
rent, building service charge,
agents’ fees, notary costs, finance
tax and property transfer tax.
General Market Practices
Basis of Measurement: there are
two standard measuring
practices:
Net Base Area or NGF (Netto
Geschossfläche). this is the most
commonly used area calculation
and is used for calculating the
rent. nGF includes main usable
space, ancillary space such as
toilets, kitchens, separating walls,
and circulation space. Areas used
for technical use, structural walls
and elevators are excluded.
•
•
bnp pARibAS REAl EStAtE �
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Austria
AuStRiAGross Base Area or BGF (Brutto
Geschossfläche). this area is
measured from internal wall to
internal wall and includes all the
gross area within.
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard with
costs borne by the landlord.
upgrading space to full air
conditioning is the responsibility
of the incoming tenant as only a
top cooling/fan pipe system is
normally installed in new
buildings. When letting second
generation space, the landlord
will assume the costs of installing
partitioning according to a space
plan provided by the tenant.
When vacating premises, the
tenant is responsible for
reinstating the space to the
original condition of the premises.
tenant improvements that were
undertaken during occupancy
cannot be sold to the landlord
unless otherwise stipulated in
the lease.
Use of Space: Cellular and open
plan space are both common.
the use and density of space must
be in accordance with the
“Arbeitsinspektorat”. these
guidelines govern issues such as
the distance from natural light,
position of a desk, position of a pC
on the desk and must be taken
into account when drafting a
workspace plan.
Holidays
there are certain times of the
year when the speed of
transactions is significantly
reduced due to holidays. in May
there are 4 bank holidays,
resulting in very short working
weeks. August and January tend to
generally be the main holiday
periods.
Acknowledgement
We would like to thank natalia
trihob and richard Lemon of
dr Max Huber & partners for
assistance in the preparation of
this country review.
bnp pARibAS REAl EStAtE �
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Austria
Country Statistics
population (thousands) 10,542
surface area (km²) 31,000
density (per km²) 346
Local currency euro
Economic Indicators
Major Cities
City Core population
Brussels (Bruxelles) 960,324
Antwerp 467,875
Ghent 230,446
Charleroi 206,928
Liège 195,201
sources: economist intelligence unit, oeCd, eurostat, un statistics division
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 347 356 359 343
GDP AnnUAl % 3.0 2.6 1.0 -4.5
net Direct foreiGn inveStment (US$ millionS) 7,087 17,122 34,527 40,548
lAboUr force (millionS) 4.9 5.0 5.0 5.0
UnemPloyment rAte % 8.2 7.5 7.0 7.9
inflAtion rAte AnnUAl % 2.3 1.8 4.5 0.5
AverAGe reAl WAGeS AnnUAl % 0.2 1.3 -1.0 0.6
GDP Per heAD ($ At PPP) 33,890 35,510 36,590 35,110
lenDinG intereSt rAte 7.5 8.6 8.0 6.9
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
bnp pARibAS REAl EStAtE �
bElgiuM Brussels
Austria
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
Political
Belgium is a federal parliamentary democracy with a
hereditary constitutional monarchy as head of state.
Belgium is split into three administrative regions:
Flanders, Wallonia and Brussels that have a large
degree of autonomy over their own affairs. the
federal government is responsible for defence,
foreign affairs, justice and the national budget.the
parliament is bicameral and consists of a senate and
Chamber of deputies.
Legal
Belgium’s legal system is based on civil law system
but is influenced by english constitutional theory.
there are 5 levels of justice: Canton (225 courts),
district (27 courts), provinces and Brussels
(11 courts), courts of appeal (5 courts), and the
supreme Court of Justice which is the highest court
in Belgium and deals mainly with appeals.
Hours of business
the main business hours are Monday to Friday
08:30am – 18:00pm
Visas
Belgium is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months.
Transport
the main international airport is Brussels
international Airport (www.brusselsairport.be) in
Zaventem with other regional airports in Brussels
south, Antwerp, Liege and ostend.
Belgium is a railway hub for europe having a
terminal for the eurostar service (www.eurotunnel.
com) to France and the uK plus links to other
european rail networks. travel details can be
obtained from the national rail network, snCB/
nMBs (www.b-rail.be).
Bus and tram information can be obtained for
Brussels from MiVB/stiB (www.brussels.irisnet.be),
for Wallonia from teC (www.tec-wl.be) and for
Flanders from de Lijn (www.delijn.be)
International Dialling code
the country code is + 32.
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Belgium
Further country information can be obtained from
the invest in Belgium bureau:
http://invest.belgium.be
bnp pARibAS REAl EStAtE 10
bElgiuM
Austria
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
bElgiuMTypical Lease Terms
Legislation: Leases are governed
by local Belgian Civil Code. under
the tax law, all lease contracts
have to be registered with the
Ministry of Finance within 4
months following the signature of
the lease agreements. As a result
three copies are normally signed,
one for each party and one for the
administration. Failure to register
means penalties can be claimed
by the tax administration and,
any third party, such as a new
owner who has acquired the
building, will not be bound by
the lease agreement. Both
landlord and tenant have a joint
responsibility for registration
of the lease. the lease contract
has to be registered in one of the
3 national languages (Flemish,
French or German).
Lease Length: the standard term
for regular occupation of leased
premises is 9 years, each party
having the right to terminate the
lease agreement at the end of
three-year period by giving six
months notice. Leases can be
granted for longer or shorter
periods, although anything over
nine years has to be authenticated
and passed by a notary.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the “health” index
(gezondheidsindex/indice santé).
For pre-letting contracts “pre-
indexation” is often used.
Guarantee or Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
normally it is stipulated in the
lease that a rental guarantee
(usually through a bank guarantee
or security deposit) is required.
Rights of Renewal: on lease
expiry the tenant has no security
of tenure. typically it is stipulated
in the lease contract that there is
no automatic renewal of the lease
after the expiry date.
Break Options and Terminations:
Many leases contain break
options, usually after 3 years
and/or 6 years, although this is
only market convention. these
breaks may be for either or both
parties. one party may not
terminate the lease prior to the
break option without the prior
approval from the other party.
Tenant and Landlord Obligations:
under the Civil Code the landlord
is responsible for major repairs
and the replacement of major
installations such as HVAC and
lifts. the tenant is responsible for
small repairs and maintenance
works. Among other things, the
tenant shall regularly maintain
the interior and outside
paintwork, sanitary equipment,
covering, pavements, electrical
devices, doors and windows and
their locks. taxes and insurance
are paid by the landlord and re-
invoiced to the tenant.
Subletting: the tenant may
assign or sublet the lease unless
forbidden by the terms of the
lease. nevertheless, most of lease
agreements mention that is not
permitted to sublet or assign the
lease without written consent
from the landlord.
bnp pARibAS REAl EStAtE 11
Austria
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
Legal Environment Concerning
Brokerage Law
individual real estate brokers
need to be registered with the
Belgian institute for real estate
(BiV/ipi) to practice in Belgium.
every company acting as broker
should be legally represented by
at least one managing director
listed with the Belgian institute
for real estate.
real estate brokers are selected
by either the landlord or the
tenant and will sign an agreement
to represent their client in a
transaction. it is common practice
in Belgium that real estate
brokers are appointed and paid
by landlord. it is considered a
conflict of interest if an agent
represents both the landlord
and the client, and the agent is
obligated to indicate if a conflict
of interest exists.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per annum and
are typically paid quarterly in
advance.
Service Charge: service charges
are quoted in euros per square
metre per annum and are paid
together with the rent quarterly
in advance, based on a provisional
amount, which is adjusted at least
once a year once the actual cost is
known. All private costs (such
water and electricity supply) are
directly charged to the tenant.
Local Property Tax (Onroerende
Voorheffing/Précompte
Immobilier) and Regional Taxes:
these taxes are paid by the
landlord on an annual basis and
re-invoiced to the tenant.
Other Taxes/Costs: in some cases
other taxes such as office tax, tax
per workstation, or tax on energy
can be levied. these are local
taxes and depend on the
municipality where the property
is located.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are negotiable
with the usual rate being 15%
of the first year’s gross rent.
Fees are usually paid by the
landlord but could be paid by
the tenant depending on
whom the agent represents.
Freehold – Fees are usually
paid by the seller and are
negotiated on a case-by-case
basis depending on the
purchase price. Fees are
usually between 1-3% of the
agreed purchase price.
•
•
subletting – Fees are
negotiable and can be based
on a percentage of the first
year’s gross annual rent
(typically 15%) or on a
percentage of the savings
made through the early
surrender.
Property Transfer Tax
(Registration Tax): the purchaser
of a property is responsible for
paying a registration tax in the
region of acquisition. the
registration tax is different for
each region. in Flanders the
registration tax is 10%. in some
circumstances, 60% of the
registration costs may be
recovered if the property is sold
within 2 years of buying it. in
Wallonia and Brussels the
registration tax is 12.5%.
developers often operate under
trader or “marchand de bien”
status (i.e. company or individual
whose business mainly consists of
buying and selling real estate, and
who is registered as such) with
reduced registration tax rate.
one of the common ways to avoid
registration tax is to acquire the
real estate through the purchase
of company shares, which carries
added advantages in that capital
gains on shares are generally tax
exempt for individuals as well as
companies. Another way to reduce
the registration tax is not to buy
the real estate but rather opt for a
long term lease (for a duration of
•
bElgiuM
bnp pARibAS REAl EStAtE 1�
Austria
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
minimum 27 years and maximum
99 years) or for a right to build (of
maximum 50 years) on the real
estate. the granting of such rights
is subject to a registration tax rate
of 0.2% calculated on the total
amount of the rents and charges
for the duration of the contract.
Value Added Tax: VAt in Belgium is
currently at 21%. rent payments
are not subject to VAt. the renting
of parking space where the tenant
has his main occupation elsewhere
is considered as the provision of a
service rather than a letting and is
therefore in the VAt regime. the
renting of warehouses where
offices constitute less than 10
percent of the total space is also
subject to VAt.
VAt is payable on acquisition
of new building and construction
for new commercial property
(lesser rates exist for residential)
as well as professional fees and
letting fees. on the acquisition of
land no VAt is paid but
registration tax is payable.
General Market Practices
Basis of Measurement: two
methods, which are very similar,
are used in Belgium to define the
floor area. the first method is
according the uGeB-uLeB
(Belgian union of Chartered
surveyors) and the second
method is according the BACs
(Belgian/Luxembourg Association
of Chartered surveyor).
uGeB-uLeB – For the
measurement of office
buildings, the gross area is
used and a proportion of the
common general area of the
building (entrance hall, lobby
area, elevators) is included.
the gross area is measured
from the exterior of the
windows and the axis of
separating walls.
BACs – uses two main
definitions, which are gross
external area (GeA) and the
gross area (GA). GeA is the
area in the building measured
externally at each floor level.
GeA is applied for the
measurement of industrial
buildings and warehouses and
residential buildings. GA is the
area of the building measured
from the midpoint of the
windows to the midpoint of
the opposite wall for each
floor level. GA is applied for
the measurement of offices
and is also the basis for
measurement commonly used
for the calculation of the rent
and service charges.
Fit Out/Reinstatement/
Dilapidations: inventories of
fixtures upon entry and upon
vacation of the premises, plus
movable items, are drawn up and
permanently binding for both
parties. office buildings usually
include carpet, suspended ceilings,
lighting, heating and electrical
servicing. partitioning and
•
•
upgrading of the office space is at
a cost to the tenant. All works,
installations and additions that
the tenant may undertake on the
premises during the lease require
prior approval from the landlord.
they shall at the end of the lease
or at the end of renewal period,
belong to the landlord unless the
latter demands the return of the
premises to their original state.
restoration to the original state is
at the tenant’s cost.
Use of Space: premises in Belgium
is primarily cellular office
construction but open plan office
premises are increasingly favored.
Holidays
there are no times of the year in
which the speed of transactions
are reduced due to holidays. in
the period between Christmas
and new Year some offices are
closed but generally firms will
remain open all year round.
bElgiuM
bnp pARibAS REAl EStAtE 1�
Austria
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
Country Statistics
population (thousands) 7,699
surface area (km²) 11,001.9
density (per km²) 69.4
Local currency Leva
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 77 81 86 83
GDP AnnUAl % 6.3 6.2 6.0 -3.8
net Direct foreiGn inveStment (US$ millionS) 7,390 8,696 5,950 3,350
lAboUr force (millionS) 2.6 2.6 2.7 2.5
UnemPloyment rAte % 9.6 7.7 6.3 9.5
inflAtion rAte AnnUAl % 7.3 8.4 12.3 3.5
AverAGe reAl WAGeS AnnUAl % 2.1 11.3 9.2 -0.5
GDP Per heAD ($ At PPP) 10,400 11,400 12,450 12,140
lenDinG intereSt rAte 8.9 10.0 10.9 11.1
exchAnGe rAte to US$ 1.5576 1.4290 1.3305 1.4733
Major Cities
City Core population
sofia 1,138,629
plovdiv 340,142
Varna 299,492
Burgas 195,098
rousse (ruse) 166,885
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1�
bulgARiAsofia
Austria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Belgium
Bulgaria
Political Structure
Bulgaria is a parliamentary republic with a directly
elected president as head of state who serves a
5 year term. the primary legislative body, the
parliament, is unicameral and called the national
Assembly (narodno sobranie).
Legal Structure
Bulgaria’s civil and criminal law is based on roman
civil law although the judiciary is independent and
has equal status with the legislative and executive
branches. the judicial system is managed by the
supreme Judicial Council and consists of regional
courts, district courts, and the supreme courts of
cassation for civil and criminal appeals
Hours of Business
Businesses usually open around 08:30am and close
around 18:00pm.
Visas
Bulgaria is now an eu member so holders of an eeA
(eu Member states, iceland, Liechtenstein and
norway) or swiss passport do not require a visa.
nationals from eu-countries as well as switzerland
and Liechtenstein may remain for an unlimited time.
Citizens of the united states of America do not
require a visa for entry. Foreigners who stay or
intend to stay longer than six months may acquire
permission for temporary residence for up to one
year which may also be extended. Any foreigner
wishing to stay on the basis of an employment
contract must acquire a work permit from the local
Labour office.
Transport
sofia airport (www.sofia-airport.bg) is the main
international airport and located about nine
kilometres from the city centre. there are no direct
rail services between Bulgaria and Western europe
but there are daily services to Belgrade, Bucharest
and Budapest, istanbul and thessalonika.
there is over 6,000 km of railways of generally good
quality connecting all the main towns. information
on travelling by rail in Bulgaria can be obtained from
the Bulgarian state railways BdZ eAd website
(http://bdz.creato.biz)
International Dialling Code
the country code is + 359.
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the invest Bulgaria bureau:
www.investbulgaria.com
bnp pARibAS REAl EStAtE 1�
bulgARiA
Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Bulgaria
bulgARiATypical Lease Terms
Legislation: Leases are governed
by the Bulgarian Law on
obligations and Contracts/state
Gazette issue no 275/1950/. there
is no special law concerning
commercial leases.
Lease Length: no minimum initial
lease length is legally prescribed
but the maximum lease length is
10 years. if a longer term is
negotiated in a contract, the
extension clause is legally
considered null and void with the
law only recognising the first ten
10 years. in practice negotiation of
10 years lease is difficult as most
landlords do not feel secure and
prefer leasing for a shorter period.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Harmonized index of
Consumer prices (HiCp) published
by the Bulgarian national statistic
institute. the basis of rent
escalation is freely negotiable and
in the past escalation using the
eurostAt index of consumer
prices was not uncommon.
However, over the last few years
the accepted norm is for
escalation is the Bulgarian HiCp
with a minimum of 10%. it is not
uncommon, especially for big
companies with mostly office
space, to have rental adjustments
after 5 years on the basis of a
market survey of rents.
Guarantee and Security Deposit:
Generally a deposit of 1 to 3
months gross rent is payable
upon the signing of the lease
contract.
Rights of Renewal: options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may be
automatically renewed for an
indefinite period, if the tenant
continues to use the property
after the end of the lease and
there is no objection by the
landlord.
Break Options and Terminations:
Break options and termination of
lease contracts for a definite term
have to be negotiated between
the parties along with
compensation. Lease contracts for
indefinite term may be terminated
by any of the parties with one
month pre-notice.
in case of transfer of the leased
property on part of the landlord
(sale, liquidation, foreclosure,
inheritance) the lease contract
shall be valid and binding the new
owner if it is registered in the real
estate register with the
recordation Agency. if the lease
contract is not registered but has a
notary authenticated date of
signing, it shall be valid and
binding on the new owner until
either the expiry date or one year
following the property transfer
date. if the lease contract is not
registered or notary authenticated,
it is valid and binding on the new
owner for an indefinite term and
can be terminated with one month
notice.
Tenant and Landlord Obligations:
tenant obligations are for internal
repair and maintenance whilst
landlord obligations are for
external and structural repairs.
there are no standards for
insurance clauses so most lease
contracts do not deal with it. But
it is common, especially for big
landlords with mostly office
space, to oblige the tenant to
obtain full property insurance for
the premise.
Subletting: Full subletting is
allowed only with the written
consent of the landlord. such
consent may be given in general
form as a clause of the lease
contract. partial subletting is
allowed without consent of the
landlord unless the lease contract
explicitly prohibits it.
bnp pARibAS REAl EStAtE 1�
Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Bulgaria
Legal Environment Concerning
Brokerage Law
there is no law or regulation of
the activities of real estate
brokers in Bulgaria. Law is under
preparation and it will introduce
licensing of the brokers based on
educational and professional
experience requirements.
unless the agent has signed
brokerage service agreement with
the client in advance, there is no
guarantee of payment by the
client if the latter signs a lease or
sale-purchase agreement for
property introduced by the agent.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are usually quoted in
euros per square metre per month
and are paid monthly in advance
either in eur or in BGL fixed rate
equivalent.
Service Charge: Building service
charges for commercial leases
vary between 1 to 3 euros per
square metre per month, and in
some cases like Malls it may
reach up to 6 euros per square
metre. usually service charges
are paid monthly in advance with
the rent. For residential property,
fixed service charge is applied
only for modern buildings or
complexes that have
arrangements with a property
management company. For flats
in other residential buildings
service charge is not paid to the
landlord but there is a common
space maintenance fee collected
by the building chairperson that is
substantially lower.
Local Property Taxes and
Municipal Garbage Fee: the lease
contracts usually commit tenants
to paying the garbage fee for the
property. payment of the local
property tax by the tenant is rare.
the property tax and the garbage
fee are determined by the
municipal council of the
respective city at the end of
February each fiscal year. the
property tax and the garbage fee
are charged for non-residential
property of companies upon the
accounting value of the property.
For the property of individuals
and for residential property of
companies, the charge is based on
the tax assessment value of the
property. that is determined by
the municipal body on a yearly
basis and is lower than market
value. For 2009 the property tax
in sofia is 1.6 per thousand.
there are three ways of
determining the garbage fee for
non-residential property of
companies: (i) on the basis of the
number of garbage collection bins
used; (ii) through direct
negotiation with a company
contracted for garbage collection
and, (iii) on the basis of the tax
assessment value of the property..
For year 2009 the garbage fee for
non-residential property of
companies in sofia 12 per
thousand and for property of
individuals and for residential
property of companies – 4 per
thousand.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually
1 month’s net rent plus VAt.
Freehold – Fees are usually
between 2.5% and 3%. For
reasonably large transactions
lower fees are negotiated,
depending on the size of the
property involved, the
particular market
characteristics at the time
etc., but even in these cases
fees below 1% of the
transaction value are
uncommon.
sublease – same as leasing
fees above.
•
•
•
bulgARiA
bnp pARibAS REAl EStAtE 1�
Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Bulgaria
it should be noted that it is
not uncommon in Bulgaria for
agents to get paid by both parties
in a transaction.
Property Transfer Tax: For
purchases of property, the
transfer tax depends on the
municipality and ranges between
1.3% to 2.6% of the purchase price
or the tax assessment value of the
property exchanged, whichever is
higher. the exact percentage is
determined by the municipal
council of the respective city. For
sofia the property transfer tax for
year 2009 is 2.5%. the law states
that purchaser is liable for the
property transfer tax unless other
terms are negotiated between the
parties. it is common for this tax
as well as the other expenses for
the transfer to be shared between
the parties.
if the tax assessment value of the
property is substantially lower
than its market price, it is usual for
schemes that avoid payment of the
property transfer tax on the real
price to be applied. For
transactions between individuals
and for sale of property from
construction companies to
individuals, the prices defined in
the notary deeds for the property
transfer are usually equal to the
tax assessment value. in such
cases other agreements or legal
schemas are used for protection of
the parties with respect to the
payment of the real price. it is not
uncommon for owners to hide the
real price, not just for the property
transfer expenses but also for
avoiding payment of income tax.
VAT: VAt in Bulgaria is currently
20%. VAt is applicable on regulated
land owned by legal entities
registered for VAt. rents for
residential needs are excluded of
VAt. individuals, who offer
property for lease, do not accrue
VAt in case the income from leases
does not exceed BGL 50,000 per
year (circa eur 25,000).
Other Taxes/Costs: to finalise the
purchase of a property a notary
fee is paid, determined on a scale
based on the purchase price, but
not exceeding BGL 6000 (circa
euro 3,000). the other cost is the
fee for registration of the deal in
the real estate register with the
recordation Agency, which is 0.1%
on the purchase price. usually the
purchaser assumes these costs,
but it is common to be shared
between the parties.
there is also an obligatory
minimum of legal fee for
transactional assistance, which is
BGL 700 for the first BGL 100,000
of the purchase price and 0.1%
over the excess amount. Legal
due diligence fees are separate
and usually determined on
hourly bases.
General Market Practices
Basis of Measurement: there is
no standard basis of
measurement in Bulgaria. For
leases, the premises are typically
measured based upon the built up
area stated on architectural plans
for planning approval. For
property purchases construction
companies imposed Gross Area as
basis of measurement, which
includes the built up area and the
proportional part of all common
space areas of the building, which
may reach even 30% of the built
up area of the premises.
bulgARiA
bnp pARibAS REAl EStAtE 1�
Austria
Belgium
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Bulgaria
bulgARiAFit Out/Reinstatement/
Dilapidations: the tenant is
typically responsible for all costs
associated with fit out. While the
tenant has a legal responsibility
to remove improvements from the
premises at the expiry of the
lease, in practice this is rarely
required as the majority of
landlords prefer the
improvements to remain. tenant
is responsible to repairing any
dilapidations, unless it is proven
that the damages are caused a
way that tenant may not be held
responsible by law or contract.
Use of Space: traditionally older
offices in Bulgaria have tended to
be constructed as cellular offices.
recently, in newer buildings,
offices are predominantly
open plan.
Holidays
there are two periods during
the year when the speed of
transactions are significantly
affected by holidays in August
and from Christmas till mid
January. part this is because the
real estate register with the
recordation Agency does not
provide the full range of services
over these periods.
Acknowledgement
We would like to thank
Konstantinos Markogiannakis
and Anna nazou of danos &
Associates for their assistance in
the preparation of this country
review.
bnp pARibAS REAl EStAtE 1�
Austria
Belgium
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Cyprus
Bulgaria
Country Statistics
population (thousands) 772.549
surface area (km²) 9,250
density (per km²) 83.5
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 19 20 21 21
GDP AnnUAl % 4.1 4.4 3.7 0.7
net Direct foreiGn inveStment (US$ millionS) 975 1018 364 342
lAboUr force (millionS) 0.4 0.4 0.4 0.4
UnemPloyment rAte % 4.5 3.9 3.6 4.8
inflAtion rAte AnnUAl % 2.5 2.4 4.7 1.0
AverAGe reAl WAGeS AnnUAl % 3.4 1.0 1.1 2.8
GDP Per heAD ($ At PPP) 22,610 27,100 28,420 28,490
lenDinG intereSt rAte 6.7 6.8 7.2 8.0
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
nicosia 197,800
Limassol 157,600
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE �0
CYpRuSnicosia
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Cyprus
Political Structure
Cyprus is a presidential republic but since 1974
the country has been divided into a government
controlled south covering two thirds of the island
and a northern third controlled by a turkish Cypriot
government. the government of the republic of
Cyprus is the international recognised authority
and referred to here. the head of state is the
president who is directly elected to serve a five
year term. the legislature in Cyprus is known as
the House of representatives (Vouli Antiprosopon)
and is unicameral.
Legal Structure
Cyprus’ legal system is based on english common
law with influences from civil law. Civil and criminal
cases are heard in district courts with appeals heard
in the supreme Court. specific civil issues may be
heard in the rent Control tribunal, the industrial
disputes tribunal and the Family Court. Criminal
offences that warrant a sentence of more than 5
years are usually head in the Assize Courts.
Hours of Business
Businesses usually open around 08:30am and close
around 18:00pm.
Visas
Cyprus is now an eu member so holders of an
eeA (eu Member states, iceland, Liechtenstein
and norway) or swiss passport do not require
a visa. nationals from eu-countries as well as
switzerland and Liechtenstein may remain for an
unlimited time. Citizens of the united states of
America do not require a visa for entry. Foreigners
who stay or intend to stay longer than three months
must acquire a residency permit from the Civil
registry & Migration department.
Transport
Cyprus has two international airports Larnaca
international Airport and paphos international
Airport (www.cyprusairports.com.cy), located
5 kilometres and 10 kilometres from their
respective city centres.
Cyprus does not have a rail network so the majority
of transportation around the island is by air, private
bus, and car or by boat.
International Dialling Code
the country code is + 357
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the Cyprus investment promotion Agency:
www.cipa.org.cy
bnp pARibAS REAl EStAtE �1
CYpRuS
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Cyprus
CYpRuSTypical Lease Terms
Legislation: tenancy Law of the
republic of Cyprus
Lease Length: General
commercial leases are 5 years
minimum although office leases
are usually between 2 to 5 years
long. residential leases are most
1-4 years and are negotiable.
Rent Escalation/Rent Review:
residential rental amounts are
based on number of bedrooms
and the condition of premises.
With commercial properties the
rent is usually agreed at market
rate on a per square meter basis
per month. According to tenancy
Law, landlords cannot request
more than a 14% increase every
2 years.
Guarantee and Security Deposit:
the standard amount is a one
month rental, but other options are
available. For example if tenant is a
company, the landlord may request
the personal guarantee of a Cypriot
resident or a bank guarantee for an
agreed amount.
Rights of Renewal: the tenancy
becomes statutory after 2 years
of occupancy. the standard
period for renewal/termination is
2 months notice.
Break Options and Terminations:
these are agreed between the
parties, usually with a penalty
amount.
Tenant and Landlord Obligations:
the tenant is usually responsible
for internal repairs and the
landlord for structural works
and the maintenance of any
common areas.
Subletting: specifically prohibited
unless agreed by both parties.
Legal Environment Concerning
Brokerage Law
real estate agents need to be
licensed and registered in Cyprus.
it is common practice that the
agent’s commission is paid by the
landlord. therefore if a landlord
accepts the services of an agent
and rental is agreed, he is
obligated to pay the commission.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge (Koinohrista):
Building service charges are
quoted in euros per month and
are paid monthly in advance with
the rent. utility charges
(electricity, water, telephone) and
any charges related to common
areas of building are payable by
the tenant. Common charges are
billed according to square meters
occupied. Annual garbage fee as
imposed by the local Municipality
is payable by the tenant.
Local Property Taxes: payment is
the responsibility of the landlord.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Cyprus
Acquisition Costs
the tenant does not incur any
charges for rental of premises,
unless the tenant has hired the
services of an agent and a search/
find fee has been agreed.
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually
1 month’s net rent for a 2 year
lease, if a longer lease period
then it is a percentage of the
annual rent; 6% on first year
rent, 3% on second year, and
1% on each year thereafter.
Freehold – 3% of purchase
price
sublease – same as leasing
fees above.
•
•
•
Property Transfer Tax: For the
purchase of a property the
purchaser will be responsible for
paying a property transfer tax of
3-8% on the declared purchase
price, to the Land registry of the
republic of Cyprus.
VAT: VAt in Cyprus is currently
15%. professional fees are subject
to VAt. However, it is not
applicable on the lease or sale of
commercial property.
Use of Space: traditionally older
offices in Cyprus have tended to
be constructed as cellular offices.
General Market Practices
Basis of Measurement:
Measurement is based on actual
square meters and age/condition
of the total physical structure
of building.
Fit Out/Reinstatement/
Dilapidations: Fit out and
modifications of space are
at the tenant’s expense providing
the landlord is in agreement
with works.
Holidays
there is no particular period
during the year when the speed of
transactions is significantly
affected by holidays. peak holiday
periods tend to be during
midsummer (mid-August) and
between Christmas and new Year.
Acknowledgement
We would like to thank
Konstantinos Markogiannakis
and Anna nazou of danos &
Associates for their assistance in
the preparation of this country
review.
CYpRuS
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Cyprus
Country Statistics
population (thousands) 10,251
surface area (km²) 79,000
density (per km²) 130
Local currency Koruna
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 222 235 242 235
GDP AnnUAl % 6.8 6.0 3.2 -3.0
net Direct foreiGn inveStment (US$ millionS) 4,043 7,937 6,000 2,900
lAboUr force (millionS) 5.3 5.4 5.4 5.4
UnemPloyment rAte % 8.1 6.6 5.4 8.7
inflAtion rAte AnnUAl % 2.5 2.9 6.3 1.9
AverAGe reAl WAGeS AnnUAl % 3.8 4.3 2.1 0.1
GDP Per heAD ($ At PPP) 22,360 24,340 25,690 25,080
lenDinG intereSt rAte 5.6 5.8 6.3 6.5
exchAnGe rAte to US$ 22.5956 20.2937 17.0711 19.9623
Major Cities
City Core population
prague 1,193,270
Brno 384,727
ostrava 322,111
pizen 168,422
olomouc 103,372
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
CzECH REpubliCprague
Austria
Belgium
Bulgaria
Cyprus
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Czech Republic
Political Structure
the Czech republic is a parliamentary republic with
a president as head of state. the parliamentary
legislature is bicameral consisting of a chamber of
deputies and a senate. the Chamber of deputies
(poslanecka snemovna) is effectively a continuation
of the federal parliament of Czechoslovakia. the
president is elected by parliament and serves for
a five-year term.
Legal Structure
the legal system of the Czech republic is based on
civil law system but incorporates old Austro-
Hungarian legal codes. the Czech court system
consists of district, regional, and high courts. the
supreme Court is the highest court of appeal.
Hours of business
the main business hours are Monday to Friday
08:00am – 17:00pm.
Visas
the Czech republic is a member of the schengen
area agreement. Holders of an eeA (eu Member
states, iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months. Foreign
nationals whose stay in the Czech republic will
exceed 30 days are obliged to register within 30 days
on their arrival in the Czech republic with the Alien
and Border police.
