Documente Academic
Documente Profesional
Documente Cultură
Belgium
Bulgaria
Introduction Cyprus
Czech Republic
This handbook has been assembled by the BNP Paribas Real Estate’s
Large Corporate Coverage Team and the International Research Denmark
Team to provide you with a guide to occupying or investing in real
estate in Europe. Estonia
Finland
Even with the creation of the European Union, a myriad of different
languages, cultures and real estate practices exist today. Knowledge of
France
these differences is paramount for planning a successful real estate
strategy. Consideration of how local markets work is equally important
Germany
to successful implementation. This publication identifies the main
differences in each major European market and will help you establish Greece
boundaries at the outset of a project.
Hungary
For each of the countries reviewed in the handbook we provide an
overview on what occupiers and prospective inward investors are likely Ireland
to expect for:
Italy
BNP Paribas Real Estate operates more than 60 offices across Europe. Netherlands
We are a European company and experts in our market place. Our goal
Norway
is to provide our clients with the best local knowledge with the benefit
of an international perspective. If you have any comments or questions
Poland
about this handbook, or BNP Paribas Real Estate, please contact us.
Portugal
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
Contents Cyprus
Czech Republic
Austria.............................................................. 4 Norway..........................................................89
Belgium............................................................ 9 Poland............................................................93 Denmark
Bulgaria.........................................................14 Portugal.........................................................98
Estonia
Cyprus............................................................20 Romania...................................................... 103
Czech Republic.............................................24 Russia.......................................................... 108
Finland
Denmark........................................................29 Serbia.......................................................... 112
Estonia...........................................................34 Slovakia.......................................................116 France
Finland...........................................................38 Spain........................................................... 120
France............................................................42 Sweden....................................................... 125 Germany
Germany........................................................47 Switzerland............................................... 130
Greece............................................................53 Turkey......................................................... 135 Greece
Lithuania
Luxembourg
Netherlands
Norway
Poland
Finland
Sweden
Portugal
Norway
Russia
Estonia Romania
Latvia
Turkey
Cyprus
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
Vienna
austria Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 8,282
Surface area (km²) 84,000
Germany
Density (per km²) 99
Local currency Euro Greece
Net direct foreign investment (US$ millions) -3,049 -736 -6,503 -6,356
Labour Force (millions) 3.5 3.6 3.6 3.6 Latvia
Norway
Major Cities
Poland
City Core Population
Vienna 1,539,848 Portugal
Salzburg 143,973
Innsbruck 118,112 Romania
Graz 237,810
Linz 203,044 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
austria Cyprus
Czech Republic
Political Transport
Austria is a democratic federal republic of nine state The main international airport is Wien-Schwechat Denmark
governments and a ceremonial president as head of (www.viennaairport.com) in Vienna with other
state. The Austrian Parliament, Bundesversammlung, international airports are in Graz, Innsbruck, Estonia
is bicameral and consists of the Federal Council (the Klagenfurt, Linz and Salzburg.
Finland
Bundesrat) and the National Council. The president
is elected for a six-year term. Austria has an extensive public transport network of
France
trains, trams and buses. Travel details can be
Legal Structure obtained from the national rail network, ÖBB
Germany
The legal structure is a civil law system. The highest Austrian Federal Railways (www.oebb.at).
courts in Austria are the Constitutional Courts. The Greece
Administrative Court handles bureaucratic disputes International Dialling code
and the Supreme Court deals with civil and criminal The country code is + 43 Hungary
cases.
Greenwich Mean Time +1 hour Ireland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
AUSTRIA Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The law that governs Landlords usually require Normally the landlord is Denmark
leases is based on the Rent Act information from prospective responsible for building
(“Mietrechtsgesetz (MRG)”). tenants such as a credit rating. maintenance, structural repairs, Estonia
3 and 7 year leases are typical in rent will typically continue for the accept the subtenant, but in
Italy
Austria. In cases of “Unbefristet” new lease. practice if the subtenant’s
leases, the tenant will agree a covenant is good, then the sublet
Latvia
“Kundigungsverzicht” which is a Break Options and Terminations: will generally be accepted.
fixed period of time in which the In “Unbefristet” leases the tenant Lithuania
tenant is bound to the lease. has full security of tenure. The
landlord cannot terminate the Luxembourg
Rent Escalation/Rent Review: lease except in cases of the tenant
Rent in Austrian leases is linked to being in breach of the lease. Break Netherlands
the consumer price index, and will options are negotiable or some
Norway
be increased either annually or lease agreements allow for the
whenever the index has increased premature exit of a lease under
Poland
by, for example, more than 5%. the condition of a penalty. In most
Rent increases can sometimes be cases the penalty for early lease Portugal
pre determined in leases. Rent termination is subject to
reviews are uncommon, but are negotiation and depends on Romania
being increasingly used in modern current market conditions.
office buildings with leases of 10 Russia
years or more.
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
AUSTRIA Cyprus
Czech Republic
Legal Environment Concerning agent 50% of the fee he receives • Freehold – Fees are paid by
Brokerage Law from his client. This can cause a the seller and are negotiable Denmark
Austrian brokerage law is problem in cases of tenant but are typically 1.5–3% of the
governed by the Innung and representation instructions purchase price. Estonia
Maklergesetz which states that as the client may be required to • Subletting – Same as leasing
Finland
companies where agents are pay a brokerage fee to the above.
working must have a property landlord’s agent.
France
licence. An agent must prove Property Transfer Tax (Stamp
“Verdienstlichkeit” in order to Occupancy Costs Duty) (Grunderwerbsteuer):
Germany
receive a fee. In order to fulfil The following charges are payable For the purchase of a property,
“Verdienstlichkeit” the agent must by the tenant: the purchaser will be responsible Greece
have at least made a written offer for paying a property transfer
and inspected the property with Rents: Rents are quoted in Euros tax of 3.5%, which is based Hungary
the tenant. Sometimes this per square metre per month and on the purchase price of the
requirement becomes an issue if are paid monthly in advance. property plus VAT. Also the Ireland
real estate department of the tenant through the service all forms of transactions including
Norway
tenant must notify local charge. rent, building service charge,
management not to go to market. agents’ fees, notary costs, finance
Poland
If a tenant has received offers but Acquisition Costs tax and property transfer tax.
has not viewed the property, they Typical acquisition costs that a Portugal
can release their obligations to company will have to pay when General Market Practices
pay a fee if they send back the buying or leasing new premises Basis of Measurement: There are Romania
offers to the agent and formally include: two standard measuring
reject them. practices: Russia
Agents Fees
Where another agent represents • Leasing – Fees are usually 3 Net Base Area or NGF (Netto
Serbia
the landlord, it is usual for the times the gross monthly rent Geschossfläche). This is the most
Slovakia
total fee received from the (including parking) for a lease commonly used area calculation
landlord and the tenant to be agreement of more than 3 and is used for calculating the Spain
split 50:50 between the two years. For leases between 2 – rent. NGF includes main usable
agents. In some cases there is no 3 years the fee is reduced to 2 space, ancillary space such as Sweden
landlord fee and the agent months’ gross rent and for toilets, kitchens, separating walls,
representing the tenant must less than 2 years the fee is and circulation space. Areas used Switzerland
be prepared to give the landlord‘s reduced to 1 month gross for technical use, structural walls
Turkey
rent. and elevators are excluded.