Transport
the main international airport is prague Airport
(www.pragueairport.co.uk).
the Czech republic has an extensive rail and bus
system. travel details around prague can be
obtained from the transport operators for prague
(www.dpp.cz/en) and Czech republic
(http://jizdnirady.idnes.cz/vlakyautobusy/spojeni)
International Dialling code
the country code is + 420
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in bureau
Further country information can be obtained from
the invest in the Czech republic bureau:
www.czechinvest.org
bnp pARibAS REAl EStAtE ��
CzECH REpubliC
Austria
Belgium
Bulgaria
Cyprus
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Czech Republic
CzECH REpubliCTypical Lease Terms
Legislation: the law that governs
commercial leases is based on the
rent Act.
Lease Length: 5 year and longer
term leases are usual in Czech
republic for A-class offices. the
lower the standard of property is,
the higher the flexibility in terms
of lease length so certain B-class
projects can offer shorter leases.
Rent Escalation/Rent Review:
typically rents are indexed
annually (upwards only) based on
the Consumer price index (HCpi
eu 25 published by eurostat) or
whenever the index has increased
by a predetermined amount
specified in the lease. rent
increases can sometimes be
pre-determined in leases.
Guarantee and Security Deposit:
Landlords usually require a credit
rating or a deposit of 3 months
rent including VAt or a bank
guarantee to complete the lease.
some developers require a deposit
or bank guarantee equal to
6 months including VAt.
Rights of Renewal: if an option to
renew was not previously agreed
the lease will terminate and must
be renegotiated.
Break Options and Terminations:
Break options are negotiable.
However, tenants should be aware
of notice periods as options will
expire and become null and void if
notice is not delivered on time.
some lease agreements allow for
the termination of the lease prior
to the break option under the
condition of a penalty, subject
to negotiations and current
market conditions.
Tenant and Landlord Obligations:
the landlord is normally
responsible for building
maintenance, insurance, and
technical installations and the
tenant is responsible for
maintenance and insurance
within the premises.
Subletting: the subletting of
premises is allowed but only with
the prior written consent of the
landlord. the landlord is not
required to approve the proposed
sublease but must give
reasonable grounds for denying
a sublease so in practice they are
generally accepted.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Czech Republic
Legal Environment Concerning
Brokerage Law
there is no legal requirement to
have a license in order to trade as
an agent in the Czech republic.
each party typically pays their
respective agent. on occasion the
landlord’s agent may sometimes
earn a fee of half a month’s net
rent from the tenant or the
landlord. the tenant’s agent only
earns fees directly from the
tenant.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
or us dollars per square metre
per month and are paid monthly
or quarterly in advance.
Service Charge: Building service
charges are quoted in euros or us
dollars per month or quarter and
are paid monthly or quarterly in
advance along with the rent.
sometimes service charges are
charged in the local currency.
Local Property Tax: paid directly
by the landlord and billed to the
tenant via the service charge.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are generally
2 months’ net rent.
Freehold – Fees, paid by the
seller, are negotiable but are
typically equal to 1.5–2.5% of
the purchase price.
subletting – subletting is the
same as leasing.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property a property transfer tax of
5% will be levied, based on the
purchase price of the property plus
VAt. the responsibilities of the
costs are usually negotiated and
very often the costs are split 50:50
between seller and purchaser.
Value Added Tax: the VAt rate in
the Czech republic is currently
22% and payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs, and property
transfer tax.
•
•
•
General Market Practices
Basis of Measurement: there are
two standard measuring
practices:
net Lettable Area or Building
owner’s and Manager’s
Association standard (BoMA).
this is the most commonly
used area calculation and is
used for calculating the rent.
BoMA includes main usable
space, ancillary space such as
toilets, kitchens, separating
walls, and circulation space.
Areas used for technical use,
structural walls and elevators
are excluded. A “gross-up”
factor of 5–12% may be
applied to the net Lettable
Area, particularly if the
building is new.
Gross Base Area or BGF
(Brutto Geschossfläche). this
area is measured from
internal wall to internal wall
and includes all the gross
area within.
•
•
CzECH REpubliC
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Czech Republic
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard.
upgrading space to full air
conditioning is the responsibility
of the tenant. When letting
second generation space, the
landlord will assume the costs of
installing partitioning according
to a space plan provided by the
tenant. When vacating premises,
the tenant is responsible for
reinstating the space to the
condition in which they had first
occupied the space, allowing for
standard wear and tear. tenant
improvements that were
undertaken during occupancy
cannot be sold to the landlord
unless otherwise stipulated in the
lease. the landlord has the option
of leaving the premises in their
current condition.
Use of Space: Cellular and open
plan space are both common.
Holidays
there are certain times of the
year when the speed of
transactions is reduced due to
holidays. August and January tend
to generally be the main holiday
period.
Acknowledgement
We would like to thank natalia
trihob and richard Lemon of
dr Max Huber & partners for
assistance in the preparation of
this country review.
CzECH REpubliC
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Czech Republic
Country Statistics
population (thousands) 5,435
surface area (km²) 43,000
density (per km²) 126
Local currency Kroner
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 187 191 188 182
GDP AnnUAl % 3.3 1.6 -1.1 -3.5
net Direct foreiGn inveStment (US$ millionS) -4,857 -5,199 -3,666 -1,627
lAboUr force (millionS) 2.9 2.9 2.9 2.9
UnemPloyment rAte % 3.9 2.8 1.9 4.3
inflAtion rAte AnnUAl % 1.9 1.7 3.4 0.9
AverAGe reAl WAGeS AnnUAl % 1.9 2.9 0.7 2.7
GDP Per heAD ($ At PPP) 35,491 36,267 36,420 35,210
lenDinG intereSt rAte 5.4 6.3 6.9 5.5
exchAnGe rAte to US$ 5.9468 5.4437 5.0981 5.6196
Major Cities
City Core population
Copenhagen 499,148
Aarhus 286,668
odense 183,691
Aalborg 161,661
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
dEnMARk
Copenhagen
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Denmark
Legal Structure
denmarks’ judiciary is a civil law system.
denmark’s court system comprises 100 local
courts, two high courts, several special courts
(that deal with arbitration and maritime issues)
and a supreme court for appeals not resolved by
the two high courts.
Hours of Business
the main business hours are Monday to Friday
around 08:00am – 17:00pm.
Visas
denmark is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months.
Transport
the main international airport is Copenhagen Airport
(www.cph.dk), which is also the main hub for
northern europe. denmark has three other
international airports at Århus, Aalborg and Billund.
Greater Copenhagen is served by the “s” train under/
overground suburban rail system. denmark’s rail
service connects Copenhagen with the towns of
Jutland, Funen and Zealand. danske statsbaner –
danish state railways (dsB) – runs the service and
travel information can be found at their website
www.dsb.dk/rejseplan/bin/query.exe/en.
International Dialling Code
the country code is + 45
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the invest in denmark bureau:
www.investindk.com
bnp pARibAS REAl EStAtE �0
dEnMARk
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Denmark
dEnMARkTypical Lease Terms
Legislation: the legislation that
governs commercial leases
(erhverslejeloven) is new and
came into effect in 2000.
Lease Length: typically the term
of a lease is not specified and is
expected to be ongoing. Generally
the tenant and the landlord will
agree to an interminable period
whereby the lease will be
guaranteed for that period of
time, for example, in new
buildings the tenant is guaranteed
a 10 year lease with the
possibility of early termination by
the tenant after 5 years.
Rent Escalation/Rent Review:
rents are indexed annually to the
Consumer price index but may
also be adjusted automatically
whenever the Cpi changes by a
predefined amount.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
bank guarantee of 6 months gross
rent is necessary to complete the
lease although a deposit may
sometimes be paid.
Rights of Renewal: tenants do
not have a legal right to renew
the lease. As most leases in
denmark are for an unspecified
length of time it is uncommon for
leases to contain a right to renew
the lease. For leases that have
specified terms the lease may be
renewed after renegotiation with
the landlord.
Break Options and Terminations:
there is a possibility to break/
renegotiate the agreement if this
clause is included in the
agreement. in situations where
the lease term is not specified,
the lease term is considered to be
ongoing until either the tenant or
landlord gives notice of
termination. the landlord is not
allowed to terminate an ongoing
lease unless the tenant has not
performed its covenants. if the
landlord terminates the lease
prematurely he is liable for
compensation to the tenant.
Tenant and Landlord Obligations:
Maintenance and insurance
obligations are not regulated by
law and can be divided freely
between the tenant and landlord.
normally the landlord is
responsible for building
maintenance, insurance, and
technical installations and the
tenant is responsible for
maintenance and insurance
within the premises.
Subletting: the tenant has, by
law, no right to transfer the lease
agreement or sublease space
without the landlord’s consent.
Generally subletting is allowed
with the prior written consent of
the landlord.
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Denmark
Legal Environment Concerning
Brokerage Law
A brokerage licence, which is
issued by the government, is only
required to conduct sales
transactions. typically brokers
represent the landlord, but
recently some corporations have
started to use consultants during
negotiations to protect their
interests. there are no limitations
to advice given by agent, on legal
or financial matters.
the common method for sales of
properties are options for selected
buyers to place an offer and
“closed bidding”. “open bidding”
sales are primarily used when a
public property is being sold. As
the name implies, all offers after
the deadline are openly known by
all interested parties.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in danish
Kroner (dKK) per square metre
per annum and are paid in
advance on a quarterly basis.
Service Charge: Building service
charges are quoted in danish
Kroner (dKK) per square metre
per annum and are paid in
advance on a quarterly basis
along with the rent. All service
charges must be agreed upon
separately in the lease agreement.
the tenant normally pays for
heating and electricity themselves
via separate agreements with
distributors (power company).
the landlord typically invoices
building insurance through the
service charge.
Local Property Tax: paid by the
landlord directly but this is
typically invoiced to the tenant
through the service charge.
Acquisition Costs
typical acquisition costs that
a company will have to pay
when buying or leasing new
premises include:
Agents Fees
Leasing – Fees are usually
approximately 15 % of the first
year’s annual net rent. each
party typically pays the fee of
their contracted agent.
Freehold – Fees are paid by
the seller and are negotiable
but are usually between 1 –
3% of the agreed purchase
price depending on
transactions size.
subletting – same as leasing.
Property Transfer Tax (Stamp
Duty): during the purchase of a
property the purchaser will be
responsible to pay a transfer tax
equal to 0.6% of the agreed
purchase price. the payment of
the transfer tax on properties
located in Jutland is split between
buyer and seller.
Value Added Tax: the VAt rate in
denmark is 25% and is payable on
all forms of transactions including
rent, building service charges and
agents fees.
•
•
•
dEnMARk
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Denmark
General Market Practices
Basis of Measurement: For office
premises, the typical method of
measurement is to measure from
the exterior of the building to the
midpoint of subdividing walls. the
area used to calculate rent will
also typically include a share of
common areas such as entrances,
staircases, elevators, and
corridors.
Fit Out/Reinstatement/
Dilapidations: premises are
typically built out to tenant
specifications and financed by the
landlord. the cost of the fit out is
charged to the tenant as
additional rent dependant on the
structure of the transaction. the
tenant’s obligation, to return the
premises to the condition it was
originally in when they took
possession of the premises. this is
dependant upon the structure of
the original transaction with the
landlord and can vary from
property to property.
Use of Space: the most common
form of office premises in denmark
is a mixed plan utilizing both
cellular offices and open areas.
Holidays
the peak holiday period in
denmark is during the summer
months, but July specifically is the
only time period where transaction
speed may be significantly slowed
due to holidays.
dEnMARk
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Denmark
Country Statistics
population (thousands) 1,343
surface area (km²) 45,288
density (per km²) 29.6
Local currency Kroon
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 25 26 25 22
GDP AnnUAl % 10.4 6.3 -3.6 -13.0
net Direct foreiGn inveStment (US$ millionS) 673 1,115 1,050 950
lAboUr force (millionS) 0.7 0.7 0.7 0.7
UnemPloyment rAte % 5.9 4.7 5.7 12.4
inflAtion rAte AnnUAl % 4.4 6.6 10.4 0.0
AverAGe reAl WAGeS AnnUAl % 11.6 13.0 3.3 -15.0
GDP Per heAD ($ At PPP) 18,995 20,780 20,480 18,560
lenDinG intereSt rAte 5.0 6.5 8.6 8.2
exchAnGe rAte to US$ 12.4729 11.4368 10.6945 11.7865
Major Cities
City Core population
tallinn 396,010
tartu 101,483
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
EStoniAtallinn
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Estonia
Political Structure
estonia is a parliamentary republic with a president
elected by parliament for a five year term. estonia’s
parliament is unicameral and known as the
riigikogu.
Legal Structure
the legal system in estonia is based on civil law but
has been influenced by the German legal system.
estonia has a three-level court system consisting of
four county courts that are divided into regional
courthouses and two courts of appeal that includes
the highest court, the supreme Court.
Hours of Business
the main business hours are Monday to Friday
09:00am – 17:00pm.
Visas
estonia is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months.
Transport
tallinn Airport (www.tallinn-airport.ee)
is the international airport in estonia. train
services operate in tallinn with connections to
st petersburg and Moscow. outside of tallinn there
is an extensive bus service. public transport
information can be obtained from the tallinn city
council website (www.tallinn.ee/eng) and
(http://soiduplaan.tallinn.ee)
International Dialling Code
the country code is + 372
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the invest in estonia bureau:
www.investinestonia.com/
bnp pARibAS REAl EStAtE ��
EStoniA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Estonia
Typical Lease Terms
Lease Length: Leases between
3 and 5 years are typical, but an
unlimited lease may be agreed.
older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer prices
index (or a percentage of Cpi) and
are adjusted annually. rent
reviews are upward adjustment
only.
Guarantee and Security Deposit:
rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
Rights of Renewal: the tenant is
afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Break Options and Terminations:
the tenant has no right by law to
prematurely terminate the lease.
Break options can be agreed in
rental agreements. A typical
break option is the termination of
the agreement in 6 months prior
notice. it is possible for the
landlord and tenant to agree to
an early termination depending
on the market conditions and the
specific nature of the lease.
Tenant and Landlord Obligations:
the landlord is usually
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. the landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
the property.
Subletting: the tenant is not
permitted to sublet the premises
without the prior written consent
of the landlord.
Legal Environment Concerning
Brokerage Law
there are no certain laws on
brokerage. there are brokers
associations that grant
certificates based on exams.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in local
currency on a square metre per
month basis and are paid on a
monthly basis. typically
agreements contain exchange
rate protection clauses against
currency devaluation risks.
Service Charge: Building service
charges are quoted in local
currency, on square metre per
month basis and are paid monthly
with the rent. these charges
include heating, water/sewage,
electricity and maintenance.
Local Property Tax: Local
property tax is paid by the
landlord directly but in some
cases this cost is invoiced back to
the tenant through a service
charge.
EStoniA
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Finland
Estonia
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. each party
typically pays the fee of their
contracted agent.
Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 1–4% of the agreed
purchase price.
subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): there is no property
transfer tax in estonia.
Value Added Tax: the current VAt
rate in estonia is 18% and most
tenants pay VAt on rent, service
charges and notary costs.
•
•
•
General Market Practices
Basis of Measurement: For office
premises, the normal
measurement of area used to
calculate rent is the net Base
Area. this is the net leasable area
and does not include areas used
for technical use such as vertical
penetrations (elevator shafts,
stairs) or structural walls.
Fit Out/Reinstatement/
Dilapidations: Fit out is
completed to tenant specifications
and is typically financed by the
landlord. this cost is then usually
charged to the tenant as a rental
surcharge depending upon the
transaction agreement.
Use of Space: Cellular offices
dominate the market, but open
plan offices are gaining popularity
in Baltic countries.
Holidays
peak holiday season is during the
summer months from mid-June to
mid-August, when transaction
times might be affected.
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay of
newsec Advice AB for their
assistance in the preparation of
this country review.
EStoniA
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Estonia
Country Statistics
population (thousands) 5,267
surface area (km²) 338,000
density (per km²) 16
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 168 174 176 166
GDP AnnUAl % 4.9 4.2 0.9 -5.7
net Direct foreiGn inveStment (US$ millionS) 2,313 55 -3,442 -256
lAboUr force (millionS) 2.6 2.7 2.7 2.7
UnemPloyment rAte % 7.7 6.9 6.4 9.0
inflAtion rAte AnnUAl % 1.6 2.5 4.0 0.3
AverAGe reAl WAGeS AnnUAl % 1.4 1.3 0.6 2.8
GDP Per heAD ($ At PPP) 32,879 35,520 36,470 34,480
lenDinG intereSt rAte 4.1 5.0 5.3 2.8
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Helsinki 548,720
espoo 207,314
tampere 192,214
Vantaa 175,123
turku 171,519
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
FinlAnd
Helsinki
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Finland
Political Structure
Finland is a parliamentary republic where executive
powers are split between the president and the
prime minister plus the ministerial cabinet. the
president is elected for a 6-year term by popular
vote. the prime minister and Council of state are
answerable to the parliament (eduskunta) which
is unicameral and the supreme legislative body
in Finland.
Legal Structure
Finland’s legal system is based on civil law and
incorporates much of swedish law. the Finnish
judiciary consists of two systems; general courts and
administrative courts. the general courts handle
civil suits and criminal cases whilst the
administrative courts oversee the country’s
bureaucracy.
Hours of Business
Hours of business vary between summer and winter.
summer hours are 08:00am – 17:00pm and winter
hours are 08:00am to 16:00pm.
Visas
Finland is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from
eu-countries as well as switzerland and
Liechtenstein may remain for an unlimited time.
Citizens of the united states of America do not
require a visa for entry. A residence permit is
required if intending to stay for a period exceeding
3 months. Citizens of other nordic countries are
excluded from this requirement.
Transport
Finland’s international airport is Helsinki-Vantaa
Airport (www.helsinki-vantaa.fi) in Vantaa. Finland
also has a network of local airports and rail network
to connect the rest of the country. timetables for the
rail network can be obtained from the operator,
Finnish state railways (www.vr.fi/heo/index.html).
International Dialling Code
the country code is + 358
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the invest in Finland bureau:
www.investinfinland.fi
bnp pARibAS REAl EStAtE ��
FinlAnd
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Finland
FinlAndTypical Lease Terms
Legislation: the real property
Code governs commercial lease
contracts in Finland. While this is
primarily intended to govern
residential transactions, it does
include mandatory regulations for
commercial leases. the
association of property owners
have published standard
contracts for different types of
properties (hotels, shopping
centres, offices) that are
approximately 2-4 pages with
appendices covering indexation of
rent and service charges and so
on. it is not compulsory to use the
standard contracts and any form
of contract is acceptable as long
as it conforms to the real
property Code. While most
companies utilise the standard
leases they tend to have their own
standard appendices. As most
companies are familiar with the
standard leases the negotiation
process tends to be shorter than
in many other countries in europe.
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
Rent Escalation/Rent Review:
rent escalations apply to leases
longer than 3 years or for an
indefinite term, and are typically
linked to the Consumer prices
index and are adjusted annually.
upward adjustment only is most
common.
Guarantee and Security Deposit:
rent deposits and/or bank
guarantees of 3 – 6 months rent
are usually required from
prospective tenants.
Rights of Renewal: the tenant is
afforded no security of tenure by
law but commonly may negotiate
rights of renewal with the
landlord.
Break Options and Terminations:
the tenant has no right by law to
prematurely terminate the lease.
it is possible however for the
landlord and tenant to agree to
an early termination depending
on the market conditions and the
specific nature of the lease. in
these instances, a termination
penalty is generally required. For
unlimited term leases the tenant
may terminate the lease at any
time with appropriate notice, but
the landlord must provide a valid
reason to terminate the lease and
then he is liable to pay
compensation to the tenant.
Tenant and Landlord Obligations:
typically the landlord is
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. the landlord is
responsible for insurance of the
building but in single tenant
properties, the tenant may
sometimes be required to insure
the property.
Subletting: the tenant is not
permitted to sublet the premises
without the prior written consent
of the landlord.
bnp pARibAS REAl EStAtE �0
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Finland
Legal Environment Concerning
Brokerage Law
An agency must have a person
possessing an authorization for
brokerage (LKV) who also acts as
the responsible person for
documenting all transactions.
individual agents must possess a
brokerage licence provided by the
magistrate of local municipality
(Lääninhallitus/Länsstyrelsen).
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
on per square metre per month
basis and are paid in advance on a
quarterly basis.
Service Charge: Building service
charges are quoted in euros on
per square metre per month basis
and are paid in advance on a
quarterly basis with the rent.
these charges include heating,
water/sewage, and maintenance.
tenants usually pay their own
electricity.
Local Property Tax: Local
property tax is paid by the
landlord directly but ultimately
this cost is invoiced back to the
tenant through a service charge.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
15-20% of the first year’s
gross annual rent. each party
typically pays the fee of their
contracted agent.
Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 1-4% of the agreed
purchase price.
subletting – same as leasing
but in some instances
subletting fees may be higher
than leasing fees.
Property Transfer Tax: during
the purchase of a property the
purchaser will be responsible for
paying a transfer tax equal to 4%
of the purchase price.
Value Added Tax: the current VAt
rate in Finland is 22% and most
tenants pay VAt on rent. in some
cases where the landlord is not
VAt registered, the VAt is not
charged. this applies to banks,
insurance companies, churches.
•
•
•
General Market Practices
Basis of Measurement: For office
premises, the normal measurement
of area used to calculate rent is the
net Base Area. this is the net
leasable area and does not include
areas used for technical use such
as vertical penetrations (such as
elevator shafts and stairs) or
structural walls.
Fit Out/Reinstatement/
Dilapidations: Fit out is completed
to tenant specifications and is
financed by the landlord. the cost
is then usually charged to the
tenant as a rental surcharge
depending upon the transaction
agreement.
Use of Space: While cellular
offices, open plan, and mixed plan
offices are all common in Finland,
the most popular form of
premises today is open plan for
cost effective reasons.
Holidays
peak holiday season is during the
summer months of June to August
(July is high season) but
transaction times do not
necessarily become significantly
effected.
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay
of newsec Advice AB for their
assistance in the preparation
of this country review.
FinlAnd
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Finland
Country Statistics
population (thousands) 61,353
surface area (km²) 549,000
density (per km²) 112
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 1.914 1.957 1.964 1.896
GDP AnnUAl % 2.4 2.3 0.3 -3.5
net Direct foreiGn inveStment (US$ millionS) -44,020 -67,630 -124,579 -77,598
lAboUr force (millionS) 27.8 28.0 28.0 28.1
UnemPloyment rAte % 8.8 8.0 7.4 9.7
inflAtion rAte AnnUAl % 1.7 1.5 2.8 -0.1
AverAGe reAl WAGeS AnnUAl % 1.1 1.3 0.3 2.6
GDP Per heAD ($ At PPP) 32,230 33,800 34,470 33,310
lenDinG intereSt rAte 3.7 4.3 4.8 4.2
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
paris 2,152,329
Marseille 800,309
Lyon 415,479
toulouse 358,598
nice 342,903
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
FRAnCEparis
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
France
Political Structure
France is a parliamentary republic with a
presidential head of state who is elected for five
years. the president appoints the prime minister to
lead the government. the main legislative body is
the bicameral parliament that is comprised of the
senate and the national Assembly. the senate’s
powers are limited compared to the national
Assembly that has primacy in legislative matters.
Legal Structure
the French legal structure is a civil law system that
includes concepts that developed out of the
napoleonic period to form the basis of the highly
influential French Civil Code. the French judiciary
includes local courts that consist of a variety of civil
and criminal courts, 35 regional courts of appeal,
and the highest criminal court, known as the Court
of Cassation.
Hours of Business
the main business hours are Monday to Friday
09:00am – 12:00pm, 13:00pm – 18:00pm.
Visas
France is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months.
Transport
the main international airport is paris roissy
Charles de Gaulle (www.aeroportsdeparis.fr) that is
located 23 kilometres to the north east of paris.
the other major airport in paris is paris orly.
France’s other international airports are found in
Bordeaux, Lille, Lyon, Marseilles, nice and toulouse.
France has a very well developed public transport
network. As well as buses paris is served by the
regional express railway (rer) for suburban rail
services and the efficient underground system, the
Metro. the paris transport Company provides
timetables for travel for both services (www.ratp.fr).
intercity rail services are provided by sCnr
(www.sncf.com) and travel detail can be found at
(www.tgv-europe.com/en/home).
paris is a destination terminal for the eurostar
service (www.eurotunnel.com) from France to the
uK plus links to other european rail networks.
International Dialling Code
the country code is + 33
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the invest in France bureau:
www.invest-in-france.org
bnp pARibAS REAl EStAtE ��
FRAnCE
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
France
FRAnCETypical Lease Terms
Legislation: the law that governs
leases is based on the regulations
of article L.145.1 and subsequent
articles of the new “Code de
Commerce” and the non-
abrogated parts of decree n° 53–
360 of 30 september 1953 and
subsequent amendments.
Lease Length: A lease can be 3
years although 6 or 9 fixed year
leases are frequently used.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Construction Costs index
(insee index) but the index used
should change in 2009 for new
leases. should the automatic
indexation from the start exceed
25 % during the lease, the tenant
can demand a rent review.
Landlord and tenant can also
agree to cap the escalation rate.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit of 3 months net rent must
be paid when the lease is signed.
the landlord may accept a bank
guarantee to replace the deposit.
Rights of Renewal: on lease
expiry the tenant has no security
of tenure. in the 9th year of the
lease, with 6 months notice, the
landlord may either renew the
lease at an adjusted rent or refuse
renewal. should he refuse to
renew, he is obliged to pay
compensation to the tenant.
Break Options and Terminations:
the tenant has the right to break
the lease at the end of the 3rd
and 6th year subject to 6 months
written notice delivered by a
bailiff. the landlord does not have
the right to break the lease before
the end of the 9 year period. the
tenant does not have the right to
cancel the lease before the break
option dates unless prior
agreement from the landlord has
been obtained. if granted, this will
typically be subject to a penalty,
the amount of which will depend
on market conditions.
Tenant and Landlord Obligations:
tenant obligations are internal
repair while landlord obligations
are main structural repairs and to
keep the roof watertight.
Maintenance and insurance is
paid by the landlord and re-
invoiced to the tenant.
Subletting: the tenant is not
permitted to sublet the premises
without written consent from
the landlord, or unless it has
otherwise been authorised in
the lease.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
France
Legal Environment Concerning
Brokerage Law
to be a property consultant, no
specific qualifications are required
but each agent must be registered
to get a “transaction card” in
order to be paid. in a company
there is usually one “transaction
card” for the manager (it is a
nominal card). the manager then
delegates his card to the other
members of the company. to be
registered a warrant is needed.
in accordance with the law
“Hoguet” (n°70-09 of 2 January
1970) the service provider must
have a registered listing (mandate)
in order to be able to offer a
property to a client. By virtue of
this listing, the landlord/main
tenant authorises the service
provider (who becomes the
Authorised service provider) to sell
or let the property on their behalf.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per annum and
are paid quarterly in advance.
Service Charge: service charges
are quoted in euros per square
metre per annum and are paid
quarterly in advance, based on a
provisional amount, which is then
adjusted once the actual cost is
known at the end of the year.
Land Property Tax: Land tax
(impôt Foncier) is assessed on a
percentage of the notional value
of the building and is paid by the
landlord on an annual basis. this
cost is passed on to the tenant.
Other Taxes/Costs: office tax
(taxe Bureaux) specific to the ile-
de-France region is assessed on
the size of the premises based on
an annual fixed price per square
metre and paid by the landlord on
an annual basis. this cost is
passed on to the tenant.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
30% of the first year’s net
rent. the fees are usually split
50:50 between the tenant and
landlord. sometimes a
different fee-split is agreed,
for example, 2/3 may be paid
by one party and 1/3 by the
other and occasionally one
party may pay all the fees.
Freehold – Fees are paid by
the seller and negotiated on a
case-by-case basis depending
on the purchase price. Fees
are usually between 3-5% of
the agreed purchase price.
•
•
subletting – Fees are typically
based on the time that the
main tenant’s lease still had
to run (usually 10% of the
year’s net rent for terms of
one year or less and 20% for
terms of two years or more),
or on a percentage (to be
negotiated) of the savings
made through the early
surrender.
Property Transfer Tax: For the
purchase of a property, the
purchaser will be responsible for
paying transfer tax, typically 4.8 –
5% of the purchase price.
Value Added Tax: the current VAt
rate in France is 19.6% and
payable on all forms of
transactions including rent,
service charges and agents fees
but is not paid on the property
transfer tax.
Other Taxes/Costs: notary fee
(0.825% if it is over 16,770 euros),
and other small expenses (stamps,
mortgage costs). the notary is
responsible for collecting all taxes
and extra costs, which is
approximately 6.5% – 7% of the
purchase price (including the
property transfer tax).
•
FRAnCE
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
France
General Market Practices
Basis of Measurement: in France,
the following terms are used to
define floor areas:
sHoB (surface Hors oeuvre
Brute) – Gross Areas excluding
the shell of the building. the
sHoB is equal to the sum of
the areas of each floor of a
building, taking into account
the bare exterior of the walls
and the finished floors. it
includes basements and attic
spaces, whether they are
fitted out or not, balconies,
and accessible roof verandas
(excluding street-level
verandas).
sHon (surface Hors oeuvre
nette) – net Areas excluding
the shell of the building. the
sHon takes into account the
bare exterior of the walls and
is equal to the sHoB after
having deducted basements
and attic spaces not fitted out
for residential or professional
activities (the attic spaces to
be deducted are considered to
be areas of which the ceiling
height is less than 1.80 m),
roof verandas, balconies,
loggias, and open areas
located on the ground floor
(eg parking areas).
•
•
suB (surface utile Brute ou
surface locative) – Gross
usable or Lettable Areas. this
is the area normally used in
the standard French lease
contract for calculating rent.
the suB is equal to the sum of
the office areas and common
areas, corridors (but not the
vertical circulations), toilets,
social areas and landings.
sun (surface utile nette) –
net Lettable Areas (used for
space planning) – the sun is
equal to the suB after having
deducted corridors, toilets
and landings. Common space
such as entrance halls or
cafeteria are added to the
lease as a proportion of the
tenant’s leased space of the
total building.
Fit Out/Reinstatement/
Dilapidations: office buildings
are usually delivered carpeted,
with suspended ceilings, lighting
and wiring (except data wiring),
and mechanical and electrical
servicing. raised floors and air
conditioning are standard in new
buildings. in a tenant’s market the
landlord may assume the cost of
partitioning or a part of the cost.
in a landlord’s market, these
costs are borne by the tenant.
•
•
All works, decorations,
installation, additions, and
furnishings which the tenant may
undertake on the premises during
the lease shall, at the end of the
lease or at the end of renewal,
belong to the landlord, unless the
latter should demand the return
of the premises to their original
state.
Use of Space: Companies occupy
office space usually as cellular
offices mixed with open spaces
(for projects team or commercial
departments).