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
AUSTRIA Cyprus
Czech Republic
Gross Base Area or BGF (Brutto Use of Space: Cellular and open
Geschossfläche). This area is plan space are both common. Denmark
measured from internal wall to The use and density of space must
internal wall and includes all the be in accordance with the Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
Belgium Brussels
Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 10,542
Surface area (km²) 31,000
Germany
Density (per km²) 346
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Brussels (Bruxelles) 960,324 Portugal
Antwerp 467,875
Ghent 230,446 Romania
Charleroi 206,928
Liège 195,201 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate
United Kingdom
Austria
Belgium
Bulgaria
belgium Cyprus
Czech Republic
Political Transport
Belgium is a federal parliamentary democracy with a The main international airport is Brussels Denmark
hereditary constitutional monarchy as head of state. International Airport (www.brusselsairport.be) in
Belgium is split into three administrative regions: Zaventem with other regional airports in Brussels Estonia
Flanders, Wallonia and Brussels that have a large South, Antwerp, Liege and Ostend.
Finland
degree of autonomy over their own affairs. The
federal government is responsible for defence, Belgium is a railway hub for Europe having a
France
foreign affairs, justice and the national budget.The terminal for the Eurostar service (www.eurotunnel.
parliament is bicameral and consists of a Senate and com) to France and the UK plus links to other
Germany
Chamber of Deputies. European rail networks. Travel details can be
obtained from the national rail network, SNCB/ Greece
Legal NMBS (www.b-rail.be).
Belgium’s legal system is based on civil law system Hungary
but is influenced by English constitutional theory. Bus and tram information can be obtained for
There are 5 levels of justice: Canton (225 courts), Brussels from MIVB/STIB (www.brussels.irisnet.be), Ireland
district (27 courts), provinces and Brussels for Wallonia from TEC (www.tec-wl.be) and for
Italy
(11 courts), courts of appeal (5 courts), and the Flanders from De Lijn (www.delijn.be)
Supreme Court of Justice which is the highest court
Latvia
in Belgium and deals mainly with appeals. International Dialling code
The country code is + 32. Lithuania
Hours of business
The main business hours are Monday to Friday Coordinated Universal Time (UTC) + 1 hour Luxembourg
08:30am – 18:00pm Eastern Standard Time + 6 hours
Netherlands
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 10
United Kingdom
Austria
Belgium
Bulgaria
Belgium Cyprus
Czech Republic
Typical Lease Terms Rent Escalation/Rent Review: Tenant and Landlord Obligations:
Legislation: Leases are governed Rent is adjusted annually based Under the Civil Code the landlord Denmark
by local Belgian Civil Code. Under on the “health” index is responsible for major repairs
the tax law, all lease contracts (gezondheidsindex/indice santé). and the replacement of major Estonia
have to be registered with the For pre-letting contracts “pre- installations such as HVAC and
Finland
Ministry of Finance within 4 indexation” is often used. lifts. The tenant is responsible for
months following the signature of small repairs and maintenance
France
the lease agreements. As a result Guarantee or Security Deposit: works. Among other things, the
three copies are normally signed, Landlords usually require tenant shall regularly maintain
Germany
one for each party and one for the information from prospective the interior and outside
administration. Failure to register tenants such as banking details or paintwork, sanitary equipment, Greece
means penalties can be claimed access to company information. covering, pavements, electrical
by the tax administration and, Normally it is stipulated in the devices, doors and windows and Hungary
any third party, such as a new lease that a rental guarantee their locks. Taxes and insurance
owner who has acquired the (usually through a bank guarantee are paid by the landlord and re- Ireland
building, will not be bound by or security deposit) is required. invoiced to the tenant.
Italy
the lease agreement. Both
landlord and tenant have a joint Rights of Renewal: On lease Subletting: The tenant may
Latvia
responsibility for registration expiry the tenant has no security assign or sublet the lease unless
of the lease. The lease contract of tenure. Typically it is stipulated forbidden by the terms of the Lithuania
has to be registered in one of the in the lease contract that there is lease. Nevertheless, most of lease
3 national languages (Flemish, no automatic renewal of the lease agreements mention that is not Luxembourg
French or German). after the expiry date. permitted to sublet or assign the
lease without written consent Netherlands
Lease Length: The standard term Break Options and Terminations: from the landlord.
Norway
for regular occupation of leased Many leases contain break
premises is 9 years, each party options, usually after 3 years
Poland
having the right to terminate the and/or 6 years, although this is
lease agreement at the end of only market convention. These Portugal
three-year period by giving six breaks may be for either or both
months notice. Leases can be parties. One party may not Romania
granted for longer or shorter terminate the lease prior to the
periods, although anything over break option without the prior Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 11
United Kingdom
Austria
Belgium
Bulgaria
Belgium Cyprus
Czech Republic
Legal Environment Concerning known. All private costs (such • Subletting – Fees are
Brokerage Law water and electricity supply) are negotiable and can be based Denmark
Individual real estate brokers directly charged to the tenant. on a percentage of the first
need to be registered with the year’s gross annual rent Estonia
Belgian Institute for Real Estate Local Property Tax (Onroerende (typically 15%) or on a
Finland
(BIV/IPI) to practice in Belgium. Voorheffing/Précompte percentage of the savings
Every company acting as broker Immobilier) and Regional Taxes: made through the early
France
should be legally represented by These taxes are paid by the surrender.