Holidays
there are certain times of the year
in which the speed of transactions
are reduced due to holidays. in
France, the period from mid-July
(after Bastille day on 14 July)
through until the end of August is a
peak holiday period. Many of the
smaller companies close down in
August whilst larger firms operate
with only a skeleton staff.
FRAnCE
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
France
Country Statistics
population (thousands) 82,368
surface area (km²) 357,000
density (per km²) 231
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 2,588 2,651 2,685 2,543
GDP AnnUAl % 3.0 2.5 1.3 -5.3
net Direct foreiGn inveStment (US$ millionS) -38,520 -118,430 -37,539 22,651
lAboUr force (millionS) 43.6 43.5 43.6 43.5
UnemPloyment rAte % 10.8 9.0 7.8 10.1
inflAtion rAte AnnUAl % 1.6 2.3 2.7 0.0
AverAGe reAl WAGeS AnnUAl % -0.4 -1.2 -0.5 0.6
GDP Per heAD ($ At PPP) 32,333 33,510 34,610 32,930
lenDinG intereSt rAte 9.2 10.1 10.4 8.0
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Berlin 3,386,667
Hamburg 1,704,735
Munich 1,194,560
Cologne 962,507
Frankfurt am Main 643,821
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
gERMAnYBerlin
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
Political Structure
Germany is a federal republic with a president as
head of state elected every five years by the federal
legislature. the German central government is
parliamentary in nature but the exercise of power
occurs in a federal structure. the federal republic
consists of 16 states (Länder). each state has its own
mostly autonomous parliament so some regulations
may vary between states. the federal government is
headed by the chancellor who leads the executive in
the German government. the federal legislature is
bicameral and consists of a lower house, the
Bundestag and an upper house the Bundesrat.
Legal Structure
Germany’s legal system is based on civil law with
developments unique to Germany pertaining to the
rights of the individual. the judiciary consists of
ordinary courts, specialised courts and constitutional
courts. there are four levels of ordinary courts with
the majority (mostly lower level civil and criminal)
operating at state level although the higher level
courts (mostly appeal) at federal level.
Hours of Business
Works hours vary between states but the main office
hours are generally Monday to Friday 9:00am –
18:00pm.
Visas
Germany is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months that should be
applied for at the local Aliens office (Ausländeramt).
Transport
the most important airports in Germany are
Frankfurt (www.frankfurt-airport.de), Munich
(www.munich-airport.de), düsseldorf
(www.flughafen-duesseldorf.de), Cologne/Bonn
(www.airport-cgn.de), Hamburg (www.hamburg-
airport.de), Berlin (www.berlin-airport.de),
Hannover (www.hannover-airport.de), Bremen
(www.flughafen-bremen.de) and stuttgart
(www.flughafen-stuttgart.de).
Germany has a well-developed public transport
infrastructure consisting of buses, regional and
intercity trains. the interregio-express (ire)
connects cities across Germany, the regionalbahn
(rB) connects regions and the city centres whilst the
stadt-express (se) and s-Bahn network facilities
movement within cities and agglomerations. the
intercity express, eurocity and thayls (www.thalys.
com) train services link Germany to other european
cities. train timetables are available from deutsche
Bahn (www.bahn.de).
International Dialling Code
the country code is + 49
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the invest in Germany bureau:
www.invest-in-germany.com/homepage
bnp pARibAS REAl EStAtE ��
gERMAnY
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
gERMAnYTypical Lease Terms
Legislation: the law that governs
leases is based on the German
Civil Code (BGB or Bürgerliches
Gesetzbuch), on statutory orders
(rechtsverordnung) or case law.
Lease Length: 5 years with an
additional 5 years renewal or
10 year leases are typical in
Germany.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Consumer price index (Vpi)
or compounded annually. in either
case, the terms and type of
indexation are negotiable.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details
or access to company information.
either a deposit of 3 months
gross rent or a bank guarantee
is typical.
Rights of Renewal: options to
renew can be granted annually,
biannually, or for a further five
years. the length and terms of
options are subject to negotiation.
Break Options and Terminations:
options are negotiable but
tenants should be aware of notice
periods to terminate otherwise
leases can continue automatically.
in most cases, if notice is not
given either 6 or 12 months in
advance, the lease will
automatically continue for an
additional year or in some cases 5
years. some lease agreements
allow for the premature exit of a
lease with the condition of a
penalty. in some cases, the
penalty is set out in the lease
agreement. if a penalty clause is
not included in a lease agreement,
then the lease term is usually
considered as fixed with the
tenant obligated to pay rent for
the remaining term.
Tenant and Landlord Obligations:
tenant obligations are internal
repair and building and liability
insurance, while landlord
obligations are typically external
repairs, structural repairs,
maintenance and loss of rent
insurance.
Subletting: Generally subletting
is allowed with the written
consent of the landlord. the
landlord must accept the
subtenant if they have an average
covenant, but is allowed to
prohibit subletting if the use of
the premises by a subtenant
substantially deviates from the
original use by the main tenant. if
not explicitly mentioned in a lease
agreement, tenants are able to
charge higher rents to subtenants
then what they pay to the
landlord.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
Legal Environment Concerning
Brokerage Law
Agents need a trade licence but
no specific education to practice
in Germany. German brokerage
law is governed by the German
Civil Code. in general, if a property
is introduced to a prospective
tenant, and the tenant views the
property with the introducing
agent, then the tenant is legally
obligated to pay the agent a fee if
the tenant signs a lease
agreement on that property.
in many cases local management
may have already been active in
the market and have received
offers and viewed with other
agents before they were notified
of an existing instruction with
another sole agent. it can then be
a problem to identify which
brokerage firm has a legal right to
receive fees and to determine the
total brokerage fee of the
transaction.
this can be avoided if the real
estate department of the tenant is
aware of this environment and
notifies local management not to
go to market unless instructed at
the appropriate time. if a tenant
has received offers but have not
viewed the property, they can
release their obligations to pay a
fee if they send back the offers to
the agent who made the offer by
formally rejecting them in writing.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in euros per
square metre per month and are
paid monthly in advance. usually
they include costs of insurance,
caretakers, cleaning,
maintenance, public taxes and
consumption costs.
Local Property Tax
(Grundsteuer): these taxes are
assessed on a percentage of the
notional value of the building and
paid by the landlord on an annual
basis. these costs are passed on
to a tenant at generally 10-15% of
the monthly building service
charges. the monthly service
charge includes the local property
tax.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually 3 to
4 months gross rent (including
parking) for a lease
agreement for 5 years with a
5 year extension or 10 year
lease term. A fee of 2.5 to 3.5
months gross rent will be
charged for a lease length
under 5 years. traditionally,
tenants pay fees although in
some cases, depending on the
market, landlords are willing
to pay some of the fees.
Freehold – Market fees for the
sale of freeholds, usually paid
by the seller are 3-5% of the
purchase price.
subletting – in a landlord’s
market, a subtenant would
pay fees to the agent
instructed by the main tenant
equivalent to 2.5 to 4 months
gross monthly rent (including
parking) as set out above.
However, in tenant friendly
markets, subtenants will use
their leverage to ask for rent
free periods, costs for
improvements to be assumed
by the main tenant and have
the main tenant assume
commission fees.
•
•
•
gERMAnY
bnp pARibAS REAl EStAtE �0
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
Property Transfer Tax
(Grunderwerbsteuer): For the
purchase of a property, the
purchaser will be responsible for
paying a property transfer tax of
3.5 – 4.5 % depending on German
federal states.
Value Added Tax: the current VAt
rate in Germany is 19% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs and property
transfer tax.
Other Taxes/Costs: to finalise the
purchase of a property, a
registered notary must be
instructed who will charge a fee
of 1% of the purchase price.
Generally, the purchaser assumes
the notary costs.
General Market Practices
Basis of Measurement: there are
three standard measuring
practises:
net base area or nGF (netto
Grundfläche) – this includes
main usable space; ancillary
space such as toilets, kitchens
and parking spaces;
separating walls; circulation
space; and area used for
technical uses and elevators.
Gross base area or BGF
(Brutto Grundfläche) – this
includes the net base area
calculation (nGF) including
the calculation of the area of
the shell and core of the
building.
GiF (Gesellschaft für
immobilienwirtschaftliche
Forschung, translate as
society for real estate
research) – this is the most
tenant friendly calculation
as it excludes the calculation
of areas used for technical
uses and elevators and the
calculation of the shell and
core of the building. the
difference in spatial
calculation between the
GiF and BGF methods is
between 20-30%. this is
the most commonly used
area calculation for rent
in Germany.
•
•
•
in addition, a pro-rata share of
common areas may be added by
landlords to gain rent for
entrance halls, etc. Alternatively,
a higher unit rate may be quoted
on true useable areas to
compensate.
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard and
such costs are borne by the
landlord. usually a top cooling/
fan pipe system is installed in
new office developments. Full air
conditioning is only installed in
high class buildings sometimes.
When letting second generation
space, the landlord will generally
assume the costs of installing
partitioning according to a space
plan provided by the tenant.
When vacating premises, the
tenant is responsible for
reinstating the space in the
condition that they had first
occupied the space. tenant
improvements that were
undertaken during occupancy can
be sold to the landlord. often,
leases will stipulate that the
landlord has a right of first
refusal to purchase the
improvements from the tenant.
gERMAnY
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
Use of Space: Companies typically
occupy office space as cellular
offices for one or two people. open
plan space is becoming more
common but the size of the open
space is subject to ceiling height.
the use and density of space must
be in accordance with the
Arbeitsstättenrichtlinienverordnung
or Federal Workspace Guidelines
that are administered by the trade
supervisory office. these
guidelines govern the distance
from natural light, position of a
desk, position of a pC on the desk
and so on that must be taken into
account when drafting a
workspaces plan.
Holidays
there are certain times of the
year when the speed of
transactions are significantly
reduced due to holidays. different
federal states in Germany have
summer school holidays of six
weeks beginning as early as the
end of June and the latest from
the end of August. there are also
a number of public holidays
during the middle of the week in
May and June, when many people
will take holidays for a number of
days. easter school break is
generally around mid of March
and mid of April. Many people in
Germany begin their Christmas
holidays one week before
Christmas and return on the
second week of January.
gERMAnY
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Germany
Country Statistics
population (thousands) 11,149
surface area (km²) 132,000
density (per km²) 84
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 294 306 315 305
GDP AnnUAl % 4.5 4.0 2.9 -3.1
net Direct foreiGn inveStment (US$ millionS) 1,175 -3,303 -3,122 -2,870
lAboUr force (millionS) 4.9 4.9 4.9 5.0
UnemPloyment rAte % 8.9 8.3 7.6 8.9
inflAtion rAte AnnUAl % 3.2 2.9 4.1 0.4
AverAGe reAl WAGeS AnnUAl % 1.3 1.2 4.6 6.3
GDP Per heAD ($ At PPP) 27,610 29,400 30,910 30,140
lenDinG intereSt rAte 6.3 7.0 7.4 7.2
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Athens 772,072
salonika (thessaloniki) 749,048
piraeus 182,671
patras 153,344
peristeri 137,288
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
gREECE
Athens
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Greece
Political Structure
Greece is a parliamentary republic whose president
is elected by parliament to serve five year terms.
the Hellenic parliament is unicameral parliament
consists of 300 seats with members elected by
popular vote to serve four-year terms.
Legal Structure
the Greek legal structure is european civil system
based on codified roman law (itself based on ancient
Greek law) with influences from German legal
tradition. the Greek judiciary consists of three types
of court; civil, criminal and administrative that
operate at three levels of jurisdiction.
Hours of Business
the main business hours are Monday to Friday
09:00am – 17:00pm.
Visas
Greece is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months that should be
applied for at the Consulate General of Greece.
Transport
the main international airport in Greece is Athens
international Airport eleftherios Venizelos
(www.aia.gr) south east of Athens city centre.
Bus and a three line suburban train system connect
Athens. the state company, the Attikko Metro
(www.ametro.gr) runs the system, provides
timetables and is currently working to expand the
network. outside of Athens, the only rail connection
is between Athens and thessaloniki. Most travel is
done by short haul internal flights or by bus.
International Dialling Code
the country code is + 30
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the invest in Greece bureau:
www.investingreece.gov.gr
bnp pARibAS REAl EStAtE ��
gREECE
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Greece
gREECETypical Lease Terms
Legislation: Commercial leases
are governed by the Greek Civil
Code and presidential decree
34/1995.
Lease Length: the minimum
initial lease length is legally
prescribed at 12 years. it is
generally advisable that the lease
contract bears what is legally
known as a “certified date” (the
date of registering the lease
contract with the relevant tax
authority or notary public).
special lease contracts may also
be agreed on the basis of
alternative legal arrangements.
Rent Escalation/Rent Review:
rent is adjusted annually based on
the Cost of Living index. the basis
of rent escalation is freely
negotiable and in the past,
escalation clauses of inflation plus
5% were not uncommon. over the
last few years the accepted norm
for escalation clauses is inflation
or inflation plus 1% or 2%.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
Generally a deposit of 2 or 3
months gross rent is payable
upon the signing of the lease
contract.
Rights of Renewal: options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may
automatically renew for an
indefinite period if the tenant
continues to use the property
after the end of the original lease
if there is no objection by the
landlord.
Break Options and Terminations:
the tenant has the right to
terminate the lease 2 years after
its commencement. prior written
notice must be served to the
landlord 6 months after the end
of the 2 year period and a
compensation of 4 months rent
must be paid to the landlord.
upon expiry of a 12-year lease the
landlord may terminate the lease
provided that 9 months prior
written notice is served and that
the landlord pays the tenant
compensation equal to 24 months
rent. if such notice is not served,
then the lease is automatically
renewed for another 4 years.
upon completion of 16 years from
the commencement of the initial
lease the landlord may terminate
the lease without paying
compensation at all. if the lease is
not renewed for another definite
duration after the completion of
16 years, then it is considered to
be of indefinite period and may
therefore be terminated by either
party with appropriate notice
(generally one month).
Tenant and Landlord Obligations:
tenant obligations are internal
repair, maintenance and content
insurance whilst landlord
obligations are external repairs,
structural repairs, maintenance
and building insurance.
Subletting: subletting is allowed
with the written consent of
the landlord as long as the
subtenant agrees to accept all
responsibilities initially accepted
by the main tenant.
Legal Environment Concerning
Brokerage Law
Agents need to be registered to
practice in Greece if they are to
enjoy the privileges provided to
them by Greek law, but private
contracts to pay an agency fee to
a non-registered agent are still
enforceable.
if a property is introduced to a
prospective tenant and is viewed
with the introducing agent, then
the tenant is obligated to pay the
agent a fee if the tenant signs a
lease agreement on that property.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Greece
gREECEOccupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge (Koinohrista):
Building service charges are
quoted in euros per square metre
per month and are paid monthly
in advance with the rent.
Local Property Taxes: these
consist of municipal taxes and
municipal duties and are
generally levied through payment
of electricity bills. they may vary
significantly per geographic
region. the maximum charges are
publicised by the mayor’s office,
but informal negotiations with
local authorities to obtain lower
rates do exist (particularly for
sizeable or important buildings).
Acquisition Costs
typical acquisition costs that
a company will have to pay
when buying or leasing new
premises include:
Agents Fees
Leasing – Fees are usually
1 month’s net rent plus VAt or
10% to 12% per annual rent
plus VAt.
Freehold – Fees are
negotiable and depend on the
size of the property involved
and the particular market
characteristics at the time.
the standard fee is 2%. it is
uncommon to find fees below
1% of the transaction value for
a reasonably large deal (over
€ 5 million). Fees can also be
up to 3% of purchase price.
sublease – same as leasing
fees.
it is common in Greece for agents
to get paid by both parties in a
transaction. in these cases
separate instructions from both
parties are required to be signed.
•
•
•
Property Transfer Tax: two
systems exist. For land and
properties with permits prior to
Jan 2006 has the purchaser
responsible for paying a property
transfer tax of 9-11% on the
value of the property exchanged
(as quoted on the relevant spA).
For properties with permits post
Jan 2006, transactions are subject
to VAt.
VAT: VAt in Greece is currently
19%. professional fees are subject
to VAt.
Other Taxes/Costs: to finalise the
purchase of a property, a
registered notary must be
instructed who will charge a fee
of approximately 1.2 % of the
purchase price. Generally, the
purchaser covers for notary costs.
there are also obligatory
minimum legal fees that typically
equate to 1.2 – 1.5% of the
purchase price. A number of other
supplementary taxes are
applicable depending on the
transaction and a local tax
consultant should be utilised.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Greece
General Market Practices
Basis of Measurement: there is
no standard basis of
measurement in Greece but
premises are typically measured
based upon the Gross Area
(including external walls but not
common space unless solely
utilized by tenant) stated on
architectural plans for planning
approval.
Fit Out/Reinstatement/
Dilapidations: the tenant is
typically responsible for all costs
associated with fit out. While the
tenant has a legal responsibility
to remove improvements from the
premises at the expiry of the
lease, in practice this is rarely
required as the majority of
landlords prefer the
improvements to remain.
Use of Space: traditionally older
offices in Greece have tended to
be constructed as cellular offices.
recently in newer buildings,
offices are designed to be
predominantly open plan.
Holidays
there is no particular period
during the year when the speed of
transactions is significantly
affected by holidays. peak holiday
periods tend to be during
midsummer (mid-August) and
between Christmas and new Year.
Acknowledgement
We would like to thank
Konstantinos Markogiannakis
and Anna nazou of danos &
Associates for their assistance in
the preparation of this country
review.
gREECE
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Greece
Country Statistics
population (thousands) 10,071
surface area (km²) 93,000
density (per km²) 108
Local currency Forint
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 179 181 182 171
GDP AnnUAl % 4.0 1.2 0.4 -6.0
net Direct foreiGn inveStment (US$ millionS) 3,572 2,276 2,449 2,656
lAboUr force (millionS) 4.2 4.2 4.2 4.2
UnemPloyment rAte % 7.5 7.3 7.8 10.5
inflAtion rAte AnnUAl % 3.9 8.0 6.1 3.3
AverAGe reAl WAGeS AnnUAl % 4.1 -0.1 1.2 -2.8
GDP Per heAD ($ At PPP) 18,460 19,240 19,800 18,750
lenDinG intereSt rAte 8.1 9.1 10.2 11.0
exchAnGe rAte to US$ 210.3900 183.6258 172.1133 218.4557
Major Cities
City Core population
Budapest 1,825,153
debrecen 204,340
Miskolc 172,993
szeged 158,646
pécs 157,970
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
HungARYBudapest
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Hungary
Political Structure
Hungary is a parliamentary republic with a president
as head of state elected by the national Assembly
to serve a 5 year term. the parliament or national
Assembly (orszaggyules) is unicameral and consists
of 386 members are elected who serve four
year terms.
Legal Structure
the Hungarian judiciary is based on the German-
Austrian legal system and is comprised of a tiered
structure of local municipal district courts, country
courts, the Court of the Capital City and the supreme
Court.
Hours of Business
the main business hours are Monday to Friday
08:00am – 16:30pm.
Visas
Hungary is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months applied for at
the local regional agency of the Hungarian
immigration and nationality office.
Transport
the principal international airport is Budapest
Airport Zr (www.bud.hu), located at Ferihegy 16
kilometres to the south east of Budapest.
Budapest’s public transportation system consists of
buses, trams and suburban railways. it is connected
to other cities in Hungary by a national railway
system. information can be obtained from BKV
(www.bkv.hu)
International Dialling Code
the country code is + 36
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the Hungarian government investment bureau:
www.itd.hu
bnp pARibAS REAl EStAtE ��
HungARY
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Hungary
HungARYTypical Lease Terms
Legislation: the Hungarian Civil
Code and specifically, the Leases
Act 1993, governs commercial
leases in Hungary.
Lease Length: there are no set
limits for lease terms so they can
be indefinite although in practice
3 and 5 year leases are typical. 5
years tends to be more typical of
class A buildings whereas class B
have leases between 1 to 3 years.
Hungarian law makes a
distinction between commercial
leases and leasehold, which
refers to agricultural land.
Break Options and Terminations:
options are negotiable, however,
tenants should be aware of notice
periods as options will expire and
become null and void if notice is
not delivered on time. in most
cases, the penalty for early lease
termination is subject to
negotiations and depends on
current market conditions.
termination notice periods for
landlords are one year and 15
days for tenants.
Rent Escalation/Rent Reviews:
rents escalation is based on the
Hungarian service price index or
european Consumer price.
indexation is either annual or
whenever the index has increased
by, for example, more than 2-3%.
rent indexation is generally
upwards only.
Rights of Renewal: the tenant
has no security of tenure by law.
Leases will terminate at the date
of expiry, and must be
renegotiated. if an option to
extend was previously agreed,
then the current lease terms and
rent will continue for the new
lease, as detailed in the lease.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
either a deposit of 3-4 months net
rent or a bank guarantee is
necessary to complete the lease.
Tenant and Landlord Obligations:
normally the landlord is
responsible for building
maintenance, insurance, and
technical installations and tenant
are responsible for small
maintenance and insurance
within the premises. Maintenance
obligations should be clearly spelt
out in the lease agreement.
Subletting: Generally subletting
is allowed, but only with the prior
written consent of the landlord.
the landlord is not obliged to
accept the subtenant, however, in
practice if the subtenant’s
covenant is good, then it will
generally be accepted.
Legal Environment Concerning
Brokerage Law
there is no legal requirement to
have a license in order to trade as
an agent in Hungary. Generally,
each party is responsible to pay
their respective agents. on
occasions however the landlord’s
agent may sometimes be
permitted to earn a fee of 0.5
months rent from the tenant. the
tenant agent will only earn fees
from the tenant directly.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
or us dollars per square metre
per month (also Forints) and are
paid monthly or quarterly in
advance.
Service Charge: Building service
charges are quoted in euros or us
dollars per month or quarter and
are paid monthly or quarterly in
advance. service charges are
sometimes charged in the local
currency.
Local Property Tax: paid directly
by the landlord and invoiced to
the tenant.
bnp pARibAS REAl EStAtE �0
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Hungary
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Leasing – Fees are
usually equal to 2 months net
rent for a lease agreement.
Freehold – Fees are
negotiable but are typically
1.5–2.5% of the purchase
price, and are paid by the
seller.
subletting – same as leasing.
Property Transfer Tax: For the
purchase of a property, a property
transfer tax of 10% will be levied,
based on the purchase price of
the property plus VAt. the VAt
will be normally refunded after
approximately 3 months. the
responsibilities of the costs are
usually negotiated and very often
the costs are split 50:50 between
vendor and purchaser.
Value Added Tax: the VAt (ÁFA)
rate in Hungary is 20% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs, finance tax and
property transfer tax.
•
•
•
Other Taxes/Costs: For the
purchase of a property legal and
notary costs of approximately 0.5-
1% in total, based on the purchase
price of the property plus VAt are
payable. the responsibilities of
these costs are usually negotiated
and very often the costs are split
50:50 between vendor and
purchaser.
General Market Practices
Basis of Measurement: there are
two standard measuring
practises:
net Lettable Area or Building
owner’s and Manager’s
Association standard (BoMA)
– this is the most commonly
used area calculation and is
used for calculating the rent.
BoMA includes main usable
space, ancillary space such as
toilets, kitchens, separating
walls, and circulation space.
Areas used for technical use,
structural walls and elevators
are excluded. A “gross-up”
factor of 5 – 12 % may be
applied to the net Lettable
Area, particularly if the
building is new.
Gross Base Area or BGF
(Brutto Geschossfläche) – this
area is measured from
internal wall to internal wall
and includes all the gross
area within.
•
•
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard and
such costs are borne by the
landlord. upgrading space to full
air conditioning is generally the
responsibility of the tenant as
only a top cooling/fan pipe system
is normally installed in new
buildings. When letting second
generation space, the landlord
will generally assume the costs of
installing partitioning according
to a space plan provided by the
tenant. When vacating premises,
the tenant is responsible for
reinstating the space to the
condition that they had first
occupied the space. tenant
improvements that were
undertaken during occupancy
cannot be sold to the landlord,
unless otherwise stipulated in the
lease. if the landlord wishes, they
may ask for the premises to
remain in their existing condition.
Use of Space: Both open plan and
cellular offices are predominantly
used in Hungary.
Holidays
August and January tend to
generally be the main holiday
periods when the speed of
transactions may be affected.
HungARY
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Ireland
Hungary
Country Statistics
population (thousands) 4,233
surface area (km²) 70,000
density (per km²) 60
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 168 178 174 161
GDP AnnUAl % 5.7 6.0 -2.3 -7.5
net Direct foreiGn inveStment (US$ millionS) -15,589 4,081 9,363 -752
lAboUr force (millionS) 2.1 2.2 2.2 2.2
UnemPloyment rAte % 4.5 4.6 6.1 13.0
inflAtion rAte AnnUAl % 3.9 4.9 4.1 -3.5
AverAGe reAl WAGeS AnnUAl % -0.7 -0.0 0.3 -2.0
GDP Per heAD ($ At PPP) 41,315 44,259 43,891 40,620
lenDinG intereSt rAte 5.3 6.4 7.0 3.9
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
dublin 952,692
Cork 179,954
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
iRElAnd
dublin
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
Ireland
Political Structure
ireland is a parliamentary republic with a president
as chief of state who is directly elected by the people
to serve for a 7-year term. the irish parliament
(oireachtas) is bicameral and consists of the senate
(seanad eireann) and the House of representatives
(dail eireann). the senate oversees and advises on
legislation passed by the House of representatives
where legislative power resides. the majority party
or coalition nominates the prime minister
(taoiseach).
Legal Structure
the irish legal system is based on english common
law and modified to incorporate local concepts. the
tiered court system consists of district courts at the
local level, circuit courts, high courts, the court of
criminal appeal and the highest court, the supreme
Court.
Hours of Business
the main business hours are Monday to Friday
09:00am – 17:00pm.
Visas
ireland is not a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months.
Transport
the main airport is dublin international
(www.dublinairport.com) located approximately
10 kilometres north of dublin city centre. there is no
dedicated rail link to the airport.
train services (www.irishrail.ie) connect the main
cities and there are extensive bus and coach services
around dublin (www.cie.ie) and the rest of ireland.
International Dialling Code
the country code is + 353
Coordinated universal time (utC)
eastern standard time + 5 hours
Invest in Bureau
Further country information can be obtained from
the invest in ireland bureau:
www.idaireland.com
bnp pARibAS REAl EStAtE ��
iRElAnd
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Ireland
iRElAndTypical Lease Terms
Legislation: the law that governs
leases is the Landlord and tenant
Act 1980 together with various
ancillary legislation.
Lease Length: 20-25 year leases
incorporating break options
(depending on the covenant on
offer) are typical in ireland. Break
options are more likely to be
granted in a depressed market.
Lease lengths have shortened in
recent years and break options
are commonplace (particularly
for office & industrial/logistic
lettings) in the current market.
Rent Escalation/Rent Review:
rent will be subject to an upward
only review. this clause is usually
every 5 years but in rare
instances can be other periods
such as every 7 years, although
this tends to be a historic feature
of the market. the new rent will
be agreed between the parties
and is based primarily on open
market lettings and secondly, on
rent review evidence. if
agreement cannot be reached, an
arbitrator or independent expert
will be appointed to set the new
rent. there is usually a provision
for referral to third party
contained within the lease.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as accounting/
banking details and access to
company information. either a
deposit of 3 months rent or a bank
guarantee are necessary to
complete the lease depending on
strength of covenant.
Right of Renewal: on the basis
that tenants occupy premises for
a period in excess of 5 years, they
have an automatic right of
renewal by law on expiry of the
lease and can apply for a new
lease on similar terms as the
original one. under new
legislation, both parties can now
agree to contract out of this
protection by signing a deed of
renunciation.
Break Options and Terminations:
options are negotiable depending
on market circumstances and the
quality of the tenant’s covenant.
in other instances breaks at
intervals of 5 years can be
negotiated, these are subject to
written notice and may be subject
to payment of monetary penalties.
Tenant and Landlord Obligations:
When the building is entirely
occupied by one tenant, the
tenant will normally take on full
repairing and insuring obligations
(Fri) for the interior and exterior
of the space. in buildings that are
in multiple occupational, the
tenant obligations are generally
internal repair, maintenance and
insurance (iri) while landlord
obligations are external repairs,
maintenance and insurance.
the landlord will charge these
costs to the tenant through the
service charge.
Subletting: Generally subletting
is allowed with the written
consent of the landlord, such
consent not to be unreasonably
withheld or delayed. the
subtenant is normally required to
sublet at a rent not less than the
passing rent, however can sublet
at a rent higher than the passing
rent.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Ireland
Legal Environment Concerning
Brokerage Law
Commercial agents need to be
registered to practice in ireland
and must hold an auctioneers
licence. the Auctioneers and
House Agents Acts 1947-1973
govern brokerage in ireland.
Agents are normally appointed by
both sides (landlord and tenant)
in a transaction and each side will
pay their own agents fees. Agents
will generally act in an advisory
capacity initially and then
negotiate on behalf of the client,
on the client’s instructions. it is
considered to be a conflict of
interest if the same broker
represents both the landlord and
the tenant. the royal institution
of Chartered surveyors (riCs)
regulations require that both
parties must be notified if a
conflict exists.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per annum and
are paid quarterly in advance.
ireland generally uses calendar
quarter (gale) days, which are;
1 January, 1 April, 1 July and
1 october.
Service Charge: Building service
charges are quoted in euros per
square metre per annum and are
paid quarterly in advance along
with the rent.
Local Property Tax (Commercial
Business Rates): these municipal
taxes are assessed on a
percentage of the notional rental
value of the space and paid
directly to the local council by the
tenant, normally on a semi-
annual basis.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually 10%
– 15% of the first year’s rent.
For larger or higher value
instructions this percentage
can be negotiated as
appropriate and are subject to
written agreement. Fees will
also depend on the location of
the property, with regional
properties sometimes
commanding higher fees.
•
Freehold – Fees for the sale or
purchase of freeholds are
based on 1.5% of the purchase
price. this percentage may be
increased for small properties
or reduced for larger
instructions. Fees will also
depend on the location of the
property, with regional
properties sometimes
commanding higher fees.
subletting – same as leasing.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property, the buyer will be
responsible for paying a property
transfer tax of 6%, which is based
on the purchase price of the
property.
Value Added Tax: the current
VAt rate in the ireland is 21.5%
and is payable on rent, building
service charge, agents fees and
legal costs.
•
•
iRElAnd
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Ireland
General Market Practices
Basis of Measurement: the
measurement of buildings in
ireland is governed by the sCs
Code of Measuring practice
(currently under review). this
document defines what should
and should not be included.
office Accommodation – City
centre properties are
measured on a net internal
basis (niA). this is the “carpet
area” and excludes ancillary
space such as toilets,
staircases, elevators, plant
areas and parking spaces.
suburban office properties
are measured on a gross
internal (GiA) basis and not
on a niA basis.
industrial Accommodation –
Measured on a gross external
basis (GeA). this includes
everything within the external
walls of the building.
retail Accommodation –
Measured on a niA basis.
•
•
•
•
Fit Out/Reinstatement/
Dilapidations: new office
developments are provided by the
landlord with raised floors, floor
boxes to a ratio of 1:10 square
metre, suspended ceilings,
recessed light fittings and air
conditioning. the tenant will
typically be responsible for
providing internal partitioning,
cabling, carpeting, security and
facilities such as reception areas,
post rooms and kitchens. When
vacating premises, the tenant is
responsible for reinstating the
space to the condition it was at
the start of the lease.
the tenant will have to remove all
improvements made to the
property and reinstate the
premises to the original condition
on handover from the landlord. if
the tenant chooses not to do this
work themselves, a dilapidations
estimate will be agreed between
building surveyors acting for both
sides. this will be the amount to
be paid by the tenant in lieu of the
reinstatement works.
Use of Space: Companies typically
occupy office space as open plan
space with a small number of
executive offices and meeting
rooms. retail premises are
generally let on a shell and core
basis with services brought to a
point within the unit, for
connection by the tenant.
Holidays
August and december are the only
periods in the year when holidays
will affect the speed of projects.
there are also a number of Bank
holidays. these fall on Mondays,
and are in May, June, August,
october and the Friday and
Monday at easter. some
professionals also take holidays
around the easter weekend as
most schools are on holidays (Mid
term break).
iRElAnd
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Ireland
Country Statistics
population (thousands) 58,435
surface area (km²) 301,000
density (per km²) 194
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 1,668 1,693 1,675 1,597
GDP AnnUAl % 2.1 1.5 -1.0 -4.6
net Direct foreiGn inveStment (US$ millionS) -3,472 -52,082 -15,023 -16,975
lAboUr force (millionS) 24.7 24.7 25.1 25.3
UnemPloyment rAte % 6.8 6.1 6.8 8.2
inflAtion rAte AnnUAl % 2.1 1.8 3.4 0.5
AverAGe reAl WAGeS AnnUAl % 1.4 0.8 0.4 0.5
GDP Per heAD ($ At PPP) 29,620 30,590 30,930 29,670
lenDinG intereSt rAte 5.6 6.3 6.8 4.9
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
rome 2,648,843
Milan 1,305,591
naples 1,046,987
turin 921,485
palermo 689,349
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
itAlY
rome
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
Political Structure
italy is a parliamentary republic with a president as
head of state elected for a 7 year term by
parliament. the state of italy consists of twenty
regions with governing powers and five of these
sardinia, sicily, trentino-Alto Adige, Valle d’Aosta,
and Friuli-Venezia Giulia have some degree of
autonomy. in practice the italian state remains
highly centralised with legislative power remaining
with parliament. the parliament is bicameral and
consists of the Chamber of deputies (Camera dei
deputati) and the senate (senato della repubblica).
Legislation can be issued by either house but to gain
assent must pass in both houses.
Legal Structure
the italian legal system is a civil law system based
on roman law and modified with the napoleonic
code. the judiciary consists of the courts who deal
with ordinary civil and criminal cases, administrative
issues, accounting, military, and taxation. Jurisdiction
over civil and criminal matters is by the Judicial
order. the order is divided into judges and
magistrates of the public prosecutor’s office who
perform the function of investigators and judge.
Hours of Business
the main business hours are Monday to Friday
08:00/09.00am – 12.00/13.00pm and 14.00/15.00 –
18.00/19.00pm
Visas
italy is a member of the schengen area agreement.
Holders of an eeA (eu Member states, iceland,
Liechtenstein and norway) or swiss passport do
not require a visa. nationals from eu-countries as
well as switzerland and Liechtenstein may also
enter without a visa. Citizens of the united states of
America do not require a visa for entry. A residence
permit is required if intending to stay for a period
exceeding 3 months obtained from the local
italian authorities.
Transport
the principle international airports are to be found
in rome and Milan. rome’s Fiumicino Airport (www.
adr.it), also known as Leonardo da Vinci, is located
26 kilometres south west of the city centre. there is
an express rail service direct to termini central
station that takes 15 minutes to reach the city
centre. details can be obtained at www.
ferroviedellostato.it
Milan has two airports. Milan Linate international
Airport (www.sea-aeroportimilano.it) that is located
7 kilometres east of Milan. the airport is connected
to the city via bus and taxi services. Milan Malpensa
international Airport (www.sea-aeroportimilano.it) is
located 45 kilometres north west from central
Milan. Malpensa is connected by express train that
run every half-hour to Milan’s stazione nord,
Cadorna.
italian state railways (Ferrovie dello stato)
(www.ferroviedellostato.it) provide an effective
means of transport through a high-speed inter City
and european train network that is undergoing
expansion in italy.
International Dialling Code
the country code is + 39
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the invest in italy bureau:
www.invitalia.it
bnp pARibAS REAl EStAtE ��
itAlY
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
itAlYTypical Lease Terms
Legislation: the statue law that
governs leases is based on italian
Law ex lege 392/78 and
subsequent amendments.
Lease Length: Leases must legally
be at least 6 years in length.
Leases are therefore generally for
6 year terms with an automatic
renewal period for the tenant of
an additional 6 years.
Lease contract: there is no
standard form of lease contract in
italy. the form of lease is typically
dictated by the landlord and will
often be specific to each
individual landlord (with some
general articles required by laws).
Rent Escalation/Rent Review:
rents are linked to the istAt Cost
of Living index and will be
increased annually based upon
75% of the index, although in
some cases it is 100%.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating. A
deposit of 3 months or more
usually six months rent or a bank
guarantee for the deposit period is
necessary to complete the lease.
Rights of Renewal: According to
italian law leases are
automatically renewable for
additional 6 year terms at the
same rent (plus istAt increases).
Longer renewal periods can be
negotiated.
Break Options and Terminations:
this does not legally have to be
provided but it can be agreed
upon between the landlord and
tenant. in this case, the tenant
can have the right to terminate
the lease with 12 months prior
written notice as long as it is
specified in advance in the lease
contract.
Tenant and Landlord Obligations:
tenant obligations are usually the
ordinary maintenance and annual
services charges. the landlord
provides the extraordinary
maintenance.
Subletting: the subletting of
property is allowed but only if it is
stated in the lease contract and
with the prior written consent of
the landlord.
Legal Environment Concerning
Brokerage Law
in italy the agents of real estate
consultants must be registered by
the local trade chamber after
passing its examination. After
registration the agent obtains the
official licence to operate that is
essential in order to be paid. in a
real estate company the licence
belongs to the manager who then
delegates the other members of
the company to operate.
Agents work in several different
ways with clients:
a) having an “exclusive
instruction” (incarico in esclusiva)
from the landlord who authorises
the service provider to sell or let
a property. in this case the agent/
company is paid by the landlord.
every other agent who wants to
fill the building with a client
cannot contact the landlord
directly but must go through the
company who has the “incarico”.
b) having an instruction for a new
space search. in this case the
company has to be paid by the
client who is looking for space and
act as a “filter” for those agents
who want to get in contact with
the client in order to propose
other buildings.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
c) without instruction. in this case
agents have to ask the “official”
agent in charge of the building or
the client for the right to co-
operate. this leaves the possibility
that the building will be offered
directly to any clients of the
asking agent.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per annum and
paid quarterly in advance. Value
Added tax and services charges
are never included in the rate
price. in the contract areas are
specified as rooms rather than
square metres.
Service Charge: Building service
charges are quoted in euros per
annum and paid quarterly in
advance. they are based on an
estimated budget that will be
adjusted with the effective costs
at the end of the year.
Local Property Tax: paid by the
landlord (imposta Comunale sugli
immobili). some other local taxes
have to be paid directly by the
tenant (ex. “tassa rifiuti”).
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents’ fees
Leasing – Fees are 10% up to
12% of the net annual rent
(“canone a regime”) to be paid
by the two parties (tenant
and Landlord), except where
the agent receives an
exclusive instruction from the
client the fee from the other
party is not given.in this case,
the agents’ fees come only
from the client.
Freehold – usually for a
property acquisition the fees
are paid by both parties
(vendor and purchaser) with a
percentage from 1% to 2% of
the sale price from each party.
in case of a larger purchase
the percentage can decrease
below 1%. in case of “co-
operation” with another
agency each will be paid by
their client.
subletting – subject to
agreement with the first
tenant (10–12% of annual year
rent or a percentage of the
savings obtained).
renewals – usually renewed
lease contracts are signed
directly by the landlord with
the tenant without agency
involvement.
Lease renegotiation – 5% of
the net annual rent (“canone a
regime”) plus an incentive fee
connected to results agreed
with the client.
•
•
•
•
•
Property Transfer Tax (Stamp
Duty): Asset deal: sales of
commercial real estate carried
out by VAt-taxable persons are
exempt from VAt unless: (a) the
seller is a construction company
that built or renovated the
relevant property not more than
four years prior to the sale; (b) the
buyer is a VAt-taxable person
with a limited right to reclaim VAt
(e.g. banks or insurance
companies with a VAt
deductibility percentage equal to
or below 25%); (c) the buyer is a
consumer; (d) the seller expressly
elected to subject the transaction
to VAt in the sale and purchase
agreement. VAt can be reclaimed.
Value Added Tax: the VAt rate in
italy is 20% and is due on all
forms of transactions including
rent, building service charge,
agents fees. it is never included in
the price.
Other Taxes/Costs: transactions
subject to VAt are also liable for
the following additional transfer
taxes: (a) registration tax at a
fixed amount of eur 168; (b) 1%
cadastral tax; and (c) 3%
mortgage tax. taxes are reduced
to 2% (one-half) for transactions
involving real estate funds, or for
those transactions which involve
leasing companies, banks and
financial intermediaries.
registration, mortgage and
cadastre taxes are not
recoverable. the cost for the
itAlY
bnp pARibAS REAl EStAtE �0
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
notary deed is the responsibility
of the purchaser. the fee of the
notary has to be agreed with the
purchaser with regard to the
transaction. to finalise a
transaction both parties will
generally appoint a registered
solicitor to agree the final
contract. often tenants will utilise
the services of a financial/fiscal
consultant and/or a lawyer who
specialises in real estate. the fee
for these services will be based
on a pre-agreed charge.
General Market Practices
Basis of Measurement: office
premises are usually measured on
a “carpetable” basis. Basically
this measurement will exclude
ancillary space such as
staircases, elevators, plant areas,
and parking spaces. in most
buildings the core of the building
does not contain lavatories so
they are included in the
measurement of the premises.
outdoor terraces are not included
in the measurement of the
premises for the calculation of
rent for offices. often office
buildings in the center of cities
have limited parking places, but
they (and their cost) are not
included in the building area.
Fit Out/Reinstatement/
Dilapidations: new office
developments include suspended
ceilings, fluorescent lighting,
carpeting, central heating, air
conditioning and raised floors as
standard with the costs borne by
the landlord. Landlords do not
provide for fit out or moving costs
but they will sometimes offer a
free rent period if these costs are
extensive. upgrading space is a
responsibility of the incoming
tenant. All works, additions and
furnishings made by the tenant
will belong to the landlord who
may decide at the end of the
contract to keep them. if not when
vacating premises the tenant is
responsible for reinstating the
space to the condition it was in at
initial occupation. tenant
improvements that were
undertaken during occupancy may
be required to be removed if
requested by the landlord, unless
otherwise stipulated in the lease.
Use of Space: Companies occupy
office space usually as cellular
offices mixed with open space (for
projects team or commercial
departments) and meeting rooms.
Holidays
in italy there are limited holidays
during the year. they are mostly
concentrated in summertime
(especially in August) and at
Christmas.
itAlY
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Italy
Country Statistics
population (thousands) 2,287
surface area (km²) 64,589
density (per km²) 35.4
Local currency Lat
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 34 38 36 30
GDP AnnUAl % 12.2 10.0 -4.6 -17.0
net Direct foreiGn inveStment (US$ millionS) 1,491 1,912 1,600 450
lAboUr force (millionS) 1.2 1.2 1.2 1.2
UnemPloyment rAte % 7.0 5.7 5.3 13.0
inflAtion rAte AnnUAl % 6.5 10.1 15.4 2.5
AverAGe reAl WAGeS AnnUAl % 15.4 19.6 4.3 -8.0
GDP Per heAD ($ At PPP) 15,348 17,435 17,076 14,680
lenDinG intereSt rAte 7.3 10.9 11.9 11.0
exchAnGe rAte to US$ 0.5597 0.5135 0.4781 0.5294
Major Cities
City Core population
riga 792,508
daugavpils 114,980
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
lAtviAriga
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Latvia
Political Structure
Latvia is a parliamentary republic with a mostly
ceremonial president as head of state. the president
is elected by the parliament to serve a four year
term. Legislative power is exercised through the
unicameral parliament (saeima).
Legal Structure
the Latvian legal structure is based on the civil law
system although it has influenced by socialist legal
traditions and practices. the judicial structure is
organised at the bottom level with district courts
that deal with hear administrative, civil and criminal
cases. regional courts receive and deal with appeals
from district courts. the highest court is the
supreme Court.
Hours of Business
the main business hours are Monday to Friday
08.30am – 17:30pm.
Visas
Latvia is a member of the schengen area agreement.
Holders of an eeA (eu Member states, iceland,
Liechtenstein and norway) or swiss passport do not
require a visa. nationals from eu-countries as well
as switzerland and Liechtenstein may also enter
without a visa. Citizens of the united states of
America do not require a visa for entry. A residence
permit is required if intending to stay for a period
exceeding 3 months obtained the office of
Citizenship and Migration Affairs.
Transport
the largest and most central airport in Latvia is riga
international Airport (www.riga-airport.com) about 8
kilometres south-west from the city centre. Access
to the city is by bus, or taxi.
Latvia has a rail service that connects the major
urban areas in Latvia and is run by Latvian state
railways (www.ldz.lv). information on rail
timetables and destinations can be obtained from
the website.
International Dialling Code
the country code is + 371
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the investment and development Agency of Latvia:
www.liaa.gov.lv
bnp pARibAS REAl EStAtE ��
lAtviA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Latvia
Typical Lease Terms
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer prices
index (or a percentage of Cpi) and
are adjusted annually. rent
reviews are upward adjustment
only.
Guarantee and Security Deposit:
rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
Rights of Renewal: the tenant is
afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Break Options and Terminations:
the tenant has no right by law to
prematurely terminate the lease.
Break options can be agreed in
rental agreements. A typical
break option is the termination of
the agreement in 6 months prior
notice. it is possible for the
landlord and tenant to agree to
an early termination depending
on the market conditions and the
specific nature of the lease.
Tenant and Landlord Obligations:
the landlord is usually
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. the landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
the property.
Subletting: the tenant is not
permitted to sublet the premises
without the prior written consent
of the landlord.
Legal Environment Concerning
Brokerage Law
there are no certain laws on
brokerage. there are brokers
associations that grant
certificates based on exams.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in local
currency on a square metre per
month basis and are paid on a
monthly basis. typically
agreements contain exchange
rate protection clauses against
currency devaluation risks.
Service Charge: Building service
charges are quoted in local
currency, on square metre per
month basis and are paid monthly
with the rent. these charges
include heating, water/sewage,
electricity and maintenance.
Local Property Tax: Local
property tax is paid by the
landlord directly but in some
cases this cost is invoiced back to
the tenant through a service
charge.
lAtviA
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Latvia
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. each party
typically pays the fee of their
contracted agent.
Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 1–4% of the agreed
purchase price.
subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): there is property transfer
tax in Latvia of roughly 2% of
market value of the property to a
set maximum of 30,000 LVL.
Value Added Tax: the current VAt
rate in Latvia is 18% and most
tenants pay VAt on rent, service
charges and notary costs.
•
•
•
General Market Practices
Basis of Measurement: For office
premises, the normal
measurement of area used to
calculate rent is the net Base
Area. this is the net leasable area
and does not include areas used
for technical use such as vertical
penetrations (elevator shafts,
stairs) or structural walls.
Fit Out/Reinstatement/
Dilapidations: Fit out is
completed to tenant specifications
and is typically financed by the
landlord. this cost is then usually
charged to the tenant as a rental
surcharge depending upon the
transaction agreement.
Use of Space: Cellular offices
dominate the market, but open
plan offices are gaining popularity
in Baltic countries.
Holidays
peak holiday season is during the
summer months from mid-June to
mid-August, when transaction
times might be affected.
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay of
newsec Advice AB for their
assistance in the preparation of
this country review.
lAtviA
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Latvia
Country Statistics
population (thousands) 3,394
surface area (km²) 65,300
density (per km²) 52.0
Local currency Litas
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 52 57 58 51
GDP AnnUAl % 7.8 8.9 3.0 -13.0
net Direct foreiGn inveStment (US$ millionS) 1,551 1,334 1,000 900
lAboUr force (millionS) 1.6 1.6 1.6 1.6
UnemPloyment rAte % 5.6 4.3 5.8 13.0
inflAtion rAte AnnUAl % 3.7 5.7 10.9 5.0
AverAGe reAl WAGeS AnnUAl % 14.9 17.7 9.8 -20.0
GDP Per heAD ($ At PPP) 15,734 17,694 18,730 16,490
lenDinG intereSt rAte 5.1 6.9 7.5 6.0
exchAnGe rAte to US$ 2.7520 2.5240 2.3570 2.6010
Major Cities
City Core population
Vilnius 578,334
Kaunas 414,174
Klaipėda 202,528
panevėžys 133,638
Šiauliai 146,800
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
litHuAniA
Vilnius
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Lithuania
Political Structure
Lithuania is a parliamentary republic with directly
elected president as head of state who serves a 5
year term. the Lithuanian parliament (seimas) is
unicameral with executive power resting with the
Council of Ministers that is comprised of the
president, prime minister and the cabinet.
Legal Structure
the Lithuanian legal system is based on civil law
system with influences from French, German and
dutch legal systems. the judiciary consists of local
courts, district courts and the Court of Appeal.
Hours of Business
the main business hours are Monday to Friday
08:00am – 17:00pm.
Visas
Lithuania is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months.
Transport
Vilnius international Airport (www.vilnius-airport.lt)
is the principle airport for the country and it is
located 7 kilometres south of the city centre. it is
connected to the city via a train service.
the country’s main cities are connected via railways
services with timetable details obtainable from sC
Lithuanian railways (www.litrail.lt/wps/portal).
International Dialling Code
the country code is + 370
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the investment in Lithuania bureau:
www.lda.lt
bnp pARibAS REAl EStAtE ��
litHuAniA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Lithuania
litHuAniATypical Lease Terms
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer prices
index (or a percentage of Cpi) and
are adjusted annually. rent
reviews are upward adjustment
only.
Guarantee and Security Deposit:
rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
Rights of Renewal: the tenant is
afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Break Options and Terminations:
the tenant has no right by law to
prematurely terminate the lease.
Break options can be agreed in
rental agreements. A typical
break option is the termination of
the agreement in 6 months prior
notice. it is possible for the
landlord and tenant to agree to
an early termination depending
on the market conditions and the
specific nature of the lease.
Tenant and Landlord Obligations:
the landlord is usually
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. the landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
the property.
Subletting: the tenant is not
permitted to sublet the premises
without the prior written consent
of the landlord.
Legal Environment Concerning
Brokerage Law
there are no certain laws on
brokerage. there are brokers
associations that grant
certificates based on exams.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in local
currency on a square metre per
month basis and are paid on a
monthly basis. typically
agreements contain exchange
rate protection clauses against
currency devaluation risks.
Service Charge: Building service
charges are quoted in local
currency, on square metre per
month basis and are paid monthly
with the rent. these charges
include heating, water/sewage,
electricity and maintenance.
Local Property Tax: Local
property tax is paid by the
landlord directly but in some
cases this cost is invoiced back to
the tenant through a service
charge.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Lithuania
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. each party
typically pays the fee of their
contracted agent.
Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 1–4% of the agreed
purchase price.
subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): there is no property
transfer tax in Lithuania.
Value Added Tax: the current VAt
rate in Lithuania is 18% and most
tenants pay VAt on rent, service
charges and notary costs.
•
•
•
General Market Practices
Basis of Measurement: For office
premises, the normal
measurement of area used to
calculate rent is the net Base
Area. this is the net leasable area
and does not include areas used
for technical use such as vertical
penetrations (elevator shafts,
stairs) or structural walls.
Fit Out/Reinstatement/
Dilapidations: Fit out is
completed to tenant specifications
and is typically financed by the
landlord. this cost is then usually
charged to the tenant as a rental
surcharge depending upon the
transaction agreement.
Use of Space: Cellular offices
dominate the market, but open
plan offices are gaining popularity
in Baltic countries.
Holidays
peak holiday season is during the
summer months from mid-June to
mid-August, when transaction
times might be affected.
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay of
newsec Advice AB for their
assistance in the preparation of
this country review.
litHuAniA
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Lithuania
Country Statistics
population (thousands) 469
surface area (km²) 3,000
density (per km²) 180
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 35 37 36 35
GDP AnnUAl % 6.4 5.2 -0.9 -5.0
net Direct foreiGn inveStment (US$ millionS) 14,610 -61,915 -25,521 2,693
lAboUr force (millionS) 0.2 0.2 0.2 0.2
UnemPloyment rAte % 4.4 4.4 4.5 6.8
inflAtion rAte AnnUAl % 2.7 2.3 3.4 0.5
AverAGe reAl WAGeS AnnUAl % 1.2 1.4 0.4 0.7
GDP Per heAD ($ At PPP) 76,870 84,770 85,360 81,080
lenDinG intereSt rAte 4.0 4.8 4.9 1.6
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Luxembourg City 77,400
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE �0
luxEMbouRg
Luxembourg
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Luxembourg
Political Structure
the Grand duchy of Luxembourg is a constitutional
hereditary monarchy with a parliamentary system
of government. notional executive power authority
lies with the Grand duke but actual executive
authority lies with the prime Minister and the
cabinet in parliament. the unicameral legislative
assembly is called the Chamber of deputies
(Chambre des députés).
Legal Structure
Luxembourg’s legal structure is based on civil law
system and consists of judicial courts and tribunals.
these include three lower tribunals, 2 district courts
and supreme Court of justice to deal with appeals
and cassation.
Hours of Business
the main business hours are Monday to Friday
08:00am–12.00pm, 13.00–17:00pm.
Visas
Luxembourg is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months.
Transport
Luxembourg airport (www.lux-airport.lu) is the main
airport for Luxembourg and located about 6
kilometres to the north east of the city centre. it is
linked via bus and taxi.
Luxembourg City is linked by rail to most major
european countries, with short connection to
Brussels and then to eurostar for international
service. société nationale des Chemins de Fer
Luxembourgeois or CFr (http://www.cfl.lu/) is the
national railway operator of Luxembourg.
International Dialling Code
the country code is + 352
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hour
Invest in Bureau
Further country information can be obtained from
Luxembourg Board of economic development:
www.bed.public.lu
bnp pARibAS REAl EStAtE �1
luxEMbouRg
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Luxembourg
Typical Lease Terms
Legislation: the law that governs
leases in Luxembourg is the Act of
14 February 1955 and subsequent
amendments from 1987 and
1992.
Lease Length: the standard term
for regular occupation of leased
premises is 3, 6 or 9 years.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Cost of Living index
published by the local statistic
governmental body “stAteC” at
the anniversary date of the lease
contract. the indexation of rents
is never negative so the rental
price will not decrease even if
there is a deflation.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
clients such as company statutes
and latest balance sheet.
Landlords usually accept a bank
guarantee instead of a deposit
equivalent to either 3 or 6 months
of rent, depending on the quality
of the tenant.
Rights of Renewal: on lease
expiry the tenant has no security
of tenure. the lease either
automatically expires and
renewals must be arranged
between the parties, or the lease
stipulates that, in absence of
reaction by the parties, the lease
is automatically renewed for
successive periods of one or three
years at the same conditions.
Break Options and Terminations:
Many leases contain break
options, usually after 3 or 6 years
on longer leases, although this is
only market convention. these
options may be for either or both
parties and should generally be
exercised by registered mail at
least between six to twelve
months prior to the lease expiry
date.
Tenant and Landlord Obligations:
the landlord is responsible for
major repairs, the details of which
are foreseen by the legislation.
Building maintenance and
insurance is paid by the landlord
and re-invoiced to the tenant.
tenants are responsible for
contents insurance and
maintenance of their premises.
(Almost triple net contract.)
Subletting: the tenant is not
permitted to sublet the premises
without written consent from the
landlord unless sublet to a parent
company of the tenant. Consent
should not to be unreasonably
withheld unless it has been
otherwise specified in the lease.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month plus
VAt when applicable (15%) and
are paid quarterly or monthly in
advance.
service Charges: Building service
charges are quoted in euros per
square metre per month and are
paid monthly or quarterly in
advance, based on a provisional
amount, which is adjusted once
the actual cost is known at the
end of the year.
Local Property Tax: this tax is
assessed on a percentage of the
notional value of the building and
paid by the landlord on an annual
basis. this cost is often passed on
to the tenant via the service
charges or via separate invoice.
luxEMbouRg
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
Luxembourg
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are negotiable
with the typical rate being
between 1 month rent to 15%
of the first year’s net rent.
Fees are paid by the landlord
or by the tenant depending on
whom the agent represents.
Freehold – Fees are usually
paid by the seller and
negotiated on a case-by-case
basis but is typically between
1–3% depending on the sale
price.
subletting – Fees are to be
negotiated but are usually the
same as the leasing fees
above or based on a
percentage of the savings
made through the early
surrender of the lease.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property, the purchaser will be
responsible for paying a transfer
tax of 7.5–10.5% depending on the
city the object is located. this
may be recovered if the property
is sold again within 6 months.
•
•
•
Value Added Tax: VAt in
Luxembourg is currently at 15%
and is payable on all rent
payments (when applicable) as
well as professional fees and
letting fees.
General Market Practices
Basis of Measurement: Gross
external Area (GeA) is the area of
a building measured externally at
each floor level.
Gross Area (GA) is the area of a
building measured from the axis
of the opposite wall (if no windows
in wall) for each floor level.
Fit Out/Reinstatement/
Dilapidations: office buildings
are usually offered with carpet,
suspended ceilings, lighting, and
air conditioning. partitioning and
upgrading of the office space is at
the cost of the tenant. All works,
installations and additions, which
the tenant may undertake on the
premises during the lease, shall,
at the end of the lease or at the
end of renewal, belong to the
landlord, unless the latter should
demand the return of the
premises to their original state, at
the tenant’s cost.
Use of Space: space in
Luxembourg is most commonly
occupied as cellular offices or as a
mixed plan of offices and open
space for team areas.
Holidays
there are no times of the year in
which the speed of transactions
are reduced due to holidays. in
the period between Christmas
and new Year some offices may
be closed but generally firms will
remain open all year round.
Letting activity is usually dormant
during the month of August
(official construction work
holiday).
luxEMbouRg
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Luxembourg
Country Statistics
population (thousands) 16,346
surface area (km²) 41,000
density (per km²) 401
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 591 611 624 596
GDP AnnUAl % 3.4 3.5 2.1 -4.5
net Direct foreiGn inveStment (US$ millionS) -39,277 86,079 9,906 3,201
lAboUr force (millionS) 7.5 7.6 7.7 7.6
UnemPloyment rAte % 5.5 4.5 4.0 5.0
inflAtion rAte AnnUAl % 1.2 1.6 2.5 0.9
AverAGe reAl WAGeS AnnUAl % 0.9 0.4 0.9 0.4
GDP Per heAD ($ At PPP) 37,240 39,220 40,800 39,030
lenDinG intereSt rAte 3.5 4.6 4.6 2.4
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Amsterdam 729,171
rotterdam 592,669
the Hague 440,919
utrecht 233,193
eindhoven 200,803
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
nEtHERlAndSAmsterdam
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
Political Structure
the netherlands is a constitutional parliamentary
monarchy. the legislature of the netherlands states
General (staten Generaal) is bicameral and consists
of two chambers. the First Chamber’s (eerste Kamer)
function is to review legislation enacted by the more
powerful second Chamber (tweede Kamer).
Legal Structure
dutch legal structure is based on civil law system
with strong influences from French civil code. Civil
and criminal justice is organised around 61 sub-
district courts, 19 district courts, five Courts of
Appeal, and the supreme Court of the netherlands
as ultimate arbiter.
Hours of Business
the main business hours are Monday to Friday
08.30am – 17:00pm.
Visas
the netherlands is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months.
Transport
the main international airport is schiphol
Amsterdam (www.schiphol.nl) that is located
15 kilometres south west of Amsterdam. there are
other airports at rotterdam and eindhoven.
the netherlands has extensive network of buses,
trams and underground trains in the main cities plus
a railway system that connects the whole country.
Amsterdam itself is served by eight stations of the
nederlandse spoorwegen (dutch railways) and
serves as an international train station for journeys
to Belgium, France, Germany and switzerland.
travel details for rail journeys can be obtained from
dutch railways (www.ns.nl). Amsterdam’s internal
Metro system is run by Gemeentelijk Vervoerbedrijf
(GVB), a municipal transport company owned by the
city authorities (www.gvb.nl/english).
International Dialling Code
the country code is + 31
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hour
Invest in Bureau
Further country information can be obtained from
the netherlands Foreign investment Agency:
www.nfia.com
bnp pARibAS REAl EStAtE ��
nEtHERlAndS
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
Typical Lease Terms
Legislation: the legislation
applicable to commercial lease
contracts is Book 7 of the dutch
Civil Code. the law broadly
distinguishes the following three
categories:
residential (not being
discussed further)
Business premises – retail
(shops, canteens, showrooms,
restaurants)
Business premises – other
(offices, other less-location
bound activities)
dutch law provides for better
protection mechanisms for retail
tenants compared to offices.
rationale is that retail activities
are heavily dependent upon their
location. As the law is not 100%
precise on all matters, it is
strongly recommended to seek
professional advice in case of
potential disputes on cancellations
or extensions of contracts.
•
•
•
the dutch Council for real estate
(roZ) has issued standard lease
contracts for retail and office
leases which are commonly used
by all brokers. these standard
contracts can be extended with
additional articles and clauses
that are either tenant-friendly or
landlord-friendly. professional
advice on this matter could save
future costs, mainly on
termination of a contract, but also
when the landlord plans
redevelopment activities.
Lease Length: the usual term for
regular occupation of leased
premises is 5 years. in practice
every duration is possible varying
from an infinite lease that is
cancellable at short notice to a
20-year plus lease.
Rent Escalation/Rent Review:
usually the rent level is adjusted
annually, based on the Consumer
price index (Cpi), published by
the dutch Centre for statistics
(CBs). in practice, deviations
can be agreed upon, such as
fixed rents, capped indexation,
fixed indexation and variable
turnover rent.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details
and access to company
information. A bank guarantee of
(at least) 3 months gross rent
plus service charges are usually
required to complete the
transaction.