at least one managing director landlord on an annual basis and
Germany
listed with the Belgian Institute re-invoiced to the tenant. Property Transfer Tax
for Real Estate. (Registration Tax): The purchaser Greece
Other Taxes/Costs: In some cases of a property is responsible for
Real estate brokers are selected other taxes such as office tax, tax paying a registration tax in the Hungary
by either the landlord or the per workstation, or tax on energy region of acquisition. The
tenant and will sign an agreement can be levied. These are local registration tax is different for Ireland
to represent their client in a taxes and depend on the each region. In Flanders the
Italy
transaction. It is common practice municipality where the property registration tax is 10%. In some
in Belgium that real estate is located. circumstances, 60% of the
Latvia
brokers are appointed and paid registration costs may be
by landlord. It is considered a Acquisition Costs recovered if the property is sold Lithuania
conflict of interest if an agent Typical acquisition costs that a within 2 years of buying it. In
represents both the landlord company will have to pay when Wallonia and Brussels the Luxembourg
and the client, and the agent is buying or leasing new premises registration tax is 12.5%.
obligated to indicate if a conflict include: Developers often operate under Netherlands
advance. • Freehold – Fees are usually real estate through the purchase
Serbia
paid by the seller and are of company shares, which carries
Service Charge: Service charges negotiated on a case-by-case added advantages in that capital
Slovakia
are quoted in Euros per square basis depending on the gains on shares are generally tax
metre per annum and are paid purchase price. Fees are exempt for individuals as well as Spain
together with the rent quarterly usually between 1-3% of the companies. Another way to reduce
in advance, based on a provisional agreed purchase price. the registration tax is not to buy Sweden
amount, which is adjusted at least the real estate but rather opt for a
once a year once the actual cost is long term lease (for a duration of Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 12
United Kingdom
Austria
Belgium
Bulgaria
Belgium Cyprus
Czech Republic
minimum 27 years and maximum • UGEB-ULEB – For the upgrading of the office space is at
99 years) or for a right to build (of measurement of office a cost to the tenant. All works, Denmark
maximum 50 years) on the real buildings, the gross area is installations and additions that
estate. The granting of such rights used and a proportion of the the tenant may undertake on the Estonia
is subject to a registration tax rate common general area of the premises during the lease require
Finland
of 0.2% calculated on the total building (entrance hall, lobby prior approval from the landlord.
amount of the rents and charges area, elevators) is included. They shall at the end of the lease
France
for the duration of the contract. The gross area is measured or at the end of renewal period,
from the exterior of the belong to the landlord unless the
Germany
Value Added Tax: VAT in Belgium is windows and the axis of latter demands the return of the
currently at 21%. Rent payments separating walls. premises to their original state. Greece
are not subject to VAT. The renting • BACS – Uses two main Restoration to the original state is
of parking space where the tenant definitions, which are gross at the tenant’s cost. Hungary
has his main occupation elsewhere external area (GEA) and the
is considered as the provision of a gross area (GA). GEA is the Use of Space: Premises in Belgium Ireland
service rather than a letting and is area in the building measured is primarily cellular office
Italy
therefore in the VAT regime. The externally at each floor level. construction but open plan office
renting of warehouses where GEA is applied for the premises are increasingly favored.
Latvia
offices constitute less than 10 measurement of industrial
percent of the total space is also buildings and warehouses and Holidays Lithuania
subject to VAT. residential buildings. GA is the There are no times of the year in
area of the building measured which the speed of transactions Luxembourg
VAT is payable on acquisition from the midpoint of the are reduced due to holidays. In
of new building and construction windows to the midpoint of the period between Christmas Netherlands
for new commercial property the opposite wall for each and New Year some offices are
Norway
(lesser rates exist for residential) floor level. GA is applied for closed but generally firms will
as well as professional fees and the measurement of offices remain open all year round.
Poland
letting fees. On the acquisition of and is also the basis for
land no VAT is paid but measurement commonly used Portugal
registration tax is payable. for the calculation of the rent
and service charges. Romania
General Market Practices
Basis of Measurement: Two Fit Out/Reinstatement/ Russia
Turkey
Ukraine
BNP par i b as rea l estate 13
United Kingdom
Austria
Belgium
Bulgaria
Bulgaria Cyprus
Czech Republic
Sofia
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 7,699
Surface area (km²) 11,001.9
Germany
Density (per km²) 69.4
Local currency Leva Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Sofia 1,138,629 Portugal
Plovdiv 340,142
Varna 299,492 Romania
Burgas 195,098
Rousse (Ruse) 166,885 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 14
United Kingdom
Austria
Belgium
Bulgaria
bulgaria Cyprus
Czech Republic
Political Structure Transport
Bulgaria is a parliamentary republic with a directly Sofia airport (www.sofia-airport.bg) is the main Denmark
elected president as head of state who serves a international airport and located about nine
5 year term. The primary legislative body, the kilometres from the city centre. There are no direct Estonia
parliament, is unicameral and called the National rail services between Bulgaria and Western Europe
Finland
Assembly (Narodno Sobranie). but there are daily services to Belgrade, Bucharest
and Budapest, Istanbul and Thessalonika.
France
Legal Structure
Bulgaria’s civil and criminal law is based on Roman There is over 6,000 km of railways of generally good
Germany
civil law although the judiciary is independent and quality connecting all the main towns. Information
has equal status with the legislative and executive on travelling by rail in Bulgaria can be obtained from Greece
branches. The judicial system is managed by the the Bulgarian State Railways BDZ EAD website
Supreme Judicial Council and consists of regional (http://bdz.creato.biz) Hungary
courts, district courts, and the supreme courts of
cassation for civil and criminal appeals International Dialling Code Ireland
Labour Office.
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 15
United Kingdom
Austria
Belgium
Bulgaria
bulgaria Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: following the property transfer
Legislation: Leases are governed Generally a deposit of 1 to 3 date. If the lease contract is not Denmark
by the Bulgarian Law on months gross rent is payable registered or notary authenticated,
Obligations and Contracts/State upon the signing of the lease it is valid and binding on the new Estonia
Gazette issue No 275/1950/. There contract. owner for an indefinite term and
Finland
is no special law concerning can be terminated with one month
commercial leases. Rights of Renewal: Options to notice.
France
renew can be negotiated between
Lease Length: No minimum initial the two parties. Lease contracts Tenant and Landlord Obligations:
Germany
lease length is legally prescribed agreed for a definite term may be Tenant obligations are for internal
but the maximum lease length is automatically renewed for an repair and maintenance whilst Greece
10 years. If a longer term is indefinite period, if the tenant landlord obligations are for
negotiated in a contract, the continues to use the property external and structural repairs. Hungary
extension clause is legally after the end of the lease and There are no standards for
considered null and void with the there is no objection by the insurance clauses so most lease Ireland
law only recognising the first ten landlord. contracts do not deal with it. But
Italy
10 years. In practice negotiation of it is common, especially for big
10 years lease is difficult as most Break Options and Terminations: landlords with mostly office
Latvia
landlords do not feel secure and Break options and termination of space, to oblige the tenant to
prefer leasing for a shorter period. lease contracts for a definite term obtain full property insurance for Lithuania
have to be negotiated between the premise.