Rights of Renewal: the roZ
standard contracts are based
upon a first lease period, which is
to be specified. After expiration of
this lease period, the contract is
renewed automatically for the
same (or different) period, unless
the lease is terminated by the
tenant within a predefined term
before the first expiration date.
this termination period is usually
12 months, but could be different.
After the second renewal period,
the lease can be automatically
renewed or will have to be
renewed through negotiations.
dutch law is very flexible, and the
renewal right can also be
formulated as an option
exclusively for the tenant. older
contracts (before the roZ
standards became widespread)
can have different terms, rights
and obligations.
nEtHERlAndS
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
nEtHERlAndSBreak Options and Terminations:
the formulation of the term
“renewal”, “extension”, “break
option” and “termination” is vital
for the interpretation of whether
it is an exclusive right for the
tenant, or for both parties. this is
especially important if the rent
level is significantly above or
below market level, or if the
property can be redeveloped.
Because of this importance of
formulation, it is advisable to
have the dutch language contract
prevail in the case of any disputes
but this is not mandatory.
Tenant and Landlord Obligations:
the landlord usually is
responsible for external repairs
and the replacement of major
installations such as boilers,
HVAC and elevators. Building
maintenance (not replacements)
and insurance is paid by the
landlord and re-invoiced to the
tenant (service charges). tenants
are responsible for insurance and
maintenance of their assets. in
practice, deviations from the
above are possible, from a single-
net to a triple-net contract.
Subletting: usually the tenant is
not permitted to sublet the
premises without written consent
from the landlord. Consent should
not be unreasonably withheld or
unless it has been authorised in
the lease.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are usually quoted in
euros per square metre per
annum and are paid in advance on
a monthly, quarterly, or
(bi)annually basis.
Service charges: Building service
charges are quoted in euros per
square metre per annum and are
prepaid together with the rent in
advance, based on a provisional
amount. settlement occurs on an
annual basis.
Local property tax (“Onroerende
zaak belasting”): this tax is
assessed on a percentage of the
legal market value (“WoZ-value”)
of the property and paid by the
landlord on an annual basis.
Water and sewage tax is payable
by the landlord and the charges
differ per region or municipality.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are negotiable
and subject to the length of
the first lease period and the
height of the annual rent. the
typical rate being between 12
-20% of the first year’s net
rent for contracts between 5
and 10 years. Fees are paid by
the landlord or by the tenant
depending on whom the agent
represents.
transactions – Freehold fees
are usually paid by the seller
and negotiated on a case-by-
case basis but is typically
between 1.5 – 2% depending
on the sale price and the
service package.
subletting – Fees are to be
negotiated but are usually the
same as the leasing fees
above or based on a
percentage of the savings
made through the early
surrender of the lease.
•
•
•
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
Real Estate Transfer Tax
(“Overdrachtsbelasting”): For
the purchase of a property, the
purchaser will be responsible for
paying a transfer tax of 6%. this
may be recovered if the property
is sold again within 6 months.
Constructions to avoid transfer
tax are rare but not impossible,
though usually require a syndicate
of non-related investors.
Value Added Tax (“BTW”): VAt in
the netherlands amounts to 19%.
Leases are exempt from VAt, but
can be voluntarily subject to VAt if
the tenant is a VAt-paying
business. usually it is in the
interest of both the tenant and
landlord to apply for VAt-subject
lease, as the VAt on all property
related expenses and investments
is tax deductible for the landlord.
Banks and government
institutions are non-VAt
organisations and as such cannot
apply for VAt-lease. in those
cases, the lease generally is
increased with a certain
percentage for “VAt-damage”,
relating to historic investments,
maintenance expenses or both.
newly constructed properties
need to be leased subject to VAt
for a consecutive period of 10
years in order for the construction
VAt to be refundable. the tax will
be refunded upfront, but could be
repaid by the landlord if the
property is leased to non-VAt
tenants. this so called revision
period of 10 years revives fully
(for another 10 years) if the
property is sold before the end of
that period. tax consequences of
this revival can be immense, and
need to be checked for any
potential transaction where this
issue could be apparent.
provisions can be in place to
prevent revival from occurring.
General Market Practices
Basis of Measurement: in the
netherlands standard (“nen
2580”) is applicable to define the
floor area of a property.
BVo (“Bruto Vloer oppervlak”)
– Measures to the outside of
the finished surface of the
outer walls and includes
everything within the walls.
nVo (“netto Vloer oppervlak”)
– Measures to the inside
finished surface of the outer
walls core areas.
•
•
VVo (“Verhuurbaar Vloer
oppervlak”)- this is the most
commonly used area for
calculating rent. it measures
to the inside finished surface
of the outer walls but does
not include core areas (lifts,
vertical penetrations, common
landings), atria, or areas with
less than 1.5 m headroom.
Fit Out/Reinstatement/
Dilapidations: office buildings
are usually offered with carpet,
suspended ceilings, lighting,
heating and mechanical and
electrical installations.
partitioning and upgrading of the
office space usually is at the cost
of the tenant, but this can be
negotiated.
retail properties usually
are leased bare, without any
interior provisions.
•
nEtHERlAndS
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Netherlands
Country Statistics
population (thousands) 4,661
surface area (km²) 324,000
density (per km²) 14
Local currency norwegian Krone
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 225 232 237 232
GDP AnnUAl % 2.3 3.1 2.1 -2.0
net Direct foreiGn inveStment (US$ millionS) -14,552 -8,713 -11,555 -5,654
lAboUr force (millionS) 2.4 2.5 2.6 2.6
UnemPloyment rAte % 3.5 2.5 2.6 4.0
inflAtion rAte AnnUAl % 2.3 0.8 3.8 2.0
AverAGe reAl WAGeS AnnUAl % 5.3 4.9 2.3 2.0
GDP Per heAD ($ At PPP) 50,105 54,614 56,255 54,940
lenDinG intereSt rAte 4.2 6.1 7.4 4.6
exchAnGe rAte to US$ 6.4133 5.8617 5.6400 6.5085
Major Cities
City Core population
oslo 505,167
Bergen 228,386
trondheim 148,023
stavanger 108,418
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
noRwAY
oslo
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Norway
Political Structure
norway is a constitutional parliamentary monarchy.
the hereditary monarch is head of state but power is
exercised through the norwegian parliament (the
storting) that is unicameral. Although unicameral, it
is divided into two chambers, the odelsting and the
Lagting. the Lagting’s acts as an upper chamber to
the odelsting lower chamber, where legislation
originates, but in practice the passage of legislation
is a combined act.
Legal Structure
norway’s legal structure is a mixture of civil law
system and common law traditions. the hierocracy
of norway’s regular courts starts with the district
courts at the bottom, city and county courts, the
appellate courts, labour courts (for industrial
disputes) and the conciliation councils (for mainly
civil disputes). the highest court is the supreme
Court.
Hours of Business
the main business hours are Monday to Friday
08:00am – 16:00pm.
Visas
norway is not a member of the eu but is a member
of the schengen area agreement and the european
economic Area. Holders of an eeA (eu Member
states, iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months that is applied for the
local police station in norway.
Transport
Aviation is an important means of transport
within norway given its shape and latitude so there
are around 98 regional airports, 50 of which are
public owned by the state operator Avinor. the main
international airport is oslo Airport Gardermoen
(www.osl.no/en/osl) that is located around 50
kilometres northeast of the city centre. Access to
the airport is by taxi, bus or by express train
(www.flytoget.no/eng).
the norwegian national rail Administration
(www.jernbaneverket.no) operates the network of
trains that connect the principle cities of norway.
timetables for passenger travel can be obtained
from state owned passenger company norges
statsbaner (nsB) (www.nsb.no/home). oslo itself
operates a network of tramways (www1.trafikanten.
no/) and a rapid transit system called the oslo
t-bane (www.tbane.no).
International Dialling Code
the country code is + 47
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hour
Invest in Bureau
Further country information can be obtained from
the norwegian trade portal and innovation norway:
www.nortrade.com
www.innovasjonnorge.no
bnp pARibAS REAl EStAtE �0
noRwAY
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Norway
noRwAYTypical Lease Terms
Legislation: Commercial
contracts are governed by the
real property Code, which mainly
aims to protect the rights of
residential tenants but it also
stipulates regulations for
commercial properties.
Lease Length: typically the term
of a lease is not specified and is
expected to be ongoing. Generally
the tenant and the landlord will
agree to an interminable period
whereby the lease will be
guaranteed. However, specified
terms of 5 and 10 years are
increasingly common.
Rent Escalation/Rent Review:
rents are indexed annually to the
Consumer price index.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details
or access to company information.
A deposit of 3 – 6 months gross
rent is typically necessary to
complete the lease.
Rights of Renewal: the tenant
has no right by law to renew the
lease but it is common to
negotiate an option to renew in
the lease.
Break Options and Terminations:
in leases where the term is
specified, the lease automatically
expires and requires
renegotiation. in situations where
the lease term is not specified,
the lease term is considered to be
ongoing until either the tenant or
landlord gives notice of
termination as set out in the lease
terms. the landlord is not
allowed to terminate an ongoing
lease unless the tenant does not
meet its covenants. if the
landlord terminates the lease
prematurely he is liable for
compensation to the tenant.
Tenant and Landlord Obligations:
Landlords are responsible for
external repairs and building
maintenance including technical
installations, surface of floors,
walls, and ceilings. the tenant is
responsible for maintenance and
insurance of the internal
premises.
Subletting: Generally, subletting
is allowed with the written
consent of the landlord and it
should not be unreasonably
withheld or delayed.
Legal Environment Concerning
Brokerage Law
there is no requirement in
norway for agents to be licensed
or authorized in order to negotiate
real estate transactions.
Historically agents have
represented landlords only, but
recently corporate occupiers have
begun to utilize consultants to
protect their interests in
negotiations. it is always
advisable when dealing with
agents in norway to enter into a
written contract defining the
duties to be carried out by the
agent, including fees, deadlines
and scope of work.
“open bidding” sales are common
when a property is being sold. As
the name implies, all offers are
openly known by all interested
parties. this process is very
similar to an open auction. other
less common methods used to
sell property is a “closed bidding”
process and options for select
buyers to place offers.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in noK
norwegian Kroner on per square
metre per month basis and are
paid in advance on a quarterly
basis.
bnp pARibAS REAl EStAtE �1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Norway
Service Charge: sometimes this is
quoted within the rental figure.
this includes heating, water,
electricity, cleaning of common
areas and snow removal based
upon a provisional amount, which
is adjusted once the actual cost is
known at the end of the year.
Local Property Tax: the local
property tax depends on the
geographical location of the
building. it is normally paid by the
landlord, but in some cases the
tenant covers this cost.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually
equal to 15% of the first year’s
net annual rent. typically
each party pays their
respective contracted agent.
Freehold – Fees are usually
paid by the seller and are
negotiated depending on the
size of the property. typically
fees will be between 0.5% –
2.5%.
sublease – same as leasing
fees above, however, in some
cases sublease fees may be
increased.
•
•
•
Property Transfer Tax (Stamp
Duty): during the purchase of a
property the purchaser will be
responsible for paying a stamp
duty equal to 2.5% of the purchase
price.
Value Added Tax: the VAt in
norway is 25 percent. Most
industries have a VAt duty; the
exceptions are the bank/finance
and the public sector. Landlords
should make sure that they are
registered for leasing and that the
tenants are VAt registered.
Other Taxes/Costs: A fixed price
of nK 1,850 is required to be paid
on all mortgages regardless of
the size of the mortgage.
General Market Practices
Basis of Measurement: in norway
office premises are measured
from the exterior of the building
to the midpoint of subdividing
walls. the area used to calculate
rent will also typically include a
share of common areas such as
entrances, staircases, elevators,
and corridors.
Fit Out/Reinstatement/
Dilapidations: unless otherwise
agreed, when a tenant moves
from premises at the expiry of a
lease they are obligated to return
the premises to their original
condition.
Use of Space: in buildings
refurbished or constructed in the
‘70’s – ‘80’s premises utilize
cellular offices. recent demand
however has been for open
concept office premises or
premises containing demountable
partitioning systems.
Holidays
summer holidays, which are taken
from July to the second week of
August, create a period of slowed
activity and few transactions are
completed in this time. other
significant holiday periods where
transactions may become slowed
are over Christmas (2 weeks) and
during easter (8 days).
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay of
newsec Advice AB for their
assistance in the preparation of
this country review.
noRwAY
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Norway
Country Statistics
population (thousands) 38,312
surface area (km²) 313,000
density (per km²) 122
Local currency Zloty
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 550 587 615 624
GDP AnnUAl % 6.2 6.7 5.0 -0.8
net Direct foreiGn inveStment (US$ millionS) 10,727 17,976 13,700 10,500
lAboUr force (millionS) 16.9 16.9 17.0 17.0
UnemPloyment rAte % 16.9 12.7 9.8 12.3
inflAtion rAte AnnUAl % 1.0 2.5 4.2 2.5
AverAGe reAl WAGeS AnnUAl % 3.8 6.0 5.1 0.9
GDP Per heAD ($ At PPP) 14,879 16,312 17,500 17,460
lenDinG intereSt rAte 7.3 8.1 9.1 9.8
exchAnGe rAte to US$ 3.1032 2.7680 2.4092 3.3500
Major Cities
City Core population
Warsaw 1,615,382
Łódź 803,375
Kraków 739,954
Wroclaw 637,232
poznań 577,523
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
polAndWarsaw
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Poland
Political Structure
poland is a parliamentary democracy with a
president as head of state who is directly elected to
serve a 5 year term. the polish parliament is
bicameral and composed of two chambers, the
higher chamber called the senate and the lower
chamber called the sejm where legislation
originates. poland also has influential regional
governments (sejmik) that administer the country’s
16 regions (Voivodships).
Legal Structure
poland’s legal structure is based on a mixture of civil
law (influenced by French Civil Law) and some
legacy Communist legal theory that is being altered.
the polish court system is a four tiered structure
that are based on regional (lowest level of the
judiciary), provincial and appellate divisions plus a
supreme Court
Hours of Business
the main business hours are Monday to Friday
08:00am – 16:00pm.
Visas
poland is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months.
Transport
the principle international airport is Warsaw’s
Frederic Chopin Airport (www.lotnisko-chopina.pl)
that is located 10 kilometres south west of Warsaw.
Connections to the city are via bus service and taxi.
Warsaw has an extensive bus and tram service that
is run by the Warsaw transport Authority (www.ztm.
waw.pl). there are some suburban lines and rail
lines that connect Warsaw to other polish cities such
as Krakow and Gdansk. Warsaw’s rail strength is as
international rail terminus that connect routes
between western and eastern europe. Many rail
services european destinations to poland via the
railways run by the polish state railway (pKp)
(http://rozklad-pkp.pl).
International Dialling Code
the country code is + 48
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the invest in poland bureau:
www.paiz.gov.pl/index
bnp pARibAS REAl EStAtE ��
polAnd
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Poland
polAndTypical Lease Terms
Legislation: the Civil Code
governs leases in poland.
Lease Length: typical leases used
in poland are 3 years (20% of all
contracts), 5 years (70% of all
contracts) and 10 years (5% of all
contracts)
Rent Escalation/Rent Review:
rents are usually indexed
annually based on the european
union Consumer price index (Cpi)
if the rent is stated in euros or the
inflation index published by
Central statistical office of
poland if the rent is in polish
Zloty. sometimes the rent is
quoted in us dollars and is
indexed by us Cpi but rents in this
currency are not common
anymore.
Guarantee and Security Deposit:
Cash deposit or a bank guarantee
of 2 to 3 months (sometimes 6
months bank guarantee) of the
gross rent of the lease.
Rights of Renewal: Leases will
terminate at the date of expiry
and usually must be renegotiated.
if the option to extend was
previously agreed, then the
existing lease terms and rent will
continue for the new lease.
Break Options and Terminations:
options are negotiable but a
period of at least 3 years length is
generally asked for. tenants
should be aware of notice periods
as options will expire and become
null and void if notice is not
delivered on time. in most cases
the penalty for early lease
termination is subject to
negotiations and depends on
current market conditions.
Tenant and Landlord Obligations:
usually the landlord is responsible
for building maintenance,
insurance and technical
installations. the tenant is
responsible for maintenance and
insurance within the premises.
Subletting: it is stated in the Civil
Code that the tenant may sublet
part or the whole premise to a
third party if the lease agreement
allows and the landlord agrees in
writing. if the subletting is agreed,
the tenant and the third party are
both responsible to the landlord
for using the premises as detailed
in the lease agreement. the
sublet will terminate at the date
of expiry of the lease agreement
between the tenant and the
landlord.
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Poland
Legal Environment Concerning
Brokerage Law
it is a legal requirement to have a
license in order to trade as a real
estate broker in poland.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros,
polish Zloty or us dollars per
square metre per month and are
paid monthly in advance in local
currency.
Service Charge: service charges
are quoted in euros, polish Zloty
or us dollars per month per
square metre in advance in local
currency. the parties usually
settle accounts every quarter or
half of a year.
Local Property Tax: paid directly
by the landlord and included in
the service charges paid by
tenant.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are negotiable.
the usual rate paid by the
landlord is between 1 to 3
months rent. the fees paid by
the tenant are usually
between 0.5 to 1 month rent.
Freehold – Fees are
negotiable and are typically 1
to 2.9% of the purchase price.
subletting – same as leasing.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property, the purchaser will be
responsible for paying a property
transfer tax of 2%, which is based
on the purchase price of the
property. in case of acquiring
shares of the company which
owns an estate, the buyer is
obliged to pay tax of 0.5% of the
value of the conveyance of shares.
Value Added Tax: the VAt rate in
poland is 22% and payable on all
forms of transactions including
rent, building service charges,
agents fees and notary costs. the
exception is the 7% VAt for
transactions real estate classed
as residential investments.
•
•
•
General Market Practices
Basis of Measurement: net
Lettable Area or Building owner’s
and Manager’s Association
standard (BoMA). this is the most
commonly used area calculation
and is used for calculating the rent.
BoMA includes main usable space,
ancillary space such as toilets,
kitchens, separating walls, and
circulation space. Areas used for
technical use, structural walls and
elevators are excluded. A “gross-
up” factor of 5 to 12% may be
applied to the net Lettable Area,
particularly if the building is new.
tegova – teGoVA is a european
non profit making association
composed of 39 valuers’
associations from 24 countries
representing about 120,000
valuers in europe. it has published
european Valuation standards, at
present under the 5th edition,
referred to as eVs 2003. it
includes material on valuations
for securitisation purposes, the
effect of market shock, corporate
governance and much expanded
sections of the valuation of
agricultural properties.
polAnd
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Poland
the valuation report includes: the
instructions, time period,
identification, basis of valuation,
compliance statement, condition
of the property, environmental
issues, risk assessment, valuation
schedules, the treatment of
process plant and machinery, the
currency or currencies in which
the valuations are to be reported,
publication and confidentiality
clauses, third party liability,
taxation, financial liabilities,
model clauses for the valuation
certificate.
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
carpeting and partitioning as
standard and occasionally raised
floors with costs are borne by the
landlord. Finishing of the
premises is limited by a budget of
150 to 400 euros per square
metre if the finishing is from
“shell & core”. Amounts exceeding
the budget are borne by the
tenant.
When letting second generation
space, the landlord will generally
assume the costs of installing
partitioning according to a space
plan provided by the tenant.
When vacating premises, the
tenant is responsible for
reinstating the space to the
condition it was in when they first
occupied the space. tenant
improvements that were
undertaken during occupancy
cannot be sold to the landlord
unless otherwise stipulated in the
lease. if the landlord wishes they
may ask for the premises to
remain in their existing condition.
Use of Space: Both open space
plan and cellular offices are used
in poland.
Holidays
the main holiday periods are the
first week of May, mid July to the
end of August, and the second half
of december.
polAnd
bnp pARibAS REAl EStAtE ��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Poland
Country Statistics
population (thousands) 10,586
surface area (km²) 92,000
density (per km²) 115
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 214 218 218 209
GDP AnnUAl % 1.4 1.9 -0.0 -4.1
net Direct foreiGn inveStment (US$ millionS) 4,340 -671 1,392 1,113
lAboUr force (millionS) 5.6 5.6 5.6 5.6
UnemPloyment rAte % 7.6 8.0 7.6 9.6
inflAtion rAte AnnUAl % 3.1 2.4 2.6 -0.7
AverAGe reAl WAGeS AnnUAl % -0.2 3.4 0.7 0.0
GDP Per heAD ($ At PPP) 20,840 21,850 22,270 21,410
lenDinG intereSt rAte 5.2 6.1 6.8 5.1
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Lisbon 563,210
porto 273,060
Amadora 188,450
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE ��
poRtugAl
Lisbon
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Portugal
Political Structure
portugal is parliamentary republic headed by a
president who is directly elected to serve 5 years.
the parliament is called the Assembly of the
republic (Assembleia da republica) and is
unicameral. Mainland portugal is organised around
municipalities and districts that have limited powers
but the islands of Madeira and Azores operate as
autonomous regions and have their own parliament
and administration.
Legal Structure
the portuguese legal system is based on civil law
with strong influence from French and German civil
law. the portuguese court system begins with courts
of first and second instance (to deal with civil and
criminal matters) and a supreme Court of Justice for
final appeals.
Hours of Business
the main business hours are Monday to Friday
09:00am – 13.00pm, 15.00pm – 19.00pm.
Visas
portugal is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months from a portuguese
consulate or embassy in the country of origin.
Transport
the three main international airports in portugal are
Lisbon portela Airport (www.ana.pt/) that is located
7 kilometres to the north of the city centre;
Francisco sá Carneiro Airport, oporto that is located
11 kilometres north west of the city and Faro Airport
4 kilometres west of the city. Funchal in Madeira and
the Azores are also connected via air.
Lisbon has a well developed bus and tram system
plus a metro system Metro de Lisboa for
transportation around the city. the Lisbon metro
consists of four lines that radiate out to the north,
northeast and northwest of the city. the metro is
run by Metropolitano de Lisboa (www.metrolisboa.
pt). General transport detail about Lisbon can be
obtained from transporlis (www.transporlis.sapo.
pt).oporto also has a bus, tram and 5 line metro
system that connects to the airport and is run by
Metro do porto (www.metrodoporto.pt)
the majority of the portuguese railway system is run
by the state operator Caminhos de Ferro portuguese
(Cp) (www.cp.pt) under the name Comboios de
portugal. the portuguese train system has express
links between Lisbon and oporto and to the Algarve
during the peak tourist season. Cp also operates a
regional train system that links other cities in
portugal. A regional train system operates
throughout the rest of the country linking up the
other major towns and there are international
connections to France and spain.
International Dialling Code
the country code is + 351
Coordinated universal time (utC)
eastern standard time + 5 hours
Invest in Bureau
Further country information can be obtained from
the portuguese Business development Agency:
www.investinportugal.pt
bnp pARibAS REAl EStAtE ��
poRtugAl
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
Portugal
Typical Lease Terms
Legislation: the “new law” that
governs leases is based on the
law n° 321-B/90 of 15 october
1990 and the “old law” that
covered older leases cannot be
utilized anymore.
Lease Length: the new regulation
does not specify a lease term per
se and considers leases to be
ongoing. there tends to be two
standard options of short term
with a minimum 6 months and
long term with a minimum of 5
years (3 years if signed through
investment funds).
Rent Escalation/Rent Review:
rent is adjusted annually based
on the official inflation index (the
state registered index published
in october).
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit of 2 months net rent must
be paid when the lease is signed
and a bank guarantee is required
(usual value of 6 months rent).
Right of Renewal: on lease expiry
the tenant has no security of
tenure. At expiry of the term both
parties can terminate the lease. if
neither party terminates the lease
it shall continue for a further
period of one year.
Break Options and Terminations:
under the “new law” the tenant
had the right to terminate the
lease subject to 90 days prior
written notice at any time. the
landlord did not have the right to
terminate the lease before the
end of the 5 year period. under
the “old law” the tenant was able
to terminate the lease with 6
months prior written notice but
the landlord could not terminate
the lease at any time unless the
tenant has breached the
covenants of the lease. the new
legal framework makes an
obligation for both tenant and
landlord to fulfil the contract
until its end without any
possibility to break before its end.
Tenant and Landlord Obligations:
tenant obligations are internal
repair, maintenance and
insurance while landlord
obligations are main structural
repairs. Maintenance and
insurance is paid by the landlord
and re-invoiced to the tenant.
Subletting: the tenant is not
permitted to sublet the premises
without written consent from the
landlord, not to be unreasonably
withheld, or unless otherwise
stated in the lease.
poRtugAl
bnp pARibAS REAl EStAtE 100
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Portugal
Legal Environment Concerning
Brokerage Law
each agent must be registered
and have a formal license from
AMi (association of property
developers). in accordance with
the law, an agent must have a
registered listing in order to be
able to offer a property to a
tenant. By virtue of this listing,
the landlord authorises the agent
to sell or let the property.
there is no standard listing
document, however, some of the
issues that need to be included in
each listing include a description
of the property, the job task, price
or rent, duration of the listing
(usually 6 months with 3 month
renewal periods) and agency fees.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in euros per
square metre per annum and are
paid quarterly in advance based
on a provisional amount, which is
then adjusted once the actual cost
is known at the end of the year.
Local Property Tax (Autarquica):
this tax is assessed on a
percentage (1.1-1.3%) of the
notional value of the building and
is paid by the landlord on an
annual basis.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
between 1 month net rent and
10% of the first year’s net
rent. the landlord typically
pays the agents fees.
Freehold – Fees are paid by
the seller and negotiated on a
case-by-case basis depending
on the purchase price. Fees
are typically between 3-5% of
the agreed purchase price.
subletting – same as leasing
fees.
Property Transfer Tax: For the
purchase of a property, the
purchaser will be responsible for
paying a property transfer tax
(“iMt”) of 6%, and the stamp tax
of 0.8%, both of which are based
on the purchase price of the
property.
•
•
•
Value Added Tax: the current VAt
rate in portugal is 20% and is
payable on all forms of
transactions including service
charges and agents fees, but is
not paid on the sale or purchase
of freeholds. it can be possible to
elect to not charge VAt on rent.
this will vary from property to
property and will depend on the
legal status of the landlord.
Other Taxes/Costs: For the
purchase of a property, the
purchaser will be responsible for
notary fees.
poRtugAl
bnp pARibAS REAl EStAtE 101
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Portugal
General Market Practices
Basis of Measurement: in
portugal there is no official basis
of measurement. the following
terms are typically used to define
floor areas:
Construida – Measures gross
area including the shell of the
building. the “construida” is
equal to the sum of the areas
of each floor of a building,
taking into account the bare
exterior of the walls and the
finished floors. it encompasses
everything including, all
basements and attic spaces,
balconies, loggias and
accessible roof verandas. this
is most common basis for
calculating rentable area in
leases.
util – Measures net area
excluding the shell of the
building. the “util” is equal to
the sum of the office areas
excluding parking areas,
basements, attic spaces not
fitted out for residential or
professional activities, and
corridors.
•
•
Fit Out/Reinstatement/
Dilapidations: premises are
typically provided to tenants with
raised floors, mechanical and
electrical, and lighting but
tenants are responsible to
perform their own fit out. upon
lease expiry, the tenant is
obligated to return the premises
to the original condition it was in
upon initial occupancy. in
practice, if the improvements are
of good quality and are in good
condition, the landlord will
request they are left in the
premises.
Use of Space: office premises in
portugal tend to be utilised as
cellular offices.
Holidays
there are certain times of the
year in which the speed of
transactions are reduced due to
holidays (Christmas, easter and
summer holidays). in portugal, the
period from July through until the
end of August is a peak holiday
period. Many of the smaller
companies close down in August
whilst larger firms operate with
only a skeleton staff.
Acknowledgement
We would like to thank Jean Freval
of Fenalu for assistance in the
preparation of this country
review.
poRtugAl
bnp pARibAS REAl EStAtE 10�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Portugal
Country Statistics
population (thousands) 21,587
surface area (km²) 238,391
density (per km²) 90.6
Local currency new Lei
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 219 232 248 238
GDP AnnUAl % 7.9 6.0 7.1 -4.0
net Direct foreiGn inveStment (US$ millionS) 10,971 9,391 12,900 6,920
lAboUr force (millionS) 9.3 9.3 9.3 9.3
UnemPloyment rAte % 5.2 4.1 4.4 7.6
inflAtion rAte AnnUAl % 6.6 4.8 7.8 5.2
AverAGe reAl WAGeS AnnUAl % 11.6 16.9 14.6 0.8
GDP Per heAD ($ At PPP) 10,481 11,430 12,520 12,100
lenDinG intereSt rAte 14.0 13.3 15.3 17.6
exchAnGe rAte to US$ 2.8090 2.4383 2.5189 3.1300
Major Cities
City Core population
Bucharest 2,016,131
iasi 348,070
Constanta 342,264
Cluj-napoca 332,498
Galati 330,276
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 10�
RoMAniA
Bucharest
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
Political Structure
romania is a parliamentary republic with a president
as head of state who is directly elected for a five
year term. the romanian parliament is bicameral
and consists of the 332 seat Chamber of deputies
(Camera deputatilor) and the 137 seat senate
(senat).
Legal Structure
the romanian legal system is based on civil law
with influences from the French civil code. the court
system is hierarchical consist of local and around 40
county courts, 15 courts of appeal and ultimately
with the supreme Court, the Court of Cassation and
Justice.
Hours of Business
the main business hours are Monday to Friday
08:00am – 17:30pm.
Visas
romania is not a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months from the romanian
Authority for Aliens.
Transport
the main international airport is Henri Coandă
international Airport (www.otp-airport.ro) (formerly
known as otopeni) located 12 kilometres to the
north of Bucharest. the other major airport is traian
Vuia international Airport (www.aerotim.ro) located
in timişoara in the west of the country.
Bucharest is the only city with a well developed
metro and suburban system. the Metro system is
run by Metronex (www.metrorex.ro) with other
public transport such as buses and trams run by the
semi-public regia Autonomă de transport Bucureşti
(rAtB) (www.ratb.ro) corporation.
romania has an extensive rail network connecting
across the country and internationally with train
service to Budapest, Vienna and Munich. the
principle rail operator is the state owned Căile
Ferate române (www.cfr.ro/) who also provide
travel details (www.mersultrenurilorcfr.ro).
International Dialling Code
the country code is + 40
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the romanian Agency for Foreign investment:
www.arisinvest.ro
bnp pARibAS REAl EStAtE 10�
RoMAniA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
Typical Lease Terms
Legislation: the law that governs
lease contracts is based on the
romanian Civil Code. registration
of a lease contract to the
authorities of the Ministry of
Finance is mandatory. Leases
longer than 3 years should be
registered with the Land registry.
it is not compulsory to use
standard contracts; any form of
contract is acceptable as long as
it corresponds to romanian
legislation.
Lease Length: the average lease
is 5 years, although 7-10 year
leases are more common for
larger occupiers.
Rent Escalation/Rent Review:
typically, rents are indexed
annually (upwards only) with the
european union Consumer price
index published by eurostAt,
both for Class A and B office
buildings. Alternatively the
parties can agree to increase the
rent by a predetermined amount.
the rent is reviewed if stipulated
in the initial lease.
Guarantee and Security Deposit:
Landlords typically require a
guarantee equivalent to 3 month
rent (cash deposit or bank
guarantee letter) from
prospective tenants upon signing
of the lease contracts.
Rights of Renewal: Most
contracts include renewal
options. unless an option to
renew was previously agreed,
leases will terminate at the date
of expiry. if an option to renew
was agreed, then the current
lease terms and rent will be
renegotiated.
Break Options and Terminations:
Break options are uncommon
practices. tenants who
prematurely exit out a lease are
subject to heavy penalties.
the penalty for early lease
termination is subject to
negotiation and depends on
current market conditions.
exceptional lease agreements
allow the tenant to terminate the
lease without penalties under
very specific circumstances.
the landlord is not allowed to
terminate an ongoing lease unless
the tenant fails to meet its
covenants. if the landlord
terminates the lease prematurely
he is liable for compensation to
the tenant.
Tenant and Landlord Obligations:
normally the landlord is
responsible for building
maintenance, structural and
common area repairs, electro-
technical installation repairs
inside the lease premises, as well
as other interior repairs not
caused by the tenant. usually the
maintenance expenses and
additional services, such as
security, central reception are
paid by the landlord and then re-
invoiced to the tenant or included
in service charges. the building
owner is also responsible for the
payment of insurance and local
property taxes which are passed
on to tenants through service
charges. tenant obligations are
internal repairs and general
maintenance within their
premises. the tenant pays for
third-party insurance.
Subletting: the tenant is
permitted to sublet the premises
without change of use/destination
with the prior written consent
from the landlord who must not
unreasonably withhold
permission. the landlord is not
obliged to accept the subtenant
but in practice if the subtenant’s
covenant is strong, then the
sublet will generally be accepted.
RoMAniA
bnp pARibAS REAl EStAtE 10�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
Legal Environment Concerning
Brokerage Law
Agents do not need to have a
license in order to practice in
romania. no specific
qualifications are required to be a
property agent. Agents may act as
a consultant representative of one
party (owner, tenant/purchaser)
or alternatively act as an
intermediary. previously signed
contracts are required for the
agent to charge a fee for the
services provided. it is always
advisable when dealing with
agents in romania to enter into a
written contract defining the
duties to be carried out by the
agent, including fees, deadlines,
and scope of work.
each party typically pays their
respective agent. on occasion the
landlords’ agent may sometimes
earn a fee of half a month’s net
rent from the tenant. the tenant’s
agent only earns fees directly
from the tenant. in general, if a
property is introduced to a
prospective tenant/purchaser and
viewed with the introducing
agent, then the tenant/purchaser
is legally obligated to pay the
agent a fee if an agreement on
that property is signed.
in case of exclusive
representation instructions
agents’ fees are paid exclusively
by the represented client.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid quarterly or monthly in
advance. rents are paid in local
currency romanian new Lei
(ron).
Service Charge: Building service
charges are quoted in euros per
square metre per month and are
paid together with the rent
monthly/quarterly in advance.
service charges are based on a
provisional amount that is
adjusted once the actual cost is
known at the end of the year. All
service charges must be agreed
upon separately in the lease
agreement. these usually cover
maintenance of common areas
including: electromechanical
systems, cleaning, air
conditioning, gardening, building
utilities, 24 hour security and
daytime concierge. the landlord
typically invoices building
insurance and local property
taxes through the service
charges.
Local Property Tax: paid by the
landlord and invoiced back to the
tenant through the service
charge. this tax is assessed on a
percentage of the notional value
of the building and paid by the
landlord on an annual basis.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are negotiable
with the usual rate ranging
between 10-12% of the first
year’s net rent. Fees are paid
by the landlord or by the
tenant depending on whom
the agent represents. For
larger or higher value
instructions this percentage
can be reduced as
appropriate.
Freehold – Fees are usually
paid by the seller and are
negotiated on a case-by-case
basis depending on the
purchase price. Fees are
usually between 1–3% of the
agreed purchase price.
subletting – same as leasing
Property Transfer Tax (Stamp
Duty): in case of asset deals
performed by individuals, the
seller pays a tax of 1-3% applied
to the value of the transaction,
depending on the value and the
ownership period. the highest
percentage of taxes is applied for
properties transacted in less than
3 years from acquisition date.
•
•
•
RoMAniA
bnp pARibAS REAl EStAtE 10�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
in case of asset deals performed
by companies, the income
obtained by the seller after the
dispose of the property becomes
part of the total income of the
company quarterly recorded. if
the company obtains a profit after
the deduction of the total
expenses, this will be subject to a
16% tax.
in both cases the parties have to
pay taxes to the national Agency
for Cadastre and Land
registration and the notary fees.
note: please note that the above
mentioned fiscal obligations are
based on the provisions of the
currently enforced Fiscal Code (as
at January 2009) which is
expected to be amended in the
near future.
Value Added Tax: VAt (19%) is
payable on rent and service
charges and is recoverable.
General Market Practices
Basis of Measurement: Landlords
use gross internal area (GiA) in
square meters as the most
common method of area
determination and for calculating
the rent. GiA includes main office
usable space, ancillary space such
as toilets, kitchens, separating
walls and circulation space
exclusively located within the
leased premises.
on multi tenant buildings the
space occupied by the entrance
lobby, halls, restrooms and any
other common area are allocated
to all tenants pro-rata along with
the exclusive area occupied by
each tenant. Gross internal area
excludes staircases, elevator
shafts and non-load bearing inner
walls. outdoor terraces are not
included in the measurement of
the premises for the calculation of
rent for offices being quoted
separately (generally half of the
rent quoted for the usable area).
Fit Out/Reinstatement/
Dilapidations: office buildings
usually include: carpet, suspended
ceilings, raised floors, lighting and
wiring, heating, mechanical and
electrical servicing. raised floors
and centralized cooling systems
are generally standard in new
buildings. in a tenants’ market,
the landlord may assume the cost
of partitioning or a part of the
cost. in a landlords’ market, these
costs are usually borne by the
tenant.
All works, decorations,
installation, additions, and
furnishings that the tenant may
undertake on the premises during
the lease shall, at the end of the
lease or at the end of renewal,
belong to the landlord, unless the
latter should demand the return
of the premises to their original
state. Fit-out costs for tenants’
specific requirements are not
provided by landlords. When
letting second generation space,
the landlord will generally
assume the costs of installing
partitioning according to a space
plan provided by the tenant.
Use of Space: Cellular offices,
open plan floors and mixed plan
offices are all common in
romania. the most popular form
of premises is open space floors
for cost reasons and flexibility in
partitioning and use.
Holidays
summer holidays (mid-June-last
week of August) create a period of
slow activity and few transactions
are completed in this time. other
significant holiday periods when
transactions may be affected are
between mid december to early
January and during easter. there
are also a number of public
holidays stipulated in the Labour
Code: the 1st of May, the 1st of
december and two other religious
holydays.
RoMAniA
bnp pARibAS REAl EStAtE 10�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Romania
Country Statistics
population (thousands) 142,487
surface area (km²) 17,075,400
density (per km²) 8.3
Local currency rubles
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 1,828 1,976 2,087 1,982
GDP AnnUAl % 7.7 8.1 5.6 -5.0
net Direct foreiGn inveStment (US$ millionS) 6,551 9,159 12,000 10,000
lAboUr force (millionS) 74.3 75.1 75.8 76.0
UnemPloyment rAte % 7.2 6.1 6.4 9.6
inflAtion rAte AnnUAl % 9.7 9.0 14.1 12.1
AverAGe reAl WAGeS AnnUAl % 14.4 16.2 10.3 -4.0
GDP Per heAD ($ At PPP) 13,235 14,716 15,940 15,270
lenDinG intereSt rAte 10.4 10.0 12.2 15.0
exchAnGe rAte to US$ 27.1910 25.5808 24.8529 32.8000
Major Cities
City Core population
Moscow 8,297,056
st petersburg 4,678,102
novosibirsk 1,400,328
nizhny novgorod 1,357,555
Yekaterinburg 1,267,393
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 10�
RuSSiA
Moscow
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Russia
Political Structure
russia is a federal republic that consists of 83
regions. the head of state is the president who is
directly elected to serve a four-year term (this
structure is currently being revised). the president
has considerable executive power including
appointing the prime minister. the Federal Assembly
(Federalnoye sobraniye) is bicameral. the upper
House is the Federation Council (sovet Federatsii)
and the lower house, the state duma
(Gosudarstvennaya duma), which is the main
legislative organisation.
Legal Structure
russia’s legal system is based on civil law. the
russian judiciary has three branches that are
headed by the supreme Court, supreme Court of
Arbitration and Constitutional Court. the lowest
level of court in general jurisdiction is the municipal
court that exists in each city or rural district and
handles the majority of civil and criminal cases.
Commercial cases are heard in the arbitration court
system under the supreme Court of Arbitration.
Hours of Business
the main business hours are Monday to Friday
09:00am – 18.00pm.
Visas
Visas are required to visit russia that can be
obtained from the consular section of the
appropriate russian foreign embassy representation.
russia is not a member of the schengen area
agreement.
Transport
the principle international airports are at Moscow,
st petersburg and ekaterinburg. Moscow has two
main airports for international travel: sheremetyevo
(www.sheremetyevo-airport.ru), located
29 kilometres to the northwest of Moscow
and domodedevo (www.domodedovo.ru), located
34 kilometres to south of the city. Both are connected
to the centre of Moscow by express railway.
st petersburg’s pulkovo Airport (www.pulkovo.ru)
is located 17 kilometres to south of the city.
Both Moscow and st petersburg have efficient metro
systems that are the best way to get around the city.
the state run Moscow metro (http://engl.mosmetro.
ru) has the most comprehensive coverage and also
operates Moscow’s monorail system. st petersburg
has a well developed bus and tram system as well
its metro (www.metro.spb.ru in russian only)
Business travel around russia is best undertaken by
air given the size of the country, although the
Moscow train to st petersburg is a high speed link.
Most other transport around russia is undertaken by
train. Moscow has nine major rail termini for
suburban travel and cross country, and it is the
western terminus for the trans-siberian railway to
Vladivostok on the pacific east Coast. Moscow has
international connections to the Baltic states,
eastern europe, Austria, Germany, italy and Greece.
saint petersburg has international railway
connections to Finland and Germany.
International Dialling Code
the country code is + 7
russia has 11 time zones.
Coordinated universal time (utC) + 3 hours
(Moscow) to + 10 hours (Vladivostok)
eastern standard time + 8 hours (Moscow) to
+ 15 hours (Vladivostok)
Invest in Bureau
other information can be obtained from the russian
economic Ministry’s (www.economy.gov.ru/index.
html) Foreign investment promotion Centre website:
www.fipc.ru/fipc
bnp pARibAS REAl EStAtE 10�
RuSSiA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Russia
RuSSiATypical Lease Terms
Legislation: the law that governs
leases is based on the russian
Civil Code.
Lease Length: typically 3-7 years
for offices and for warehouses it is
7-10 years.
Rent Escalation/Rent Review:
rent increases are usually fixed by
annual rental indexation of
between 3 to 7%. the terms and
type of indexation are negotiable.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
the security deposit guarantees
the execution of the tenant’s
obligations according to the lease
agreement. A deposit of 3 months
rent is required.
Rights of Renewal: the length
and terms of renewal are subject
to negotiation. if the tenant plans
to renew the length of lease
contract, the tenant is obliged to
inform the landlord with 6
months notice.
Break Options and Terminations:
premature termination is possible
upon a mutual agreement
between parties and as provided
by applicable law. if the lease
agreement is terminated by the
tenant before lease term expires,
the lease deposit is taken by the
landlord as a contract penalty.
Tenant and Landlord Obligations:
the tenant is required to use the
leased premises in accordance
with the lease agreement. this
includes using the equipment,
engineering and technical systems
in the appropriate manner and not
carrying out modifications to the
structural components of the
premises without a preliminary
written agreement with the
landlord. the tenant is bound to
pay the rent and other dues
according to conditions stated in
the agreement.
Any adjustment to rights and
obligations under the lease
agreement must have preliminary
written agreement with the
landlord. the tenant may not
sublease the premises or transfer
rights and obligations under the
lease agreement to another party
without permission. tenants may
not offer free use of the premises
or mortgage the premises. the
premises may not be used as a
deposit for an authorized capital
fund of companies or as a payment
of shares for co-operative.
the landlord is bound to hand
over the premises to the tenant in
good condition. the landlord is
obliged to carry out all minor
repairs, and if necessary, any
major repairs of structural parts
and engineering systems as a
whole.
Subletting: the tenant has the
right to sublease the leased
premises only after having signed
an agreement with the Landlord.
Legal Environment Concerning
Brokerage Law
no specific qualifications are
required to be a property
consultant in russia. Brokerage
law is governed by the russian
Civil Code. in general, if a property
is introduced to a prospective
tenant who views it with the
introducing agent, then the tenant
is legally obligated to pay the
agent a fee if the tenant signs a
lease agreement on that property.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in us
dollars, euros or rubles per
square metre per year and are
paid quarterly or monthly in
advance.
bnp pARibAS REAl EStAtE 110
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Russia
Service Charge: service charges
are quoted in us dollars per
square metre per year and are
paid quarterly in advance.
Local Property Tax: Land tax is
assessed on a percentage of the
notional value of the land plot
and is paid by the landlord on an
annual basis. this cost is passed
on to the tenant.
Acquisition Costs
usual acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Conclusion of a
lease arrangement on the
property results in the client
paying the agency a fee in the
amount of 10% of lease rate
per year. VAt is accounted
separately.
Freehold – Conclusion of
purchase contracts on the
property results in the client
paying the agency a fee in the
amount of 6% of the total cost
of the property. VAt is
accounted separately.
subletting – Conclusion of a
sublease arrangement on the
property results in the client
paying an agency fee in the
amount of 10% sublease rate
per year. VAt is accounted
separately.
•
•
•
Property Transfer Tax (Stamp
Duty): When the real estate deal
is registered the state duty is to
be paid (7,500 rubles for a legal
body, 500 rubles for an
individual). usually the state
duty is paid by the party that
takes the rights.
Value Added Tax: the current VAt
rate in russia is 18% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs and property
transfer tax.
General Market Practices
Basis of Measurement: there are
the following measuring
standards:
Bti standards for preliminary
permissions. this standard is also
widely used in regions and for
class C premises.
BoMA (Building owners and
Managers Association)
international standards for high
quality premises.
Fit Out/Reinstatement/
Dilapidations: Most premises are
delivered in shell and core
condition i.e. partially finished
open space. in some cases
suspended ceiling with lighting
and floor carpeting are included.
tenant fit out costs are partially
compensated by the granting of a
rent free period.
Use of Space: Companies occupy
office space usually as cellular
offices mixed with open spaces.
Holidays
there are certain times of the
year when the speed of
transactions are significantly
reduced due to holidays. in russia
there are a number of public
holidays from the beginning to the
middle of January and also in
early May. Besides, the period
from July until the end of August is
a peak holiday period.
Acknowledgement
We would like to thank elena
Galanova of AsterA Group for
assistance in the preparation of
this country review.
RuSSiA
bnp pARibAS REAl EStAtE 111
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Russia
Country Statistics
population (thousands) 7,498 (Census 2002)
surface area (km²) 88,412
density (per km²) 104
Local currency dinar (rsd)
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 67 72 76 73
GDP AnnUAl % 5.2 6.9 5.4 -4.0
net Direct foreiGn inveStment (US$ millionS) 4387 2524 2700 1300
lAboUr force (millionS) 3.8 3.7 3.7 3.7
UnemPloyment rAte % 20.9 18.1 1.6 20.3
inflAtion rAte AnnUAl % 12.7 6.5 10.9 9.7
AverAGe reAl WAGeS AnnUAl % 10.4 14.5 4.3 -0.6
GDP Per heAD ($ At PPP) 9,388 10,337 11,160 10,810
lenDinG intereSt rAte 18.3 12.6 16.0 17.0
exchAnGe rAte to US$ 66.8170 58.1513 55.8318 72.8807
Major Cities
City Core population
Belgrade 1,576,124
novi sad 261,121
nis 245,182
Kragujevac 176,743
Kraljevo 122,987
sources: rapublic statistic office
bnp pARibAS REAl EStAtE 11�
SERbiA
Belgrade
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Serbia
Political Structure
serbia is a parliamentary republic with a directly
elected president as head of state who serves a 4
year term. it proclaimed independency 5th of June
2006. the primary legislative body, the parliament,
is unicameral and called the national Assembly
(narodna skupstina).
Legal Structure
serbia’s civil and criminal law is based on roman
civil law although the judiciary is independent and
has equal status with the legislative and executive
branches. the judicial system is managed by the
supreme Judicial Council and consists of regional
courts, district courts, and the supreme courts of
cassation for civil and criminal appeals.
Hours of Business
Businesses usually open around 08:00 and 09:00am
and close around 17:00 and 18:00pm.
Visas
serbia is a non – eu member, so it needs a Visa for
its citizens wishing to travel to eu, but also for major
countries in the World. According to the latest
announcements from the Brussels, it is expected for
serbia to be on “White schengen List” from the
January 1st 2010. it doesn’t require Visa’s for an ex –
Yugoslav countries, except slovenia. Any foreigner
wishing to stay on the basis of an employment
contract must acquire a work permit from the local
Labour office.
Transport
national airport “nikola tesla” (www.airport-
belgrade.co.yu) is the main international airport with
more than 43 direct flights and is located about 15
km from the city centre. there is also another civil
airport “Konstantin Veliki”, located in the city of nis.
there are no direct rail services between serbia and
Western europe but there are daily services to
Budapest, Bucharest, istanbul and thessalonika. pan
european Corridor n° 10 is one of the most important
european highways passing through the country,
leading from salzburg through Belgrade and niš and
branching to Athens and sofia. Another branch of the
corridor links the Capital with Budapest.
International Dialling Code
the country code is + 381.
Coordinated universal time (ut C) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further country information can be obtained from
the invest serbia bureau (siepA):
www.siepa.sr.gov.yu
bnp pARibAS REAl EStAtE 11�
SERbiA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Serbia
Typical Lease Terms
Legislation: Leases are governed
by the serbian Law on obligations
and Contracts / serbian state
Gazette issue no. 29/78, 39/85,
45/89, 57/89 and state Gazette
issue no. 31/93. there is no
special law concerning
commercial leases.
Lease Length: no minimum initial
lease length is legally prescribed
but the maximum lease length is
10 years. in practice, lease period
are negotiable. negotiation of 10
years lease is difficult as most
landlords do not feel secure and
prefer leasing for a shorter period.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Harmonized index of
Consumer prices (HiCp) published
by the serbian republic statistic
office. the basis of rent escalation
is freely negotiable and in the
past escalation using the eurost
At index of consumer prices was
not uncommon. it is not
uncommon, especially for big
companies with mostly office
space, to have rental adjustments
after 5 years on the basis of a
market survey of rents.
Guarantee and Security Deposit:
Generally a deposit of 2 to 3
months gross rent is payable
upon the signing of the lease
contract.
Rights of Renewal: options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may be
automatically renewed for an
indefinite period, if the tenant
continues to use the property
after the end of the lease and
there is no objection by the
landlord.
Break Options and Terminations:
Break options and termination of
lease contracts for a definite term
have to be negotiated between
the parties along with
compensation. Lease contracts for
indefinite term may be terminated
by any of the parties with one
month pre-notice.
in case of transfer of the leased
property on part of the landlord
(sale, liquidation, foreclosure,
inheritance) the lease contract
shall be valid and binding the new
owner if it is registered in the real
estate register with the
recordation Agency. if the lease
contract is not registered but has
a notary authenticated date of
signing, it shall be valid and
binding on the new owner until
either the expiry date or one year
following the property transfer
date. if the lease contract is not
registered or notary
authenticated, it is valid and
binding on the new owner if the
lease contract is for an indefinite
term.
Tenant and Landlord obligations:
tenant obligations are for internal
repair and maintenance whilst
landlord obligations are for
external and structural repairs.
there are no standards for
insurance clauses so most lease
contracts do not deal with it. But
it is common, especially for big
landlords with mostly office
space, to oblige the tenant to
obtain full property insurance for
the premise.
Subletting: Full subletting is
allowed only with the written
consent of the landlord. such
consent may be given in general
form as a clause of the lease
contract. partial subletting is
allowed without consent of the
landlord unless the lease contract
explicitly prohibits it.
Legal Environment Concerning
Brokerage Law
there is no law or regulation of
the activities of real estate
brokers in serbia. Law is under
public debate it will introduce all
issues regarding real estate in
serbia.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are usually quoted in
euros per square meter per month
and are paid monthly in advance
either in eur or in middle rsd
exchange rate at the payment day.
SERbiA
bnp pARibAS REAl EStAtE 11�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Serbia
Service Charge: Building service
charges for commercial leases is
3 euros per square meter per
month. usually service charges
are paid monthly in advance with
the rent. For residential property,
fixed service charge is applied
only for modern buildings or
complexes that have
arrangements with a property
management company.
Local Property Taxes: there is
property tax in amount of 0.4% of
the value of the property and is
payable once a year.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually 1
month’s net rent plus VAt.
Freehold – Fees are usually
between 2% and 3%. For
reasonably large transactions
lower fees are negotiated,
depending on the size of the
property involved, the
particular market
characteristics at the time
etc., but even in these cases
fees below 1% of the
transaction value are
uncommon.
sublease – same as leasing
fees above.
•
•
•
Property Transfer Tax: For
purchases of property, a property
transfer tax is 2.5%.
VAT: VAt in serbia is currently
18%. professional fees are subject
to VAt.
Other Taxes/Costs: to finalize the
purchase of a property a notary
fee is paid, determined on a scale
based on the purchase price.
General Market Practices
Basis of Measurement: there is
no standard basis of
measurement in serbia. For
leases, the premises are typically
measured based upon the built up
area stated on architectural plans
for planning approval. For
property purchases construction
companies imposed Gross Area as
basis of measurement, which
includes the built up area and the
proportional part of all common
space areas of the building, which
may reach even 10 – 20% of the
built up area of the premises.
Fit Out/Reinstatement/
Dilapidations: the tenant is
typically responsible for all costs
associated with fit out. tenant is
responsible to repairing any
dilapidations, unless it is proven
that the damages are caused a
way that tenant may not be held
responsible by law or contract.
Use of Space: traditionally older
offices in serbia have tended to be
constructed as cellular offices.
recently, in newer buildings,
offices are predominantly open
space structure, providing the
possibility for the leaser to
organize the space according to
their needs.
Holidays
there are two periods during the
year when the speed of
transactions are significantly
affected by holidays in August and
from orthodox Christmas till mid
January.
Acknowledgement
We would like to thank Jovan
Jovanovic of danos & Associates
for their assistance in the
preparation of this country
review.
SERbiA
bnp pARibAS REAl EStAtE 11�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Serbia
Country Statistics
population (thousands) 5,391
surface area (km²) 49,000
density (per km²) 110
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 93 103 109 105
GDP AnnUAl % 8.5 10.4 6.4 -4.0
net Direct foreiGn inveStment (US$ millionS) 3,797 2,881 2,150 1,100
lAboUr force (millionS) 2.7 2.7 2.7 2.6
UnemPloyment rAte % 10.4 8.4 7.6 11.5
inflAtion rAte AnnUAl % 4.5 2.8 4.6 1.5
AverAGe reAl WAGeS AnnUAl % 4.2 4.3 3.4 -0.7
GDP Per heAD ($ At PPP) 17,580 19,920 21,630 20,850
lenDinG intereSt rAte 7.7 8.0 5.7 7.5
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Bratislava 448,742
Kosice 241,811
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 11�
SlovAkiA
Bratislava
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
Slovakia
Political Structure
slovakia is a parliamentary republic with a president
as head of state who is elected by popular vote to
serve a five-year term. slovakia’s parliament is the
unicameral national Council of the slovak republic
(narodna rada slovenskej republiky).
Legal Structure
slovakia’s legal system is based on civil law with
influences from Austro-Hungarian codes. the slovak
judiciary consists of local and regional courts that
are subordinate to the supreme Court that acts as
the highest court of appeal.
Hours of Business
the main business hours are Monday to Friday
08:00am – 16:30pm.
Visas
slovakia is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months from the slovak embassy
in the country of origin.
Transport
the main international airport in slovakia is
Bratislava Airport (www.letiskobratislava.sk), also
known as M. r. Štefánik Airport, and is located 9
kilometres north-east of the capital. the other
international airport serving slovakia is Košice
international Airport (www.airportkosice.sk) located
6 kilometres to the south of Košice. Bratislava
Airport is connected to the city centre by train and
bus while Košice is bus only.
public transport in Bratislava consists of buses,
trolleybus and trams and is managed a the city
municipal company, public transport Company
Bratislava Ltd (dopravný podnik Bratislava)
(www.dpb.sk). Bratislava integrated transport
(Bratislavská integrovaná doprava) acts to link the
services to in the city to the suburbs and elsewhere
in the country.
Bratislava is connected to other cities in slovakia,
with the larger towns possessing more than one
train station. it also has international rail
connections to the Czech republic, Austria and
Hungary. trains are run by the state owned company
slovak republic railways (Železnice slovenskej
republiky) (www.zsr.sk) who also provide travel
details.
International Dialling Code
the country code is + 421
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further country information can be obtained from
the slovakian investment and trade development
Agency:
www.sario.sk/?home
bnp pARibAS REAl EStAtE 11�
SlovAkiA
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Slovakia
Typical Lease Terms
Legislation: the law that governs
commercial leases is based on the
rent Act.
Lease Length: there is no
maximum term limit for leases
but 3 and 5 year leases are typical
in slovakia.
Rent Escalation/Rent Review:
indexation of rents is specified in
the lease agreement. the
Consumer price index (index
spotrebiteľských cien) produced
by the slovak statistical office is
often used although foreign
indices such as the eu Consumer
price index may also be used.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
either a deposit of 3–4 months’
net rent or a bank guarantee is
necessary to complete the lease.
Rights of Renewal: if an option to
renew was not previously agreed,
the lease will terminate and must
be renegotiated.
Break Options and Terminations:
Break options are negotiable but
tenants should be aware of notice
periods as the options will expire
and become null and void if notice
is not delivered on time. some
lease agreements allow for the
termination of the lease prior to
the break option under the
condition of a penalty, subject to
negotiations and current market
conditions.
Tenant and Landlord Obligations:
normally the landlord is
responsible for building
maintenance, insurance, and
technical installations and the
tenant is responsible for
maintenance and insurance
within the premises.
Subletting: the subletting of
property is allowed but only with
the prior written consent of the
landlord. the landlord is not
required to approve the proposed
sublease although must give
reasonable grounds for denying a
sublease.
Legal Environment Concerning
Brokerage Law
there is no legal requirement to
have a licence to trade as an
agent in slovakia. each party
typically pays their respective
agent. on occasion the landlord’s
agent will sometimes earn a fee of
half a month’s net rent from the
tenant or the landlord. the
tenant’s agent only earns fees
directly from the tenant.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid quarterly in advance.
sometimes negotiations result in
rents being paid monthly in
advance.
Service Charge: service charges
are quoted in euros per square
metre per month and are paid
monthly in advance.
Local Property Tax: paid directly
by the landlord and billed to the
tenant via the service charge.
SlovAkiA
bnp pARibAS REAl EStAtE 11�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Slovakia
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – 14 to 15% from one
year’s rent (equates to
approximately 2 months net
rent).
Freehold – 1.5% to 3% of the
sale price.
subletting – same as leasing.
Property Transfer Tax (Stamp
Duty): the property transfer tax
was cancelled in 2005. now it is
only the purchase price plus VAt.
Value Added Tax: the VAt rate in
slovakia is currently 19% and
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs, and property
transfer tax.
•
•
•
General Market Practices
Basis of Measurement: there are
two standard measuring
practices:
net Lettable Area or Building
owner’s and Manager’s
Association standard (BoMA).
this is the most commonly
used area calculation and is
used for calculating the rent.
BoMA includes main usable
space, ancillary space such as
toilets, kitchens, separating
walls, and circulation space.
Areas used for technical use,
structural walls and elevators
are excluded. A “gross-up”
factor of 5 to 12% may be
applied to the net Lettable
Area, particularly if the
building is new.
Gross Base Area or BGF
(Brutto Geschossfläche). this
area is measured from
internal wall to internal wall
and includes all the gross
area within.
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard.
upgrading space to full air
conditioning is generally the
responsibility of the tenant. When
letting second generation space,
the landlord will usually assume
the costs of installing partitioning
according to a space plan
provided by the tenant.
•
•
When vacating premises, the
tenant is responsible for
reinstating the space to the
condition it was in when they first
occupied the space, allowing for
standard wear and tear. tenant
improvements that were
undertaken during occupancy
cannot be sold to the landlord
unless otherwise stipulated in the
lease. the landlord has the option
generally of leaving the premises
in their current condition.
Use of Space: Cellular and open
plan space are both common.
Holidays
there are certain times of the
year when the speed of
transactions are reduced due to
holidays. August and January tend
to generally be the main holiday
periods.
Acknowledgement
We would like to thank natalia
trihob and richard Lemon of
dr Max Huber & partners for
assistance in the preparation of
this country review.
SlovAkiA
bnp pARibAS REAl EStAtE 11�
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Slovakia
Country Statistics
population (thousands) 44,068
surface area (km²) 505,000
density (per km²) 87
Local currency euro
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 1,230 1,275 1,290 1,235
GDP AnnUAl % 3.9 3.7 1.2 -4.2
net Direct foreiGn inveStment (US$ millionS) -72,242 -67,654 -14,139 -5,655
lAboUr force (millionS) 21.6 22.2 22.8 23.0
UnemPloyment rAte % 8.5 8.3 11.3 18.3
inflAtion rAte AnnUAl % 3.5 2.8 4.1 -0.8
AverAGe reAl WAGeS AnnUAl % 0.7 1.5 0.8 1.2
GDP Per heAD ($ At PPP) 28,398 30,504 31,300 30,000
lenDinG intereSt rAte 5.8 6.6 7.4 6.5
exchAnGe rAte to US$ 0.7964 0.7306 0.6803 0.7533
Major Cities
City Core population
Madrid 2,823,667
Barcelona 1,454,695
Valencia 735,738
seville 695,266
saragossa (Zaragoza) 600,781
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1�0
SpAinMadrid
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
Political Structure
spain is a parliamentary democracy with a
hereditary constitutional monarch as head of state.
spain is divided into 17 regions that have own
governments and administrative structure but with
different levels of autonomy. the supreme legislative
authority is the national parliament (Cortes
Generales) that is bicameral, consisting of the upper
chamber, the senate, and the lower chamber, the
Congress of deputies.