Rent Escalation/Rent Review: the parties along with Luxembourg
Rent is adjusted annually based compensation. Lease contracts for Subletting: Full subletting is
on the Harmonized Index of indefinite term may be terminated allowed only with the written Netherlands
Consumer Prices (HICP) published by any of the parties with one consent of the landlord. Such
Norway
by the Bulgarian National Statistic month pre-notice. consent may be given in general
Institute. The basis of rent form as a clause of the lease
Poland
escalation is freely negotiable and In case of transfer of the leased contract. Partial subletting is
in the past escalation using the property on part of the landlord allowed without consent of the Portugal
EUROSTAT index of consumer (sale, liquidation, foreclosure, landlord unless the lease contract
prices was not uncommon. inheritance) the lease contract explicitly prohibits it. Romania
However, over the last few years shall be valid and binding the new
the accepted norm is for owner if it is registered in the Real Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 16
United Kingdom
Austria
Belgium
Bulgaria
bulgaria Cyprus
Czech Republic
Legal Environment Concerning complexes that have There are three ways of
Brokerage Law arrangements with a property determining the garbage fee for Denmark
There is no law or regulation of management company. For flats non-residential property of
the activities of real estate in other residential buildings companies: (i) on the basis of the Estonia
brokers in Bulgaria. Law is under service charge is not paid to the number of garbage collection bins
Finland
preparation and it will introduce landlord but there is a common used; (ii) through direct
licensing of the brokers based on space maintenance fee collected negotiation with a company
France
educational and professional by the building chairperson that is contracted for garbage collection
experience requirements. substantially lower. and, (iii) on the basis of the tax
Germany
assessment value of the property..
Unless the agent has signed Local Property Taxes and For year 2009 the garbage fee for Greece
brokerage service agreement with Municipal Garbage Fee: The lease non-residential property of
the client in advance, there is no contracts usually commit tenants companies in Sofia 12 per Hungary
guarantee of payment by the to paying the garbage fee for the thousand and for property of
client if the latter signs a lease or property. Payment of the local individuals and for residential Ireland
sale-purchase agreement for property tax by the tenant is rare. property of companies – 4 per
Italy
property introduced by the agent. The property tax and the garbage thousand.
fee are determined by the
Latvia
Occupancy Costs municipal council of the Acquisition Costs
The following charges are payable respective city at the end of Typical acquisition costs that a Lithuania
by the tenant: February each fiscal year. The company will have to pay when
property tax and the garbage fee buying or leasing new premises Luxembourg
Rents: Rents are usually quoted in are charged for non-residential include:
Euros per square metre per month property of companies upon the Netherlands
and are paid monthly in advance accounting value of the property. Agents Fees
either in EUR or in BGL fixed rate For the property of individuals • Leasing – Fees are usually
Norway
equivalent. and for residential property of 1 month’s net rent plus VAT.
Poland
companies, the charge is based on • Freehold – Fees are usually
Service Charge: Building service the tax assessment value of the between 2.5% and 3%. For Portugal
charges for commercial leases property. That is determined by reasonably large transactions
vary between 1 to 3 Euros per the municipal body on a yearly lower fees are negotiated, Romania
square metre per month, and in basis and is lower than market depending on the size of the
some cases like Malls it may value. For 2009 the property tax property involved, the Russia
reach up to 6 Euros per square in Sofia is 1.6 per thousand. particular market
Serbia
metre. Usually service charges characteristics at the time
are paid monthly in advance with etc., but even in these cases
Slovakia
the rent. For residential property, fees below 1% of the
fixed service charge is applied transaction value are Spain
only for modern buildings or uncommon.
• Sublease – Same as leasing Sweden
fees above.
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 17
United Kingdom
Austria
Belgium
Bulgaria
bulgaria Cyprus
Czech Republic
It should be noted that it is If the tax assessment value of the Other Taxes/Costs: To finalise the
not uncommon in Bulgaria for property is substantially lower purchase of a property a notary Denmark
agents to get paid by both parties than its market price, it is usual for fee is paid, determined on a scale
in a transaction. schemes that avoid payment of the based on the purchase price, but Estonia
property transfer tax on the real not exceeding BGL 6000 (circa
Finland
Property Transfer Tax: For price to be applied. For EURO 3,000). The other cost is the
purchases of property, the transactions between individuals fee for registration of the deal in
France
transfer tax depends on the and for sale of property from the Real Estate Register with the
municipality and ranges between construction companies to Recordation Agency, which is 0.1%
Germany
1.3% to 2.6% of the purchase price individuals, the prices defined in on the purchase price. Usually the
or the tax assessment value of the the notary deeds for the property purchaser assumes these costs, Greece
property exchanged, whichever is transfer are usually equal to the but it is common to be shared
higher. The exact percentage is tax assessment value. In such between the parties. Hungary
determined by the municipal cases other agreements or legal
council of the respective city. For schemas are used for protection of There is also an obligatory Ireland
Sofia the property transfer tax for the parties with respect to the minimum of legal fee for
Italy
year 2009 is 2.5%. The law states payment of the real price. It is not transactional assistance, which is
that purchaser is liable for the uncommon for owners to hide the BGL 700 for the first BGL 100,000
Latvia
property transfer tax unless other real price, not just for the property of the purchase price and 0.1%
terms are negotiated between the transfer expenses but also for over the excess amount. Legal Lithuania
parties. It is common for this tax avoiding payment of income tax. due diligence fees are separate
as well as the other expenses for and usually determined on Luxembourg
the transfer to be shared between VAT: VAT in Bulgaria is currently hourly bases.
the parties. 20%. VAT is applicable on regulated Netherlands
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 18
United Kingdom
Austria
Belgium
Bulgaria
Bulgaria Cyprus
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: The tenant is There are two periods during Denmark
typically responsible for all costs the year when the speed of
associated with fit out. While the transactions are significantly Estonia
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 19
United Kingdom
Austria
Belgium
Bulgaria
Cyprus Cyprus
Czech Republic
Nicosia
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 772.549
Surface area (km²) 9,250
Germany
Density (per km²) 83.5
Local currency Euro Greece
Net direct foreign investment (US$ millions) 975 1018 364 342
Labour Force (millions) 0.4 0.4 0.4 0.4 Latvia
Norway
Major Cities
Poland
City Core Population
Nicosia 197,800 Portugal
Limassol 157,600
Romania
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 20
United Kingdom
Austria
Belgium
Bulgaria
cyprus Cyprus
Czech Republic
Political Structure Transport
Cyprus is a presidential republic but since 1974 Cyprus has two international airports Larnaca Denmark
the country has been divided into a government International Airport and Paphos International
controlled south covering two thirds of the island Airport (www.cyprusairports.com.cy), located Estonia
and a northern third controlled by a Turkish Cypriot 5 kilometres and 10 kilometres from their
Finland
government. The government of the Republic of respective city centres.