Legal Structure
the spanish legal system is based on civil law. At the
top of court system is the supreme Court that is
court of final appeal, followed by the Audiencia
nacional that deals with national level cases, the
Audiencia provincial that deals with cases at a
provincial level and the lowest level of the judiciary,
the unipersonal courts, which are judge run courts.
Hours of Business
the main business hours are Monday to Friday
09:00am – 14.00pm, 16:00pm – 20.00pm.
Visas
spain is a member of the schengen area agreement.
Holders of an eeA (eu Member states, iceland,
Liechtenstein and norway) or swiss passport do not
require a visa. nationals from eu-countries as well
as switzerland and Liechtenstein may also enter
without a visa. Citizens of the united states of
America do not require a visa for entry. A residence
permit is required if intending to stay for a period
exceeding 3 months.
Transport
the main international airport is Madrid Barajas
airport (www.aena.es) located 12 kilometres north
east of the city centre. Barajas airport is connected
to Madrid via Madrid’s underground system, the
Metro (www.metromadrid.es). Madrid also has a
light rail system called Cercanías (www.renfe.es/
cercanias). All of Madrid’s transport systems are
part of the Consorcio regional de transportes (www.
ctm-madrid.es).
the two largest operators in spain are the state
owned renfe operadora, the former spanish
national railway network (http://horarios.renfe.es)
that operates the broad gauge lines and
Ferrocarriles españoles de Vía estrecha or FeVe
(www.feve.es/) who operate most of the narrow
gauge railways.
International Dialling Code
the country code is + 34
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further information can be obtained from the invest
in spain bureau:
www.investinspain.org
bnp pARibAS REAl EStAtE 1�1
SpAin
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
SpAinTypical Lease Terms
Legislation: the statue that
governs leases is based on the
spanish Civil Code and the 1994
urban Leases Law.
Lease Length: negotiable, but
typically 5 years.
Rent Escalation/Rent Review:
rent is adjusted annually based
on the Cost of Living index.
indexation clauses in leases
usually include an automatic
adjustment whenever the Cost of
Living index changes by a
predefined amount.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit of 2 months net rent is
necessary to complete the lease.
in some cases, a bank guarantee
is required.
Rights of Renewal: the tenant
has no guaranteed security of
tenure. options to renew can be
negotiated with the length and
terms of such options being
subject to negotiations.
Break Options and Terminations:
Break options are negotiable, but
tenants should aware of notice
periods otherwise terms can
continue automatically. in most
cases if the either party does not
give notice in advance as agreed,
the lease will automatically
continue for a previously agreed
period of time. some lease
agreements allow for the
premature exit of a lease under
the condition of a penalty. the
penalty for early lease
termination used to be the
equivalent of the total remaining
lease liability, but now it is usually
subject to negotiations and
depends on current market
conditions.
Tenant and Landlord Obligations:
normally the landlord is
responsible for building
maintenance, structural repairs,
insurance, and technical
installations and the tenant is
responsible for maintenance and
insurance within the premises.
Subletting: Generally, subletting
is allowed with the written
consent of the landlord. the
landlord must accept the
subtenant if they have an average
covenant but is allowed to
prohibit subletting if the use of
the premises by a subtenant
substantially deviates from the
original use by the main tenant. if
not explicitly detailed in the lease,
tenants are able to charge higher
rents to subtenants then what
they pay to the landlord.
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
SpAinLegal Environment Concerning
Brokerage Law
Agents do not need to be
registered to practice in spain.
the spanish Civil Code and the
spanish Commerce Code govern
spanish brokerage law. the agent
and tenant, or the agent and
landlord, typically sign a mandate
agreement or formal intermediary
fees recognition for professional
services. depending on the
structure of the transaction, fees
will be paid by either the tenant
or more usually the landlord.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in euros
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in euros per
square metre per month and are
paid monthly in advance along
with the rent.
Local Property Tax (Impuesto de
Bienes Immuebles): this tax is
assessed on a percentage of the
notional value of the building and
paid by the landlord on an annual
basis.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually
between 8%-12% of the first
year’s net annual rent.
Freehold – Fees, paid by the
seller are typically 0.5-3% of
the purchase price
subletting – in a landlord’s
market, a subtenant would
pay fees to the agent
instructed by the main tenant
equivalent to 15% of the net
annual rent. in tenant friendly
markets, the main tenant
usually assumes part, or all,
of both the commission fees.
Property Transfer Tax (Impuesto
de Transmisiones y Actos
Juridicos Documentados
(ITPAJD)): the purchaser of a
building will pay VAt of 16% (7%
on new construction) of the sales
price upon first sale of the
building. When the building is sold
again, if the seller is a legally
registered company the tax will
be 16% of the sales price.
Alternatively if it is a private
individual who sells the building
then they will be liable to pay tax
(itp – impuesto de transmisiones
patrimoniales) at 7% of the
purchase price.
•
•
•
Value Added Tax: the current
VAt rate in spain is 16% and
payable on all forms of
transactions including rent,
building service charge, agents
fees and notary costs.
Other Taxes/Costs: to finalise a
purchase of a property, a
registered notary must be
instructed who will charge a fee
of 0.5-1% of the purchase price.
General Market Practices
Basis of Measurement: there are
two standard measuring
practises:
net Area (supeficie util) –
this includes main usable
space together with ancillary
space such as toilets and
kitchens and parking spaces.
Gross Area (superficie
Construida) – this includes
the net area plus separating
walls, circulation space,
parking spaces and area used
for technical uses and
elevators. this is the most
commonly used area
calculation in leases.
•
•
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
Fit Out/Reinstatement/
Dilapidations: new office
developments generally include
raised floors, carpeting and
partitioning as a standard and
such costs are borne by the
landlord. upgrading space to full
air conditioning is generally the
responsibility of the incoming
tenant as only a top cooling/fan
pipe system is normally installed
as standard in new buildings.
When vacating premises, the
tenant is responsible for
reinstating the space to the
condition it was in when they had
first occupied the space. tenant
improvements that were
undertaken during occupancy
belong to the landlord.
Use of Space: Companies typically
occupy office space as open plan
space. the use and density of
space must be planned in
accordance to the Ley de
prevención de riesgos Laborales,
which is administered by the
Labour office. these guidelines
govern the distance from natural
light, position of a desk, position
of a pC on the desk etc. and must
be taken into account when
drafting a workspaces plan.
Holidays
there are certain times of the
year when the speed of
transactions are significantly
reduced due to holidays. spanish
summer holidays are typically
taken in August. there are also a
number of public holidays during
easter in April/May, when many
people will take holidays for a
number of days.
SpAin
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Spain
Country Statistics
population (thousands) 9,081
surface area (km²) 450,000
density (per km²) 20
Local currency swedish Krona
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 309 318 316 299
GDP AnnUAl % 4.5 2.7 -0.4 -5.5
net Direct foreiGn inveStment (US$ millionS) 2,550 -15,129 5,691 -3,569
lAboUr force (millionS) 4.8 4.8 4.9 4.9
UnemPloyment rAte % 7.0 6.1 6.2 9.3
inflAtion rAte AnnUAl % 1.4 2.2 3.5 -0.5
AverAGe reAl WAGeS AnnUAl % 1.6 1.4 0.3 3.5
GDP Per heAD ($ At PPP) 34,902 36,338 36,770 34,770
lenDinG intereSt rAte 4.3 5.2 4.3 2.2
exchAnGe rAte to US$ 7.3731 6.7553 6.5958 8.0286
Major Cities
City Core population
stockholm 743,703
Gothenburg 462,470
Malmö 257,574
uppsala 188,478
Linköping 132,500
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1��
SwEdEn
stockholm
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Switzerland
Turkey
Ukraine
United Kingdom
Sweden
Political Structure
sweden is a parliamentary monarchy. the
parliament (riksdag) is unicameral and consists
of 349 members who are elected to serve
four-year terms.
Legal Structure
the swedish legal system is a form of civil law but is
not codified like other countries. there are
significant influences from Germanic law and from
Common Law systems also with indigenous customs.
the swedish judicial system is composed of three
levels of courts. All criminal and civil cases are
initially held in district courts; followed by a court of
appeals and finally the supreme Court.
Hours of Business
the main business hours are Monday to Friday
08.30am – 17:00pm.
Visas
sweden is a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) or swiss
passport do not require a visa. nationals from eu-
countries as well as switzerland and Liechtenstein
may also enter without a visa. Citizens of the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months registered with the
swedish Migration Board.
Transport
the principal international airports serving sweden
are Arlanda Airport (www.arlanda.se) that is located
43 kilometres north of stockholm, and Göteborg-
Landvetter Airport (www.lfv.se/en/Airports/Goteborg)
located 25 kilometres east of Gothernburg.
Aralanda airport is connected to stocklhom by bus
and train service, Arlanda express (www.
arlandaexpress.com). Both stockholm and
Gotherburg have well developed public transport
networks. stockholm has a light rail and metro
systems as well as buses and is run by
storstockholms Lokaltrafik AB, (stockholm public
transport) (www.sl.se) on behalf of the council.
Gothenburg has a tram system plus light rail and is
run by Göteborgs spårvägar AB (www.sparvagen.
goteborg.se) on behalf of by Västtrafik (www.
vasttrafik.se/en) the regional transport organiser
who also provide timetable details.
the rest of sweden is well by extensive train service,
although the network is most dense in the south of
country. Flying is an effective means of transport to
the north of the country. the train service is run by
swedish state railways (sJ) (www.sj.se) who also
provide travel details.
International Dialling Code
the country code is + 46
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further information can be obtained from the invest
in sweden bureau:
www.isa.se
bnp pARibAS REAl EStAtE 1��
SwEdEn
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Switzerland
Turkey
Ukraine
United Kingdom
Italy
Sweden
SwEdEnTypical Lease Terms
Legislation: Commercial lease
contracts in sweden are governed
by the real property Code, which
stipulates mandatory regulations
for commercial leases. swedish
lease contracts are short (2-4
pages) with appendices covering
details such as the indexation of
rent and service charges. the
association of property owners
have published standard
contracts for different types of
properties (hotels, shopping
centres, offices). it is not
compulsory to use the standard
contracts and any form of
contract is acceptable as long as
it corresponds to swedish
legislation regarding commercial
properties. Most companies
utilise the standard leases but
have their own standard
appendices. As most companies
are familiar with the standard
leases the negotiation process
tends to be shorter than in many
other countries in europe.
Lease Length: typically
commercial leases are for terms
of 3 to 5 years. When signing
leases in new projects or when
renting larger spaces the lease
lengths are normally for terms of
7 – 10 years.
Rent Escalation/Rent Review:
rents are indexed annually to the
Consumer prices index but require
the lease terms to be at least 3
years long. rental escalations
typically are adjusted according
to the index each year in october.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit or a bank guarantee is
seldom required to complete the
lease.
Rights of Renewal: the tenant
has a right of renewal, which is
governed by law. if the landlord
wants to terminate the lease
without a “passed” reason the
landlord has to pay damages to
the tenant. “passed” reasons are
reasons considered fair as
compared to normal market
conditions. if there is dispute
between the tenant and landlord
the tenant may request a
judgement from a rent tribunal
(Hyresnamnd) to determine if the
reason given for termination is
fair. the decision is not legally
binding but is normally agreed to
by both parties.
Break Options and Terminations:
Break options are not common in
short term leases (3 – 5 years)
but do occur in longer term leases
(7 – 10 years). tenants should be
aware that 9 – 12 months notice
has to be served if the tenant
wants to change terms or
terminate before the end of the
lease period. the most common
termination periods are March,
september and december.
Tenant and Landlord Obligations:
tenants are responsible for all
internal repairs and maintenance,
whilst landlords are responsible
for external repairs, maintenance
and insurance. the extent of
tenant responsibility can vary and
this is always negotiated when
signing a new lease.
Subletting: Generally subletting
is allowed, with the written
consent of the landlord, which is
not to be unreasonably withheld.
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Switzerland
Turkey
Ukraine
United Kingdom
Sweden
Legal Environment Concerning
Brokerage Law
the real estate Brokers Law
1995:400, with subsequent
amendments, governs brokerage
law in sweden and requires
agents to be university educated,
objective, and licensed by
Fastighetsmaklarnamnden. the
law deals primarily with
residential transactions however,
where agents act for both buyer
and seller, and does not apply
directly to commercial real estate
transactions where both parties
typically instruct different agents.
As a result, there are a number of
commercial agents that do not
possess a license.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in seK,
swedish Kroner, per square metre
per annum and paid in advance on
a quarterly basis.
Service Charge: this is sometimes
quoted within the rental figure
and includes water, cleaning of
common areas and snow removal,
but not electricity. Heating is not
included in the service charges
but is charged à conto.
Local Property Tax: this is
normally paid by the tenant as a
share of total rents in the
property or as a share of total
leaseable area in the building.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually
10%-20% of the first years’ net
annual rent (dependant on the
size of the property and the
geographic region). depending
on the structure of the
transaction, the fees will be
paid by either the tenant or
the landlord. When the fee is
paid by the tenant it is
normally set on an hourly
basis or a fixed fee.
Freehold – Fees are paid by
the seller of the property and
are negotiable dependant on
the value of property. Fees are
typically between 2-3% of the
agreed purchase price for
properties up to seK 100
million.
subletting – Fees are typically
the same as leasing fees
above but in some instances
fees are paid as a percentage
of the savings realised.
•
•
•
Property Transfer Tax (Stamp
Duty): When purchasing a
property, the purchaser is
responsible to pay stamp duty
equal to 3% of the purchase price.
Value Added Tax: the current VAt
rate in sweden is 25% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, and notary costs.
Other Taxes/Costs: When
purchasing a property, if the
purchaser requires a mortgage
deed, a 2% mortgage deed tax is
payable (based upon the value of
the deed).
General Market Practices
Basis of Measurement: the
Lettable Area is defined as the
area occupied by internal walls
and partitions excluding wall
thickness and external
projections. When there is a single
tenant building the normal
measurement is the Gross
internal Area, which also includes
stairwells, lobbies, corridors, etc.
SwEdEn
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Switzerland
Turkey
Ukraine
United Kingdom
Sweden
Fit Out/Reinstatement/
Dilapidations: offices are
provided based on the needs of
the tenant (the landlord will
expect to provide partitioning and
air-cooling). When vacating
premises the tenant is responsible
for reinstating the space to the
condition that it was in when they
had originally occupied it. Many
leases state that normal wear and
tear does not have to be
reinstated.
Use of Space: the majority of
offices built 1970 – 1980 are used
as cellular offices. since the late
1990’s many of those buildings
have been renovated and now are
open plan offices. Current demand
is for open plan offices as
efficiency and cost per
workstation is further scrutinised.
Holidays
there are certain times of the
year in which the speed of
transactions are reduced due to
holidays, normally activity slows
after mid-summer in June and is
closed during July. Activity does
not particularly start again until
the middle of August.
Acknowledgement
We would like to thank Helén
silverstolpe and Max Barclay of
newsec Advice AB for their
assistance in the preparation of
this country review.
SwEdEn
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Turkey
Ukraine
United Kingdom
Switzerland
Sweden
Country Statistics
population (thousands) 7,484
surface area (km²) 41,000
density (per km²) 181
Local currency Franc
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 275 284 289 278
GDP AnnUAl % 3.4 3.3 1.6 -3.6
net Direct foreiGn inveStment (US$ millionS) -41,898 -8,954 -21 927
lAboUr force (millionS) 3.9 4.0 4.1 4.1
UnemPloyment rAte % 3.3 2.8 2.6 3.8
inflAtion rAte AnnUAl % 1.1 0.7 2.4 -0.7
AverAGe reAl WAGeS AnnUAl % 0.1 0.8 -0.4 0.6
GDP Per heAD ($ At PPP) 37,834 40,305 41,270 39,810
lenDinG intereSt rAte 3.0 3.1 3.3 2.9
exchAnGe rAte to US$ 1.2539 1.2004 1.0831 1.1375
Major Cities
City Core population
Zürich 337,553
Geneva 172,598
Basel 169,875
Bern 123,783
Lausanne 114,034
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1�0
SwitzERlAndBern
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Turkey
Ukraine
United Kingdom
Switzerland
Political Structure
switzerland is a federal republic constructed from
a confederation of 26 states (cantons). the swiss
state is highly devolved with the federal authorities
having limited power. there is no head of state in
switzerland as such although the nearest equivalent
is the president of the Confederation. the swiss
parliament is bicameral, consisting of the national
Council that represents the whole population and
the Council of states made up of members from the
cantons. Legislation can be enabled by both houses
and is not vetoed by the executive but may be
challenged by citizens. As such citizen led
referendums are important legislative feature of
swiss democracy.
Legal Structure
switzerland’s legal system is based on civil law
system but is also influenced by local customs. the
judiciary operates at a commune, canton and federal
level, although principle administration of justice is
mainly a function of the canton.
Hours of Business
the main business hours are Monday to Friday
08.30am – 12.00pm, 14.00pm – 17:00pm.
Visas
switzerland is not currently a member of the
schengen area agreement though may join in 2009.
Holders of an eeA (eu Member states, iceland,
Liechtenstein and norway) passport do not require a
visa. nationals from Liechtenstein and the united
states of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months. residency permits are
associated with job placements and have to be
applied for in the swiss canton in which the
company is located.
Transport
switzerland has international airports at Zurich,
Geneva and Basel. Zurich Airport (www.zurich-
airport.com) is located 12 kilometres north of the
city and is the largest by volume of air travel.
Geneva Cointrin international Airport www.gva.ch
is located 5 kilometres north of Geneva and
euroAirport Basel-Mulhouse-Freiburg
(www.euroairport.com) is located 8 kilometres
north west of Basel.
switzerland has a very well developed public
transport network. Zurich canton is extremely well
connected with trains, buses, trams and boats that
are run by multiple operators under Zürich transport
network (www.zvv.ch/en) umbrella. Geneva’s public
transport is operated by transports publics Genevois
(www.tpg.ch/fr).
Given switzerland’s position in the Alps and at the
centre of europe it has good international
connections, especially to France, Germany and
italy. swiss Federal railways (www.sbb.ch/en) is the
state operator that runs the railway across
switzerland.
International Dialling Code
the country code is + 41
Coordinated universal time (utC) + 1 hour
eastern standard time + 6 hours
Invest in Bureau
Further information can be found from oseC, the
swiss umbrella organisation for foreign trade and
investment:
www.locationswitzerland.ch
bnp pARibAS REAl EStAtE 1�1
SwitzERlAnd
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Turkey
Ukraine
United Kingdom
Switzerland
SwitzERlAndTypical Lease Terms
Legislation: the law that governs
leases is based on the regulations
of the Codes des obligations/
obligationenrecht of 1911 as
modified on 15 december 1989
and subsequent amendments.
Lease Length: typical leases in
switzerland are for 5 years.
Rent Escalation/Rent Review:
only in leases of 5 years or more
can the rent be adjusted annually
based on the Federal or Cantonal
Consumer price index as specified
in the lease. Leases of 3 or more
years can include fixed increases
at specified dates.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit or bank guarantee of 3-6
months rent is generally required
when the lease is signed.
Rights of Renewal: on lease
expiry the lease will automatically
renew only if there is a right of
option. the renewal will be on the
same terms as the original lease
with the rent adjusted by the
Consumer price index (if allowed
by the original lease), unless
either the landlord or tenant
notify the other in writing within
the specified notice period. the
notice period is usually 6 or 12
months prior to the end of the
lease. it is possible to include a
clause that specifies that the
lease will automatically expire
unless notice to renew is given by
one party and accepted by the
other.
Break Options and Terminations:
For both the tenant and landlord
a break or early termination can
only be operated in accordance
with the negotiated terms of the
lease. the tenant does not have
the right to cancel the lease
before the break option dates
unless prior agreement from the
landlord has been obtained. if
granted, this may be subject to a
penalty, the amount of which will
depend on market conditions and
agreement between the specific
parties.
Tenant and Landlord Obligations:
tenant obligations are internal
repair, maintenance and
insurance within their
accommodation while landlord
obligations are main structural
repairs, building insurance and to
keep the roof watertight. Land
taxes, maintenance and building
insurance is paid by the landlord,
but only maintenance (not plant
renewals) and additional services,
such as security, central reception
are invoiced to the tenant.
Subletting: According to
regulations of the Codes des
obligations/obligationsrecht, the
tenant is permitted to sublet the
lease with written consent from
the landlord. Any profit rent
premium must be offered to the
landlord.
Legal Environment Concerning
Brokerage Law
no specific qualifications are
required to be a property
consultant in switzerland.
Brokerage Law is strictly
controlled by the Code des
obligations/obligationenrecht. Any
introduction made by that agent,
provided that it is first made by an
agent and not another, that leads
to a successful transaction will
then result in an obligation by the
client to pay fees.
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Turkey
Ukraine
United Kingdom
Switzerland
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are normally quoted
in swiss Francs per square metre
per annum and are paid either
monthly or quarterly in advance.
Service Charge: service charges
are quoted in swiss Francs per
square metre per annum and are
paid with the rent either monthly
or quarterly in advance, based on
a provisional amount, which is
then adjusted once the actual cost
is known at the end of the year.
Local property tax (impôt
Foncier/Liegenschaftssteuer): this
tax is assessed on the basis of
rental value of the building, as
assessed by the Cantonal valuer,
using strict criteria laid down by
law, and paid by the landlord on
an annual basis. depending upon
the canton, the cost may or may
not be passed on to the tenant.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are typically
10-15% of the first year’s net
rent. the fees are paid either
by the tenant or landlord
depending on the transaction.
third party cost such as
brochures, advertising, direct
marketing, banners are
incorporated in this cost.
Freehold – Fees are paid
either by the seller or the
buyer, depending on the
transaction, and negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 3-5% of the agreed
purchase price.
subletting – Fees are typically
10-15 % of the first year’s net
rent (inclusive of the value
agreed on the sale of any
fixtures and fittings). the fees
are paid either by the tenant
or landlord depending on the
transaction. official “fee
scales” are published in each
canton by the respective
property management agents
association.
•
•
•
Property Transfer Tax: For the
purchase of a property, the
purchaser will be responsible for
registration cost and land
transfer taxes, notary fees, and
the other small expenses (stamps,
mortgage costs). the notary is in
charge of collecting these taxes.
these costs will vary from canton
to canton.
Value Added Tax: the current VAt
rate in switzerland is 7.6 % and
payable on most forms of
commercial transaction including
service charges and agents fees
but is not paid on property
acquisitions or the tax charged
thereon.
General Market Practices
Basis of Measurement: in
switzerland, whilst general
definitions are provided by the
society of engineers and
Architects (siA), there are
variations from canton to canton.
the following terms are
commonly used to define floor
areas:
SwitzERlAnd
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Turkey
Ukraine
United Kingdom
Switzerland
Gross external (surface Brute
externe) – Gross areas
measured to the external face
of the external walls,
including the shell of the
building. Where a pitched roof
is constructed there may also
be a proportion of a
theoretical floor included,
depending upon the size and
pitch of the roof. it includes
basements and attic spaces,
whether they are fitted out or
not, balconies, loggias and
accessible roof verandas
(excluding street-level
verandas).
Gross internal (surface Brute
interne) – net areas excluding
the shell of the building. the
gross internal takes into
account the bare exterior of
the walls and is equal to the
gross external after having
deducted basements and attic
spaces not fitted out for
residential or professional
activities (the attic spaces to
be deducted are considered to
be areas of which the ceiling
height is less than 1.50 m),
roof verandas, balconies,
loggias, and open areas
located on the ground floor
such as parking areas.
•
•
net (surface utile nette) –
net Lettable Areas. the net is
equal to the gross internal
after having deducted
staircases, lifts, vertical
ducts, corridors, toilets and
landings. Common areas such
as entrance halls or cafeteria
are added to the lease as a
proportion of the tenant’s
ease space of the total
building. in addition,
verandas, balconies and roof
terraces in the exclusive use
of a single tenant are also
normally added back into the
net area.
Fit Out/Reinstatement/
Dilapidations: office buildings
are usually carpeted with
suspended ceilings and
mechanical and electrical
servicing. Lighting and wiring is
usually done by tenant. raised
floors and cooling systems are
generally standard in new
buildings. in a tenants market the
landlord may assume the cost of
partitioning, or a part of the cost.
in a landlords market, these costs
are usually borne by the tenant.
All works, decorations,
installation, additions, and
furnishings that the tenant may
undertake on the premises during
the lease shall, at the end of the
lease or at the end of renewal,
belong to the landlord, unless the
latter should demand the return
of the premises to their original
state.
• Use of Space: Companies occupy
office space usually as cellular
offices mixed with open spaces.
Holidays
there are 10 official national
holidays (including easter and
Whit sunday). in addition to
national holidays, or instead in
some instances, there are
cantonal holidays. For example
the Canton of Geneva has Jeûne
Genevois that occurs on the
thursday following the first
sunday of september, and
restauration de la république on
31 december that has replaced
Boxing day. As a result of the
school holiday timetable, business
can be affected during February
and october when either one or a
two week break occurs, and in the
period from the beginning of July
to the end of August.
SwitzERlAnd
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Turkey
Ukraine
United Kingdom
Switzerland
Country Statistics
population (thousands) 72,974
surface area (km²) 781,000
density (per km²) 93
Local currency turkish Lira
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 799 836 845 807
GDP AnnUAl % 6.9 4.7 1.1 -4.5
net Direct foreiGn inveStment (US$ millionS) 19,065 20,089 14,000 7,000
lAboUr force (millionS) 24.4 23.5 24.1 24.5
UnemPloyment rAte % 9.8 9.9 10.7 14.5
inflAtion rAte AnnUAl % 9.6 8.8 10.4 6.2
AverAGe reAl WAGeS AnnUAl % 0.5 1.3 -0.4 0.3
GDP Per heAD ($ At PPP) 11,710 12,460 12,730 12,100
lenDinG intereSt rAte 28.0 27.0 26.5 23.0
exchAnGe rAte to US$ 1.4285 1.3029 1.3015 1.6243
Major Cities
City Core population
istanbul 8,260,438
Ankara 2,984,099
izmir 2,081,556
Bursa 1,066,559
Adana 1,041,509
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1��
tuRkEY Ankara
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
Turkey
Political Structure
turkey is a republic with a president as head of state
who is elected by parliament to serve a 5 year term.
the turkish parliament, the Grand national
Assembly (turkiye Buyuk Millet Meclisi), is
unicameral.
Legal Structure
turkey’s legal system is based on civil law with
influence from various european countries. the court
system in turkey is judges only. the lowest levels of
courts are the civil peace courts and the courts of
first instance. the criminal courts are the courts of
first instance and the central criminal courts. the
state security courts deal with organised crime and
terrorism..
Hours of Business
the main business hours are Monday to Friday
08.30am – 17:30pm.
Visas
Visiting turkey usually requires a visa although the
requirements vary depending upon the country of
origin of the person visiting. three-month visas can
be obtained from the appropriate consulate along
with residency permits. turkey is not a member of
the schengen area agreement.
Transport
istanbul’s Ataturk international Airport and
esenboğa international Airport at Ankara are the
primary international airports. Atatürk international
Airport (www.ataturkairport.com/eng) is located 24
kilometres to the south west of the city centre, on
the european side of istanbul. esenboğa
international Airport (www.esenbogaairport.com) is
located 28 kilometres to the north west of Anakara
city centre.
istanbul’s public transport system consists of buses,
light rail and newly constructed tram and metro
system. details for rail travel can be obtained from
istanbul public transportation Company (www.
istanbul-ulasim.com.tr/en). other details can be
obtained from the municipal transport authority of
istanbul (www.iett.gov.tr/en/index.php). Anakara is
served by buses, light rail and a metro system run by
the electricity, Gas, Bus General directorate.
Most of turkey’s major cities and towns are
connected by rail services run by turkish state
railways (www.tcdd.gov.tr) who are currently in the
process of building a number of high speed links
between cities.
International Dialling Code
the country code is + 90
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further information can be obtained from the
investment support and promotion Agency’s invest
in turkey website:
www.invest.gov.tr
bnp pARibAS REAl EStAtE 1��
tuRkEY
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
Turkey
tuRkEYTypical Lease Terms
Legislation: the laws that
regulate commercial and
residential leases are Civil Code,
obligation Law, Condominium Law
and Law numbered 6570
Governing real estate Leases.
General regulatory rules with
regard to validity of a lease
agreement arranged under
turkish Civil Code numbered 4721
were changed in 2002. the
turkish Law of obligations” draft
statute comprises of significant
provisions on lease, has been
completed and has recently
adopted by parliament.
Lease Length: Most commercial
lease agreements in turkey are
signed for a 5 year term. For
shopping centers, this term
normally increases to 7 years for
most tenants (but for small sized
units usually 5 years) and
normally not be less than 10
years for anchor tenants.
Rent Escalation/Rent Review:
parties are free to pre-determine
annual indexation rate. For turkish
Lira lease contracts, indexation is
generally based on Cpi.Foreign
currency payments may also be
subject to indexation, annually by
1-5 % or rates such as LiBor or us
Cpi. rent review usually happens
at the end of rent term.
Guarantee and Security Deposit:
the amount of deposit money is
not restricted by legislation.
parties negotiate the deposit
amount, taking properties of
leased premises, as well as other
variables into consideration. the
procedure in practice equates to
1-3 months rent. Bank letters or
bills of guarantee may replace
cash deposits in more major
leases.
Rights of Renewal: the option
to renew is usually for one or
more periods.
Break Options and Terminations:
For the tenant a break or early
termination can be operated in
accordance with the negotiated
terms of the lease. if granted this
may be subject to a penalty, the
amount of which will depend on
market conditions and agreement
between the specific parties.
tenants may not have their leases
ended by the landlord.
Tenant and Landlord Obligations:
tenant obligations are internal
repair, maintenance and
insurance within their
accommodation whilst landlord
obligations are main structural
repairs and building insurance.
property taxes are paid by the
landlord.
Subletting: subject to the lease
terms, the tenant is only
permitted to sublet the lease with
written consent from the
landlord. Again subject to lease
terms, the tenant may be
permitted to sublease to sister
companies without prior consent
of the Landlord.
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
Turkey
Legal Environment Concerning
Brokerage Law
no specific qualifications are
required to be a property
consultant in turkey. Agents may
act as a representative of one
party or alternatively act as an
intermediary.
previously signed contracts are
required for the agent to charge a
fee for the services provided. the
turkish Law of trade governs the
agents’ activities.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are normally quoted
in turkish Lira or in us$ per
square metre per month and are
paid either monthly or quarterly
in advance. there is greater
tendency towards charging in
euros in recent years.
Service Charge: service charges
are quoted in turkish Lira per
square metre per annum and are
paid with the rent monthly in
advance, based on a provisional
amount, which is then adjusted
once the actual cost is known at
the end of the year. service
charges are usually 10-15 % of
collected rent.