Cyprus is the international recognised authority
France
and referred to here. The head of state is the Cyprus does not have a rail network so the majority
president who is directly elected to serve a five of transportation around the island is by air, private
Germany
year term. The legislature in Cyprus is known as bus, and car or by boat.
the House of Representatives (Vouli Antiprosopon) Greece
and is unicameral. International Dialling Code
The country code is + 357 Hungary
Legal Structure
Cyprus’ legal system is based on English common Coordinated Universal Time (UTC) + 2 hours Ireland
law with influences from civil law. Civil and criminal Eastern Standard Time + 7 hours
Italy
cases are heard in district courts with appeals heard
in the Supreme Court. Specific civil issues may be Invest in Bureau
Latvia
heard in the Rent Control Tribunal, the Industrial Further country information can be obtained from
Disputes Tribunal and the Family Court. Criminal the Cyprus Investment Promotion Agency: Lithuania
offences that warrant a sentence of more than 5 www.cipa.org.cy
years are usually head in the Assize Courts. Luxembourg
Poland
Visas
Cyprus is now an EU member so holders of an Portugal
EEA (EU Member States, Iceland, Liechtenstein
and Norway) or Swiss passport do not require Romania
a visa. Nationals from EU-countries as well as
Switzerland and Liechtenstein may remain for an Russia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 21
United Kingdom
Austria
Belgium
Bulgaria
Cyprus Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: The tenancy Occupancy Costs
Legislation: Tenancy Law of the becomes statutory after 2 years The following charges are payable Denmark
Republic of Cyprus of occupancy. The standard by the tenant:
period for renewal/termination is Estonia
Lease Length: General 2 months notice. Rents: Rents are quoted in Euros
Finland
commercial leases are 5 years per square metre per month and
minimum although office leases Break Options and Terminations: are paid monthly in advance.
France
are usually between 2 to 5 years These are agreed between the
long. Residential leases are most parties, usually with a penalty Service Charge (Koinohrista):
Germany
1-4 years and are negotiable. amount. Building service charges are
quoted in Euros per month and Greece
Rent Escalation/Rent Review: Tenant and Landlord Obligations: are paid monthly in advance with
Residential rental amounts are The tenant is usually responsible the rent. Utility charges Hungary
based on number of bedrooms for internal repairs and the (electricity, water, telephone) and
and the condition of premises. landlord for structural works any charges related to common Ireland
With commercial properties the and the maintenance of any areas of building are payable by
Italy
rent is usually agreed at market common areas. the tenant. Common charges are
rate on a per square meter basis billed according to square meters
Latvia
per month. According to Tenancy Subletting: Specifically prohibited occupied. Annual garbage fee as
Law, landlords cannot request unless agreed by both parties. imposed by the local Municipality Lithuania
more than a 14% increase every is payable by the tenant.
2 years. Legal Environment Concerning Luxembourg
Brokerage Law Local Property Taxes: Payment is
Guarantee and Security Deposit: Real estate agents need to be the responsibility of the landlord. Netherlands
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 22
United Kingdom
Austria
Belgium
Bulgaria
Cyprus Cyprus
Czech Republic
Acquisition Costs Property Transfer Tax: For the Holidays
The tenant does not incur any purchase of a property the There is no particular period Denmark
charges for rental of premises, purchaser will be responsible for during the year when the speed of
unless the tenant has hired the paying a property transfer tax of transactions is significantly Estonia
services of an agent and a search/ 3-8% on the declared purchase affected by holidays. Peak holiday
Finland
find fee has been agreed. price, to the Land Registry of the periods tend to be during
Republic of Cyprus. midsummer (mid-August) and
France
Typical acquisition costs that a between Christmas and New Year.
company will have to pay when VAT: VAT in Cyprus is currently
Germany
buying or leasing new premises 15%. Professional fees are subject Acknowledgement
include: to VAT. However, it is not We would like to thank Greece
applicable on the lease or sale of Konstantinos Markogiannakis
Agents Fees commercial property. and Anna Nazou of Danos & Hungary
• Leasing – Fees are usually Associates for their assistance in
1 month’s net rent for a 2 year Use of Space: Traditionally older the preparation of this country Ireland
Norway
Fit Out/Reinstatement/
Dilapidations: Fit out and
Poland
modifications of space are
at the tenant’s expense providing Portugal
the landlord is in agreement
with works. Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 23
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 10,251
Surface area (km²) 79,000
Germany
Density (per km²) 130
Local currency Koruna Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Prague 1,193,270 Portugal
Brno 384,727
Ostrava 322,111 Romania
Pizen 168,422
Olomouc 103,372 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 24
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Political Structure Transport
The Czech Republic is a parliamentary republic with The main international airport is Prague Airport Denmark
a president as head of state. The parliamentary (www.pragueairport.co.uk).
legislature is bicameral consisting of a chamber of Estonia
deputies and a senate. The Chamber of Deputies The Czech Republic has an extensive rail and bus
Finland
(Poslanecka Snemovna) is effectively a continuation system. Travel details around Prague can be
of the federal parliament of Czechoslovakia. The obtained from the transport operators for Prague
France
president is elected by parliament and serves for (www.dpp.cz/en) and Czech Republic
a five-year term. (http://jizdnirady.idnes.cz/vlakyautobusy/spojeni)
Germany
Visas Luxembourg
The Czech Republic is a member of the Schengen
area agreement. Holders of an EEA (EU Member Netherlands
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 25
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The law that governs Landlords usually require a credit The landlord is normally Denmark
commercial leases is based on the rating or a deposit of 3 months responsible for building
Rent Act. rent including VAT or a bank maintenance, insurance, and Estonia
annually (upwards only) based on Break options are negotiable. reasonable grounds for denying
Italy
the Consumer Price Index (HCPI However, tenants should be aware a sublease so in practice they are
EU 25 published by Eurostat) or of notice periods as options will generally accepted.
Latvia
whenever the index has increased expire and become null and void if
by a predetermined amount notice is not delivered on time. Lithuania
specified in the lease. Rent Some lease agreements allow for
increases can sometimes be the termination of the lease prior Luxembourg
pre-determined in leases. to the break option under the
condition of a penalty, subject Netherlands
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 26
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Legal Environment Concerning Acquisition Costs General Market Practices
Brokerage Law Typical acquisition costs that a Basis of Measurement: There are Denmark
There is no legal requirement to company will have to pay when two standard measuring
have a license in order to trade as buying or leasing new premises practices: Estonia
The following charges are payable Areas used for technical use,
Italy
by the tenant: Property Transfer Tax (Stamp structural walls and elevators
Duty): For the purchase of a are excluded. A “gross-up”
Latvia
Rents: Rents are quoted in Euros property a property transfer tax of factor of 5–12% may be
or US Dollars per square metre 5% will be levied, based on the applied to the Net Lettable Lithuania
per month and are paid monthly purchase price of the property plus Area, particularly if the
or quarterly in advance. VAT. The responsibilities of the building is new. Luxembourg
costs are usually negotiated and • Gross Base Area or BGF
Service Charge: Building service very often the costs are split 50:50 (Brutto Geschossfläche). This Netherlands
charges are quoted in Euros or US between seller and purchaser. area is measured from
Norway
Dollars per month or quarter and internal wall to internal wall
are paid monthly or quarterly in Value Added Tax: The VAT rate in and includes all the gross
Poland
advance along with the rent. the Czech Republic is currently area within.
Sometimes service charges are 22% and payable on all forms of Portugal
charged in the local currency. transactions including rent,
building service charge, agents Romania
Local Property Tax: Paid directly fees, notary costs, and property
by the landlord and billed to the transfer tax. Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 27
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: New office There are certain times of the Denmark
developments generally include year when the speed of
raised floors, carpeting and transactions is reduced due to Estonia
current condition.
Norway
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 28
United Kingdom
Austria
Belgium
Bulgaria
denmark Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
Copenhagen France
Population (thousands) 5,435
Surface area (km²) 43,000
Germany
Density (per km²) 126
Local currency Kroner Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Copenhagen 499,148 Portugal
Aarhus 286,668
Odense 183,691 Romania
Aalborg 161,661
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 29
United Kingdom
Austria
Belgium
Bulgaria
denmark Cyprus
Czech Republic
Legal Structure Transport
Denmarks’ judiciary is a civil law system. The main international airport is Copenhagen Airport Denmark
Denmark’s court system comprises 100 local (www.cph.dk), which is also the main hub for
courts, two high courts, several special courts Northern Europe. Denmark has three other Estonia
(that deal with arbitration and maritime issues) international airports at Århus, Aalborg and Billund.
Finland
and a supreme court for appeals not resolved by
the two high courts. Greater Copenhagen is served by the “S” train under/
France
overground suburban rail system. Denmark’s rail
Hours of Business service connects Copenhagen with the towns of
Germany
The main business hours are Monday to Friday Jutland, Funen and Zealand. Danske Statsbaner –
around 08:00am – 17:00pm. Danish State Railways (DSB) – runs the service and Greece
travel information can be found at their website
Visas www.dsb.dk/Rejseplan/bin/query.exe/en. Hungary
Denmark is a member of the Schengen area
agreement. Holders of an EEA (EU Member States, International Dialling Code Ireland
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 30
United Kingdom
Austria
Belgium
Bulgaria
Denmark Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The legislation that Landlords usually require Maintenance and insurance Denmark
governs commercial leases information from prospective obligations are not regulated by
(Erhverslejeloven) is new and tenants such as banking details or law and can be divided freely Estonia
came into effect in 2000. access to company information. A between the tenant and landlord.
Finland
bank guarantee of 6 months gross Normally the landlord is
Lease Length: Typically the term rent is necessary to complete the responsible for building
France
of a lease is not specified and is lease although a deposit may maintenance, insurance, and
expected to be ongoing. Generally sometimes be paid. technical installations and the
Germany
the tenant and the landlord will tenant is responsible for
agree to an interminable period Rights of Renewal: Tenants do maintenance and insurance Greece
whereby the lease will be not have a legal right to renew within the premises.
guaranteed for that period of the lease. As most leases in Hungary
time, for example, in new Denmark are for an unspecified Subletting: The tenant has, by
buildings the tenant is guaranteed length of time it is uncommon for law, no right to transfer the lease Ireland
a 10 year lease with the leases to contain a right to renew agreement or sublease space
Italy
possibility of early termination by the lease. For leases that have without the landlord’s consent.
the tenant after 5 years. specified terms the lease may be Generally subletting is allowed
Latvia
renewed after renegotiation with with the prior written consent of
Rent Escalation/Rent Review: the landlord. the landlord. Lithuania
Rents are indexed annually to the
Consumer Price Index but may Break Options and Terminations: Luxembourg
also be adjusted automatically There is a possibility to break/
whenever the CPI changes by a renegotiate the agreement if this Netherlands
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 31
United Kingdom
Austria
Belgium
Bulgaria
denmark Cyprus
Czech Republic
Legal Environment Concerning Occupancy Costs Acquisition Costs
Brokerage Law The following charges are payable Typical acquisition costs that Denmark
A brokerage licence, which is by the tenant: a company will have to pay
issued by the government, is only when buying or leasing new Estonia
required to conduct sales Rents: Rents are quoted in Danish premises include:
Finland
transactions. Typically brokers Kroner (DKK) per square metre
represent the landlord, but per annum and are paid in Agents Fees
France
recently some corporations have advance on a quarterly basis. • Leasing – Fees are usually
started to use consultants during approximately 15 % of the first
Germany
negotiations to protect their Service Charge: Building service year’s annual net rent. Each
interests. There are no limitations charges are quoted in Danish party typically pays the fee of Greece
to advice given by agent, on legal Kroner (DKK) per square metre their contracted agent.
or financial matters. per annum and are paid in • Freehold – Fees are paid by Hungary
advance on a quarterly basis the seller and are negotiable
The common method for sales of along with the rent. All service but are usually between 1 – Ireland
properties are options for selected charges must be agreed upon 3% of the agreed purchase
Italy
buyers to place an offer and separately in the lease agreement. price depending on
“closed bidding”. “Open bidding” The tenant normally pays for transactions size.