Local Property Tax: this tax is
assessed on the basis of values as
assessed by the special Valuation
Committees every 4 years and
paid by the landlord. the property
tax is charged annually by
municipalities at 0.1–0.6% of value
depending on the nature of
property and is payable in two
instalments (31 May and 30
november). this cost may not be
passed on to the tenant. the
tenant normally pays a minimal
amount of environmental tax to
the local municipality.
Withholding tax: Corporate
tenants are normally required to
pay withholding tax in the name
of the individual landlords. in the
case of corporate landlords,
tenants are required to pay VAt
instead of withholding tax. such
VAt is normally recoverable by
most corporate tenants.
Acquisition Costs
typical acquisition costs that
a company will have to pay
when buying or leasing new
premises include:
Agents’ fees
Fees are agreed beforehand and
vary depending upon the
property, time of selling, level of
service and so on.
Leasing – Fees are typically
8–10% of the first year’s gross
rent. the fees are usually paid
by the tenant.
•
purchasing – Fees are paid
either by the seller or the
buyer, depending on the
transaction, and negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 1.5–2% of the agreed
purchase price.
subletting – same as leasing
Property Transfer Tax: the
acquisition of turkish property is
subject to 1.5% transfer tax. the
same charge will be applicable,
when the property is sold.
Value Added Tax: the current VAt
rate in turkey is 18% and payable
on all forms of commercial
transactions including rents,
service charges (if applicable),
and agents fees and property
acquisitions where the seller is a
company. the sale of residential
units of less than 150 square
metres is subject to VAt at 1%. VAt
paid for buildings and land may
be recoverable for corporate
buyers. VAt paid by individuals is
not recoverable.
•
•
tuRkEY
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
Turkey
General Market Practices
Basis of Measurement: in turkey,
the following terms are commonly
used to define floor areas:
Gross external – Gross areas
measured to the external face
of the external walls,
including the shell of the
building. this does not
normally include basements
and attic spaces, whether
they are fitted out or not, but
includes balconies.
Fit Out/Reinstatement/
Dilapidations: office buildings
are usually not carpeted and
without ceilings, separators and
lighting accessories (in a shell
and core condition). some of the
wiring, mechanical and electrical
servicing infrastructures are
provided. raised floors and
suspended ceiling systems are
generally standard in a small
number of new buildings. All
•
works, decorations, installation,
additions, and furnishings that
the tenant may undertake on the
premises during the lease shall,
at the end of the lease or at the
end of renewal, belong to the
landlord, unless the latter should
demand the return of the
premises to their original state.
Movable furniture (desks, chairs)
may be removed by the tenant.
Use of Space: Companies occupy
office space usually as cellular
offices mixed with open spaces.
Holidays
there are 5 official national
holidays and two religious
holidays. school holidays consist
of two weeks in January or
February, and the period from the
beginning of June to the middle of
september.
tuRkEY
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
Turkey
Country Statistics
population (thousands) 46,607
surface area (km²) 603,628
density (per km²) 77.2
Local currency Hryvnia
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 283 304 313 281
GDP AnnUAl % 7.4 7.7 2.7 -10.0
net Direct foreiGn inveStment (US$ millionS) 5,737 9,218 12,765 5,750
lAboUr force (millionS) 21.5 21.6 21.6 21.5
UnemPloyment rAte % 2.7 2.3 3.0 4.5
inflAtion rAte AnnUAl % 9.1 12.8 25.2 16.5
AverAGe reAl WAGeS AnnUAl % 18.5 15.0 6.8 -9.1
GDP Per heAD ($ At PPP) 6,280 6,980 7,370 6,700
lenDinG intereSt rAte 15.2 13.9 17.5 17.3
exchAnGe rAte to US$ 5.0500 5.0500 5.2672 8.2167
Major Cities
City Core population
Kiev 2,589,541
Kharkov 1,494,235
dnipropetrovsk 1,108,682
donetsk 1,050,369
odessa 1,002,246
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1�0
ukRAinEKiev
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Ukraine
Political Structure
ukraine is a parliamentary republic with a president
as head of state. the president is elected by popular
vote to serve a five-year term. the unicameral
ukrainian parliament is the supreme Council
(Verkhovna rada).
Legal Structure
ukraine’s legal system is based on civil law. the
court system of ukraine has four levels and begins
with the courts of general jurisdiction that include
local courts and regional courts, regional appeal
courts, specialized high courts (the High Arbitration
Court and High Administration Court), and a supreme
Court for final appeal.
Hours of Business
the main business hours are Monday to Friday
09:00am – 18.00pm.
Visas
Holders of an eeA (eu Member states iceland,
Liechtenstein and norway) or swiss passport do not
require a visa. nationals from eu-countries (except
republic of Bulgaria and romania), as well as
switzerland and Liechtenstein may also enter
without a visa. Citizens of the united states of
America do not require a visa for entry. A residence
permit is required if intending to stay for a period
exceeding 3 months. ukraine is not a member of the
schengen area agreement.
Transport
the main international airport is Boryspil
international Airport (http://airport-boryspil.kiev.ua),
located 29 kilometres east of Kiev. it is connected to
the city by bus and metro. Within Kiev itself, most
public transportation is run by the state. the Metro
(www.metro.kiev.ua) [ukrainian only] is run by the
city municipal company Kyivsky Metropoliten. the
other methods of public transport, buses,
trolleybuses, trams are operated by the
Kyivpastrans. taxis are also an important means of
transportation in Kiev. other cities with metros
include Kharkiv and dnipropetrovsk.
there are some suburban train links in Kiev run
by the state train company, ukrzaliznytsia
(www.uz.gov.ua) [ukrainian only]. the ukrainian rail
network links the major cities of the country with
express links between Kiev and Kharkiv,
dnipropetrovsk and Lviv. there is also an express
train to Moscow.
International Dialling Code
the country code is + 380
Coordinated universal time (utC) + 2 hours
eastern standard time + 7 hours
Invest in Bureau
Further information can be obtained from the invest
ukraine bureau:
www.investukraine.org
bnp pARibAS REAl EStAtE 1�1
ukRAinE
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Ukraine
Typical Lease Terms
Legislation: the law that governs
leases is based on the ukraine
Civil Code.
Lease Length: 3-5 years were
typical in ukraine in 2008. recent
years had seen an increase in
lease duration but the liquidity
crisis has changed this so that
tenants now prefer short-term
agreements of less than 3 years.
Rent Escalation/Rent Review:
the terms and type of indexation
are usually negotiable. the most
common indexation is 3 to 5% per
annum. in international projects,
the rent is adjusted annually
based on one of european or
American indices, but tenants try
to avoid the item in the
agreement.
Guarantee and Security Deposit:
usually a deposit of 3 months
net rent is paid when the lease
is signed. Current financial
problems mean that tenants pay
for a deposit of 1 month or don’t
pay at all.
Rights of Renewal: the length
and terms of options are subject
to negotiation.
Break Options and Terminations:
Landlords may terminate the
lease if there is non payment of
rent for three months.
Tenant and Landlord Obligations:
tenants are obliged to deal with
internal repairs whilst the
landlord is obligated to handle
main structural repairs.
Subletting: the tenant is not
permitted to sublet the premises
without written consent from the
landlord. unless otherwise
specified in a lease agreement,
tenants are able to charge higher
rents to subtenants then what
they pay to the landlord.
Legal Environment Concerning
Brokerage Law
Agents are required to have
specific qualification for carrying
out property valuation. other real
estate agent activities needn’t any
licenses.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in us
dollars per square metre per
month or euros per square metre
per month and are paid monthly
in advance. Quoting rents are
often given in hryvnias.
Service Charge: service charges
are quoted in us dollars per
square metre per month or euros
per square metre per month and
are paid quarterly in advance.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – up to 8% of annual
rent net of VAt
Freehold – 4-5% of the
purchase price
subletting – the same as
leasing
Value Added Tax: the current VAt
rate in ukraine is 20% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs and property
transfer tax.
•
•
•
ukRAinE
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Ukraine
General Market Practices
Basis of Measurement: BoMA
standards are being increasingly
used by the landlords of
professional office buildings.
Fit Out/Reinstatement/
Dilapidations: new office spaces
are usually partially finished open
space (sometimes including
suspended ceiling with lighting
and carpeting on the floor). Air
conditioning is generally the
responsibility of the landlord. All
works, decorations, installation,
additions, and furnishings which
the tenant may undertake on the
premises during the lease shall,
at the end of the lease or at the
end of renewal, belong to the
landlord.
Use of Space: Companies occupy
office space usually as cellular
offices mixed with open spaces.
the trend is that open spaces
become more attractive for
tenants. Cellular offices are
mainly occupied when small
spaces are required.
Holidays
there are certain times of the
year when the speed of
transactions are significantly
reduced due to holidays. in
ukraine there are a number of
public holidays from the
beginning to the middle of January
and also in early May. Besides, the
period from July until the end of
August is a peak holiday period.
Acknowledgement
We would like to thank elena
Galanova of AsterA Group for
assistance in the preparation of
this country review.
ukRAinE
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
United Kingdom
Ukraine
Country Statistics
population (thousands) 60,587
surface area (km²) 245,000
density (per km²) 247
Local currency pound sterling
Economic Indicators
2006 2007 2008 2009
GDP (PPP US$ billionS 2005 PriceS) 1,985 2,045 2,059 1,977
GDP AnnUAl % 2.8 3.0 0.7 -4.0
net Direct foreiGn inveStment (US$ millionS) 56,570 -44,140 -9,363 -19,045
lAboUr force (millionS) 30.7 30.9 31.2 31.2
UnemPloyment rAte % 5.4 5.3 5.6 8.1
inflAtion rAte AnnUAl % 2.3 2.3 3.6 1.5
AverAGe reAl WAGeS AnnUAl % 1.7 1.5 0.1 -0.1
GDP Per heAD ($ At PPP) 33,809 35,028 35,787 34,290
lenDinG intereSt rAte 5.0 5.5 2.0 0.5
exchAnGe rAte to US$ 0.5426 0.4996 0.5399 0.6550
Major Cities
City Core population
London 7,074,265
Birmingham 1,020,589
Leeds 726,939
Glasgow 616,430
Manchester 430,818
sources: economist intelligence unit, oeCd, eurostat, un statistics division
bnp pARibAS REAl EStAtE 1��
unitEd kingdoM
London
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Political Structure
the united Kingdom is a parliamentary monarchy.
the monarchy is head of state but executive power
lies with the elected government. the united
Kingdom is a combination of 4 countries – england,
Wales and scotland (Great Britain) and northern
ireland. the uK parliament in London legislates for
the entire country on most issues, but scotland,
Wales and northern ireland now have some
governing powers over local policies like education
and health.
the uK parliament is bicameral and consists of a
lower chamber, the House of Commons that enact
legislation and an upper chamber, the House of
Lords, that reviews legislation.
Legal Structure
the united Kingdom’s legal system is based on
common law tradition with some civil law influences
(in scotland). there is no single governing law in the
uK because it is a composite state. separate legal
systems exist for scotland, northern ireland and,
england and Wales. in england and Wales the court
system hierarchy begins with the subordinate courts
consisting of magistrate and county courts for low
level civil and criminal cases. the second tier of
courts is collectively known as the supreme Court.
these consist of crown court, high court of justice
(civil and criminal appellate) and court of appeal.
the Appellate Committee of the House of Lords is the
highest court of appeal.
Hours of Business
the main business hours are Monday to Friday
09:00am – 17:30pm.
Visas
the uK is not a member of the schengen area
agreement. Holders of an eeA (eu Member states,
iceland, Liechtenstein and norway) passport do not
require a visa. nationals from Liechtenstein and the
united states of America do not require a visa for
entry. A residence permit is required if intending to
stay for a period exceeding 3 months.
Transport
the key international airports for London are
Heathrow (www.heathrowairport.com), the largest
international airport hub in europe, located 24
kilometres to the west of central London; Gatwick
(www.gatwickairport.com) located 45 kilometres to
the south and stansted located 48 kilometres to the
north. All are connected by high speed and
conventional train links to London.
London has an extensive underground metro system,
suburban rail and bus network that is mostly
operated under the direction of the transport
authority, transport for London (www.tfl.gov.uk).
uK cities are connected by rail network and the
larger cities have suburban rail connections.
Most of the transport is operated by private
companies. national travel information can be
obtained from transport direct
(www.transportdirect.info) or travelline
(www.traveline.org.uk).
International Dialling Code
the country code is + 44
Coordinated universal time (utC) +0 Hours
eastern standard time + 5 hours
Invest in Bureau
Further information can be obtained from uK trade
and investment bureau:
www.ukinvest.gov.uk
bnp pARibAS REAl EStAtE 1��
unitEd kingdoM
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
Typical Lease Terms
Legislation: the law that governs
leases is the Landlord and tenant
Act 1954 together with various
ancillary legislation.
Lease Length: 15 year or 10 year
leases are typical in england,
although 25 year leases that were
common until the early 90’s still
exist.
Rent Escalation/Rent Review:
rent will be subject to upward
only review. this is usually every
5 years but can be other patterns,
for example every 3 years, by
agreement. the new rent will be
agreed between the parties. if
agreement cannot be reached,
an arbitrator or independent
expert will be appointed to set
the new rent.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
either a deposit of 3 months rent
or a bank guarantee are
necessary to complete the lease.
Right of Renewal: Generally,
tenants have security of tenure by
law on expiry of the lease and can
apply for a new lease on similar
terms. Both parties can agree to
contract out of this protection.
Break Options and Terminations:
options are negotiable depending
on the quality of the space. prime
new space will often only be
available on a 15 year lease
although a break at the 10th year
may be offered. in other instances
breaks at 5 year intervals can be
negotiated, but these may be
subject to payment of penalties.
Tenant and Landlord Obligations:
When the building is entirely
occupied by one tenant, the tenant
will take on full repairing and
insuring obligations for the interior
and exterior of the building. in
multiple occupation buildings, the
tenant’s obligations are internal
repair, maintenance and insurance
while landlord’s obligations are
external repairs, maintenance and
insurance. the landlord will
charge these costs to the tenant
through a service charge.
Subletting: Generally subletting
is allowed with the written
consent of the landlord and
according to the detailed terms of
the lease. the tenant is normally
required to sublet at full market
rent even if this is higher than the
rent the tenant pays. tenants may
be prevented from subletting
below the rent payable and such
clauses should be avoided when
signing new leases. tenants may
also assign or sell their lease to
another tenant. in this situation it
is important to avoid “privity of
Contract” where there is ongoing
obligation for payment of costs
should the purchaser of the lease
enter into liquidation.
unitEd kingdoM
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
unitEd kingdoMLegal Environment Concerning
Brokerage Law
Commercial agents do not need to
be registered to practice in the uK
although most are members of the
riCs (royal institution of Chartered
surveyors). Brokerage in the uK is
governed by the estate Agency Act
1979 and the property
Misdescriptions Act 1991.
Brokers are normally appointed
by both sides (landlord and
tenant) in a transaction and each
side will pay their broker who will
generally act in an advisory
capacity. Fees will only be payable
by prior agreement and are only
enforceable by contract.
it is considered to be a conflict of
interest if the same broker
represents both the landlord and
the tenant. riCs regulations
require that both parties must be
notified if a conflict exists.
Occupancy Costs
the following charges are payable
by the tenant:
Rents: rents are quoted in pounds
sterling per square foot per
annum and per square metre per
annum, and are paid quarterly in
advance. Quarter days are
different between england/Wales
and scotland.
england/Wales
25 March – Lady day
29 september – Michaelmas day
24 June – Midsummer day
25 december – Christmas day
scotland
2 February – Candlemas day
1 August – Lammas day
15 May – Whit-sunday
11 november – Martinmas day
new scottish Quarter
28 February
28 August
28 May
28 november
Service Charge: Building service
charges are quoted in pounds
sterling per square foot per
annum and per square metre per
annum, and are paid quarterly in
advance with the rent.
Local Property Tax (Non-
Domestic Business Rates): these
taxes are assessed on a
percentage of the notional rental
value of the space and paid
directly by the tenant on a
monthly basis. they can equal up
to 40% of the overall rental
obligation.
Acquisition Costs
typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
Leasing – Fees are usually 10%
of the first year’s net rent. For
larger or higher value
instructions this percentage
can be reduced as
appropriate.
Freehold – Fees are typically
based on 1% of the purchase
price. the percentage may be
increased for small properties
or reduced for larger
instructions as appropriate.
subletting – same as leasing.
Property Transfer Tax (Stamp
Duty Land Tax): For the purchase
of a property, the purchaser is
responsible for paying a property
transfer tax of 4%, which is based
upon the purchase price of the
property. For a lease, the tenant is
responsible for paying a tax of 1%
of the value of the lease over the
full term of the lease. Leases with
a value of less than £150,000 are
not required to pay this tax.
•
•
•
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
unitEd kingdoMValue Added Tax: the current VAt
rate in the uK is 17.5% (reduced to
15% until november 2009) and is
payable on rent, building service
charge, agents fees and legal
costs. it can be possible to elect to
not charge VAt on rent. this will
vary from property to property
and will depend on the legal
status of the landlord.
General Market Practices
Basis of Measurement: the riCs
Code of Measuring practice
governs the measurement of
buildings in the uK. this
document defines what should
and should not be included.
office Accommodation –
Measured on a net internal
Area (niA). Very simply, this is
the “carpet area” and
excludes ancillary area such
as toilets, staircases,
elevators, plant areas and
parking spaces.
industrial Accommodation –
Measured on a Gross internal
Area (GiA). this includes
everything within the external
walls of the building.
•
•
Fit Out/Reinstatement/
Dilapidations: the landlord
generally finishes new office
developments to a ‘Cat A’
standard. Cat A will generally
include raised floors with floor
boxes, comfort cooling or air
conditioning, carpeting, ceilings
and lighting in place. the tenant’s
fit out is known as finishing the
building to ‘Cat B’. this will
include the provision of internal
partitioning, cabling, security and
facilities such as reception areas,
post rooms, kitchens plus an
upgrading of the air conditioning.
When vacating premises, the
tenant is responsible for
reinstating the space to the
condition it was at the start of the
lease (known as “dilapidations”),
subject to fair wear and tear. the
tenant will have to remove all
improvements made to the
property and reinstate to the Cat
A condition. if the tenants choose
not to do this work themselves, a
dilapidations estimate can be
agreed between building
surveyors acting for both sides.
this will be the amount to be paid
by the tenant in lieu of the
reinstatement works.
Use of Space: Companies typically
occupy office space either as
cellular offices for one or two
people but most often as open
plan space with a small number
of executive offices and meeting
rooms.
Holidays
the only period in the year when
holidays will affect the speed of
projects will be the Christmas
period from mid december to
early January. August is also a
holiday period but offices remain
open and operational during this
time. there are also a number of
public holidays that fall on
Monday; two are in May, one in
August and the Friday and
Monday at easter.
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
CoMpARiSon oF lEASE tERMS And ConditionScoUntry rent
cUrrencytyPicAl leASe lenGth (yeArS)
rent PAyAble (in ADvAnce)
rent DePoSit StAtUtory riGht to reneW
bASiS of rent increASeS
freqUency of rent increASeS
AUStriA Euro 3 to 7 but may be unlimited
Monthly 3 month’s gross or bank guarantee
None Consumer price index Annual or when index reaches 5%
belGiUm Euro 9 Quarterly Bank guarantee None “Health Index” gezondheidsindex/indice santé
Annual
bUlGAriA Euro / Leva Up to 10 max
Monthly 1 to 3 month’s gross
None Bulgarian Harmonized Consumer price index or EU Consumer price index
Annual
cyPrUS Euro 2 to 5 Monthly 1 month net or bank guarantee
Statutory after 2 years of occupancy
czech rePUblic
Euro / US Dollar
5 Monthly/Quarterly
3 month’s net or bank guarantee
None EU consumer price index
Annual
DenmArk Danish Kroner
Indefinite Quarterly Bank guarantee None Consumer price index Annual or by preset amount
eStoniA Estonian Kroon
3 to 5 Monthly 3 to 6 months or bank guarantee
None Consumer price index Annual
finlAnD Euro 3 to 5 Quarterly 3 to 6 months or bank guarantee
None Consumer price index Annual
frAnce Euro 3, 6 or 9 Quarterly 3 month’s net or bank guarantee
None Construction costs index (INSEE index)
Annual
GermAny Euro 5 or 10 Monthly 3 month’s gross or bank guarantee
None Consumer price index or compounded annually
Annual
Greece Euro 12 Monthly 2-3 month’s gross None Cost of living index Annual
hUnGAry Euro / US Dollar
3 to 5 Monthly/Quarterly
3-4 month’s net or bank guarantee
None Hungarian service price index or EU consumer price index
Annual or when index exceeds 2-3%
irelAnD Euro 20 to 25 Quarterly 3 months or bank guarantee
Statutory after 5 years of occupancy
Open market letting evidence and rent review
5 years
itAly Euro 6 Quarterly 3 or 6 months or bank guarantee
Statutory for a further 6 years
ISTAT cost of living index
Annual
lAtviA Latvian Lat 3 to 5 Monthly 3 – 6 months or bank guarantee
None Consumer price index Annual
lithUAniA Lithuanian Lita
3 to 5 Monthly 3 – 6 months or bank guarantee
None Consumer price index Annual
lUxemboUrG Euro 3, 6 or 9 Monthly/Quarterly
Bank guarantee or 3 or 6 months
None STATEC cost of living index
Annual
netherlAnDS Euro 5 Monthly/Quarterly/Biannual
Bank guarantee equal to 3 months
Automatic after expiration of ROZ contracts
Dutch consumer price index
Annual
norWAy Norwegian Krone
Indefinite but 5 and 10 years are common
Quarterly 3 – 6 month’s gross None Consumer price index Annual
PolAnD Euro / Polish Zloty
3, 5 or 10 Monthly Bank guarantee of 2-3 month’s gross
None EU consumer price index or Polish inflation index
Annual
PortUGAl Euro 5 Monthly 2 month’s net plus bank guarantee
None Portuguese inflation index
Annual
bnp pARibAS REAl EStAtE 1��
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
coUntry rent cUrrency
tyPicAl leASe lenGth (yeArS)
rent PAyAble (in ADvAnce)
rent DePoSit StAtUtory riGht to reneW
bASiS of rent increASeS
freqUency of rent increASeS
romAniA Euro/Romanian New Lei
5 Monthly/Quarterly
Bank guarantee equal to 3 months
None EU consumer price index
Annual
rUSSiA Ruble / Euro / US Dollar
3 to 7 Monthly/Quarterly
3 months None Type of indexation is negotiable but usually minimum of 3%
Annual
SerbiA Euro / Dinar Maximum of 10 years but usually shorter
Monthly 2-3 month’s gross rent
None Serbian harmonized index of consumer prices (HICP)
Annual
SlovAkiA Euro Indefinite but 3 and 5 years are common
Monthly/Quarterly
3-4 months net or bank guarantee
None Slovak or EU consumer price index
Annual
SPAin Euro 5 Monthly 2 months net or bank guarantee
None Cost of living index Annual or by preset amount
SWeDen Swedish Kroner
3 to 5 Quarterly Bank guarantee Statutory. Landlord must provide reasons for not renewing
Consumer price index Annual
SWitzerlAnD Swiss Franc 5 Monthly/Quarterly
3-6 months or bank guarantee
None Federal or cantonal consumer price index
Annual
tUrkey Turkish Lira / US Dollar /Euro
5 Monthly/Quarterly
1-3 month’s or bank guarantee
Statutory for at least one period
Consumer price index. If rent is in US$, US consumer price index
Annual
UkrAine Euro / US Dollar / Ukrainian Hryvnia
3 to 5 Monthly 3 month’s net None Type of indexation is negotiable but usually minimum of 3%
Annual
UniteD kinGDom
Pound Sterling
10 or 15 Quarterly 3 month’s or bank guarantee
Statutory on expiry of the lease
Rental review based on market evidence
5 years
Landlord and tenant obligations are generally similar for most countries. in France Belgium and portugal,
insurance is paid by the landlord and invoiced to the tenant.
bnp pARibAS REAl EStAtE 1�0
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
CoMpARiSon oF tRAnSACtion CoStScoUntry leASinG freeholD SUblettinG ProPerty trAnSfer
tAxvAt other tAxeS/coStS
AUStriA 2-3 times gross monthly rent
1.5-3% of the purchase price
2-3 times gross monthly rent
Grunderwerbsteuer 3% Grundbucheintrag- ungsgebühr 1%
20%
belGiUm 15% of the first year’s gross rent
1-3% of the agreed purchase price
15% of the first year’s gross rent or savings
Regional registration between 10% to 12.5%
21%
bUlGAriA Half to 1 month’s net rent
2.5-3% of agreed purchase price depending on agent and location
Half to 1 month’s net rent
1.3% to 2.6% of the purchase price or the tax assessment value of the property whichever is higher. For Sofia the tax is 2.5%
20% Notary fee is paid based on the purchase price up to BGL 6000.
Registration fee of 0.1% of purchase price. Legal fee of BGL 700 for first BGL 100,000 of purchase price
cyPrUS 1 month net rent for a 2 year lease, a percentage of annual rent for longer leases
3% of purchase price
1 month’s net rent for a 2 year lease, a percentage of annual rent for longer leases
3-8% on the purchase price
15%
czech rePUblic
2 month’s net rent
1.5–2.5% of purchase price
2 month’s net rent 5% of purchase price 22%
DenmArk 15 % of the first year’s annual net rent
1 – 3% of purchase price
15 % of the first year’s annual net rent
0.6% of purchase price 25%
eStoniA 10–15% of the first year’s gross annual rent
1–4% of purchase price.
10–15% of the first year’s gross annual rent
No property transfer tax 18%
finlAnD 15-20% of the first year’s gross annual rent
1-4% of the purchase price
15-20% of the first year’s gross annual rent. Sometimes higher.
4% of purchase price 22%
frAnce 30% of the first year’s net rent
3-5% of purchase price
10-20% of annual net rent or percentage of savings made through early surrender
4.8 – 5% of purchase price
19.6% Notary fee of 0.825% if over 16,770 Euros. All taxes and costs are 6.5-7%
GermAny 3-4 month’s gross rent for leases over 5 years. 2.5-3.5 month’s rent for leases under 5 years
3-5% of purchase price
2.5 to 4 month’s gross rent
3.5 – 4.5 % of purchase price
19% Notary fee of 1% of the purchase price
Greece 1 month’s net rent or 10-12% of annual rent
1-3% of purchase price
1 month’s net rent or 10-12% of annual rent
9-11% for properties with approval pre 2006. Post 2006 VAT is applicable
19% Notary fee of 1.2 % of the purchase price. Legal fees of 1.2 – 1.5% of the purchase price
hUnGAry 2 month’s net rent
1.5–2.5% of purchase price
2 month’s net rent 10% of purchase price 20% Legal and notary costs of 0.5-1% of the purchase price
irelAnD 10% – 15% of the first year’s rent
1.5% of purchase price
10% – 15% of the first year’s rent
6% of purchase price 21.5%
itAly 10-12% of the net annual rent
1-2% of sale price 10-12% of the net annual rent or percentage of savings made
VAT (can be reclaimed) 20% Registration tax at a fixed amount of EUR 168; 1% cadastral tax; 3% mortgage tax
bnp pARibAS REAl EStAtE 1�1
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom
coUntry leASinG freeholD SUblettinG ProPerty trAnSfer tAx
vAt other tAxeS/coStS
lAtviA 10–15% of the first year’s gross annual rent
1–4% of purchase price
10–15% of the first year’s gross annual rent
2% of market value of the property to a set maximum of 30,000 LVL
18%
lithUAniA 10–15% of the first year’s gross annual rent
1–4% of purchase price
10–15% of the first year’s gross annual rent
No property transfer tax 18%
lUxemboUrG Between 1 month rent to 15% of the first year’s net rent
1–3% of sale price Between 1 month rent to 15% of the first year’s net rent or percentage of savings made
Between 7.5–10.5% depending on city (recoverable if property sold within 6 months)
15%
netherlAnDS 12 -20% of the first year’s net rent
1.5- 2% of the sale price
12 -16% of the first year’s net rent or percentage of savings made
Overdrachtsbelasting (transfer tax) is 6% (recoverable if property sold within 6 months)
19%
norWAy 15% of the first year’s net annual rent
0.5% – 2.5% depending on size of property
15% of the first year’s net annual rent but sublease fee may be increased
2.5% of purchase price 25% Fixed price of NK 1,850 is payable on all mortgages
PolAnD 1 to 3 month’s rent
1-2.9% of purchase price
1 to 3 month’s rent 2% of purchase price 22%
PortUGAl Between 1 month net rent and 10% of the first year’s net rent
3-5% of purchase price
Between 1 month net rent and 10% of the first year’s net rent
A property transfer tax (“IMT”) of 6%, and the Stamp Tax of 0.8% both based on purchase price
20% Purchaser will be responsible for notary fees.
romAniA 10-12% of the first year’s net rent
1–3% of purchase price
10-12% of the first year’s net rent
1-3% of purchase price 19%
rUSSiA 10% of lease rate 6% of purchase price
10% of lease rate State duty of 7,500 rubles for a legal body and 500 rubles for an individual
18%
SerbiA 1 month’s net rent
2-3% of purchase price depending on size of property
1 month’s net rent 2.5% of purchase price 18% Notary fee is paid, determined on a scale based on the purchase price.
SlovAkiA 14-15% of one year’s rent
1.5 to 3% of purchase price
14-15% of one year’s rent
VAT 19%
SPAin 8-12% of the first year’s net annual rent
0.5-3% of purchase price
15% of the net annual rent
VAT 16% Notary fee of 0.5-1% of the purchase price.
SWeDen 10%-20% of the first years’ net annual rent
2-3% of purchase price
10%-20% of the first year’s net annual rent or percentage of savings made
3% of purchase price 25% If purchasers require a mortgage deed, a 2% fee is required based on value of the deed
SWitzerlAnD 10-15% of the first year’s net rent
3-5% of the agreed purchase price
10-15% of the first year’s net rent
Transfer Tax is between 1–3% and Registration Fee is roughly 0.1%
7.6% Variable registration cost, land transfer taxes, notary fees depending on canton.
tUrkey 8–10% of the first year’s gross rent
1.5–2% of purchase price
8–10% of the first year’s gross rent
1.5% of purchase price 18%
UkrAine 8% of annual rent
4-5% of the purchase price
8% of annual rent 20%
UniteD kinGDom
10% of the first year’s net rent
1% of purchase price
10% of the first year’s net rent
4% of purchase price and 1% on lease value (only on leases over £150,000)
17.5%
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Tim HarlowSenior Director – Client SolutionsTel: +44 (0) 20 7338 4155 Mobile: +44 (0) 7747 758 289e-mail: [email protected]
Elizabeth WheelerSenior Surveyor – Client SolutionsTel: +44 (0) 20 7338 4491 Mobile: +44 (0) 7825 114 778e-mail: [email protected]
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