Latvia
sales are primarily used when a heating and electricity themselves • Subletting – Same as leasing.
public property is being sold. As via separate agreements with Lithuania
the name implies, all offers after distributors (power company). Property Transfer Tax (Stamp
the deadline are openly known by The landlord typically invoices Duty): During the purchase of a Luxembourg
all interested parties. building insurance through the property the purchaser will be
service charge. responsible to pay a transfer tax Netherlands
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 32
United Kingdom
Austria
Belgium
Bulgaria
Denmark Cyprus
Czech Republic
General Market Practices Holidays
Basis of Measurement: For office The peak holiday period in Denmark
premises, the typical method of Denmark is during the summer
measurement is to measure from months, but July specifically is the Estonia
the exterior of the building to the only time period where transaction
Finland
midpoint of subdividing walls. The speed may be significantly slowed
area used to calculate rent will due to holidays.
France
also typically include a share of
common areas such as entrances,
Germany
staircases, elevators, and
corridors. Greece
Portugal
Use of Space: The most common
form of office premises in Denmark Romania
is a mixed plan utilizing both
cellular offices and open areas. Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 33
United Kingdom
Austria
Belgium
Bulgaria
Tallinn
Estonia Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 1,343
Surface area (km²) 45,288
Germany
Density (per km²) 29.6
Local currency Kroon Greece
Net direct foreign investment (US$ millions) 673 1,115 1,050 950
Labour Force (millions) 0.7 0.7 0.7 0.7 Latvia
Norway
Major Cities
Poland
City Core Population
Tallinn 396,010 Portugal
Tartu 101,483
Romania
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 34
United Kingdom
Austria
Belgium
Bulgaria
estonia Cyprus
Czech Republic
Political Structure Transport
Estonia is a parliamentary republic with a president Tallinn Airport (www.tallinn-airport.ee) Denmark
elected by parliament for a five year term. Estonia’s is the international airport in Estonia. Train
parliament is unicameral and known as the services operate in Tallinn with connections to Estonia
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 35
United Kingdom
Austria
Belgium
Bulgaria
Estonia Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Legal Environment Concerning
Lease Length: Leases between The tenant has no right by law to Brokerage Law Denmark
3 and 5 years are typical, but an prematurely terminate the lease. There are no certain laws on
unlimited lease may be agreed. Break options can be agreed in brokerage. There are brokers Estonia
Older agreements contain early rental agreements. A typical associations that grant
Finland
termination clauses with a typical break option is the termination of certificates based on exams.
6 month announcement time. the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
Rent Escalation/Rent Review: landlord and tenant to agree to The following charges are payable
Germany
Rent escalations apply to leases an early termination depending by the tenant:
longer than 2 years, or for an on the market conditions and the Greece
indefinite term, and are typically specific nature of the lease. Rents: Rents are quoted in local
linked to the Consumer Prices currency on a square metre per Hungary
Index (or a percentage of CPI) and Tenant and Landlord Obligations: month basis and are paid on a
are adjusted annually. Rent The landlord is usually monthly basis. Typically Ireland
reviews are upward adjustment responsible for external building agreements contain exchange
Italy
only. maintenance and technical rate protection clauses against
installations and the tenant is currency devaluation risks.
Latvia
Guarantee and Security Deposit: responsible for internal
Rent deposits and/or bank maintenance. The landlord is also Service Charge: Building service Lithuania
guarantees of 3–6 months rent responsible for insurance of the charges are quoted in local
are usually required from building and land tax but in single currency, on square metre per Luxembourg
prospective tenants. tenant properties the tenant may month basis and are paid monthly
sometimes be required to insure with the rent. These charges Netherlands
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 36
United Kingdom
Austria
Belgium
Bulgaria
Estonia Cyprus
Czech Republic
Acquisition Costs General Market Practices Holidays
Typical acquisition costs that a Basis of Measurement: For office Peak holiday season is during the Denmark
company will have to pay when premises, the normal summer months from mid-June to
buying or leasing new premises measurement of area used to mid-August, when transaction Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 37
United Kingdom
Austria
Belgium
Bulgaria
Finland Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 5,267
Surface area (km²) 338,000
Germany
Density (per km²) 16
Local currency Euro Greece
Helsinki
Norway
Major Cities
Poland
City Core Population
Helsinki 548,720 Portugal
Espoo 207,314
Tampere 192,214 Romania
Vantaa 175,123
Turku 171,519 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 38
United Kingdom
Austria
Belgium
Bulgaria
finland Cyprus
Czech Republic
Political Structure Transport
Finland is a parliamentary republic where executive Finland’s international airport is Helsinki-Vantaa Denmark
powers are split between the president and the Airport (www.helsinki-vantaa.fi) in Vantaa. Finland
prime minister plus the ministerial cabinet. The also has a network of local airports and rail network Estonia
president is elected for a 6-year term by popular to connect the rest of the country. Timetables for the
Finland
vote. The prime minister and Council of State are rail network can be obtained from the operator,
answerable to the parliament (Eduskunta) which Finnish State Railways (www.vr.fi/heo/index.html).
France
is unicameral and the supreme legislative body
in Finland. International Dialling Code
Germany
The country code is + 358
Legal Structure Greece
Finland’s legal system is based on civil law and Coordinated Universal Time (UTC) + 2 hours
incorporates much of Swedish law. The Finnish Eastern Standard Time + 7 hours Hungary
judiciary consists of two systems; general courts and
administrative courts. The general courts handle Invest in Bureau Ireland
civil suits and criminal cases whilst the Further country information can be obtained from
Italy
administrative courts oversee the country’s the Invest in Finland bureau:
bureaucracy. www.investinfinland.fi
Latvia
Visas
Norway
Finland is a member of the Schengen area
agreement. Holders of an EEA (EU Member States,
Poland
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from Portugal
EU-countries as well as Switzerland and
Liechtenstein may remain for an unlimited time. Romania
Citizens of the United States of America do not
require a visa for entry. A residence permit is Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 39
United Kingdom
Austria
Belgium
Bulgaria
finland Cyprus
Czech Republic
Typical Lease Terms Rent Escalation/Rent Review: Tenant and Landlord Obligations:
Legislation: The Real Property Rent escalations apply to leases Typically the landlord is Denmark
Code governs commercial lease longer than 3 years or for an responsible for external building
contracts in Finland. While this is indefinite term, and are typically maintenance and technical Estonia
primarily intended to govern linked to the Consumer Prices installations and the tenant is
Finland
residential transactions, it does Index and are adjusted annually. responsible for internal
include mandatory regulations for Upward adjustment only is most maintenance. The landlord is
France
commercial leases. The common. responsible for insurance of the
association of property owners building but in single tenant
Germany
have published standard Guarantee and Security Deposit: properties, the tenant may
contracts for different types of Rent deposits and/or bank sometimes be required to insure Greece
properties (hotels, shopping guarantees of 3 – 6 months rent the property.
centres, offices) that are are usually required from Hungary
approximately 2-4 pages with prospective tenants. Subletting: The tenant is not
appendices covering indexation of permitted to sublet the premises Ireland
rent and service charges and so Rights of Renewal: The tenant is without the prior written consent
Italy
on. It is not compulsory to use the afforded no security of tenure by of the landlord.
standard contracts and any form law but commonly may negotiate
Latvia
of contract is acceptable as long rights of renewal with the
as it conforms to the Real landlord. Lithuania
Property Code. While most
companies utilise the standard Break Options and Terminations: Luxembourg
leases they tend to have their own The tenant has no right by law to
standard appendices. As most prematurely terminate the lease. Netherlands
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 40
United Kingdom
Austria
Belgium
Bulgaria
Finland Cyprus
Czech Republic
Legal Environment Concerning Acquisition Costs General Market Practices
Brokerage Law Typical acquisition costs that a Basis of Measurement: For office Denmark
An agency must have a person company will have to pay when premises, the normal measurement
possessing an authorization for buying or leasing new premises of area used to calculate rent is the Estonia
brokerage (LKV) who also acts as include: Net Base Area. This is the net
Finland
the responsible person for leasable area and does not include
documenting all transactions. Agents Fees areas used for technical use such
France
Individual agents must possess a • Leasing – Fees are typically as vertical penetrations (such as
brokerage licence provided by the 15-20% of the first year’s elevator shafts and stairs) or
Germany
magistrate of local municipality gross annual rent. Each party structural walls.
(Lääninhallitus/Länsstyrelsen). typically pays the fee of their Greece
contracted agent. Fit Out/Reinstatement/
Occupancy Costs • Freehold – Fees are paid by Dilapidations: Fit out is completed Hungary
The following charges are payable the seller and are negotiated to tenant specifications and is
by the tenant: on a case-by-case basis financed by the landlord. The cost Ireland
and are paid in advance on a Property Transfer Tax: During premises today is open plan for
Norway
quarterly basis with the rent. the purchase of a property the cost effective reasons.
These charges include heating, purchaser will be responsible for
Poland
water/sewage, and maintenance. paying a transfer tax equal to 4% Holidays
Tenants usually pay their own of the purchase price. Peak holiday season is during the Portugal
electricity. summer months of June to August
Value Added Tax: The current VAT (July is high season) but Romania
Local Property Tax: Local rate in Finland is 22% and most transaction times do not
property tax is paid by the tenants pay VAT on rent. In some necessarily become significantly Russia
landlord directly but ultimately cases where the landlord is not effected.
Serbia
this cost is invoiced back to the VAT registered, the VAT is not
tenant through a service charge. charged. This applies to banks, Acknowledgement
Slovakia
insurance companies, churches. We would like to thank Helén
Silverstolpe and Max Barclay Spain
of Newsec Advice AB for their
assistance in the preparation Sweden
of this country review.
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 41
United Kingdom
Austria
Belgium
Bulgaria
France Paris
Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 61,353
Surface area (km²) 549,000
Germany
Density (per km²) 112
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Paris 2,152,329 Portugal
Marseille 800,309
Lyon 415,479 Romania
Toulouse 358,598
Nice 342,903 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 42
United Kingdom
Austria
Belgium
Bulgaria
France Cyprus
Czech Republic
Political Structure Transport
France is a parliamentary republic with a The main international airport is Paris Roissy Denmark
presidential head of state who is elected for five Charles de Gaulle (www.aeroportsdeparis.fr) that is
years. The president appoints the prime minister to located 23 kilometres to the north east of Paris. Estonia
lead the government. The main legislative body is The other major airport in Paris is Paris Orly.
Finland
the bicameral parliament that is comprised of the France’s other international airports are found in
Senate and the National Assembly. The Senate’s Bordeaux, Lille, Lyon, Marseilles, Nice and Toulouse.
France
powers are limited compared to the National
Assembly that has primacy in legislative matters. France has a very well developed public transport
Germany
network. As well as buses Paris is served by the
Legal Structure Regional Express Railway (RER) for suburban rail Greece
The French legal structure is a civil law system that services and the efficient underground system, the
includes concepts that developed out of the Metro. The Paris Transport Company provides Hungary
Napoleonic period to form the basis of the highly timetables for travel for both services (www.ratp.fr).
influential French Civil Code. The French judiciary Intercity rail services are provided by SCNR Ireland
includes local courts that consist of a variety of civil (www.sncf.com) and travel detail can be found at
Italy
and criminal courts, 35 regional courts of appeal, (www.tgv-europe.com/en/home).
and the highest criminal court, known as the Court
Latvia
of Cassation. Paris is a destination terminal for the Eurostar
service (www.eurotunnel.com) from France to the Lithuania
Hours of Business UK plus links to other European rail networks.
The main business hours are Monday to Friday Luxembourg
09:00am – 12:00pm, 13:00pm – 18:00pm. International Dialling Code
The country code is + 33 Netherlands
Visas
Norway
France is a member of the Schengen area Coordinated Universal Time (UTC) + 1 hour
agreement. Holders of an EEA (EU Member States, Eastern Standard Time + 6 hours
Poland
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from EU- Invest in Bureau Portugal
countries as well as Switzerland and Liechtenstein Further country information can be obtained from
may remain for an unlimited time. Citizens of the the Invest in France bureau: Romania
United States of America do not require a visa for www.invest-in-france.org
entry. A residence permit is required if intending to Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 43
United Kingdom
Austria
Belgium
Bulgaria
France Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The law that governs Landlords usually require Tenant obligations are internal Denmark
leases is based on the regulations information from prospective repair while landlord obligations
of article L.145.1 and subsequent tenants such as banking details or are main structural repairs and to Estonia
articles of the new “Code de access to company information. A keep the roof watertight.
Finland
Commerce” and the non- deposit of 3 months net rent must Maintenance and insurance is
abrogated parts of Decree N° 53– be paid when the lease is signed. paid by the landlord and re-
France
360 of 30 September 1953 and The landlord may accept a bank invoiced to the tenant.
subsequent amendments. guarantee to replace the deposit.
Germany
Subletting: The tenant is not
Lease Length: A lease can be 3 Rights of Renewal: On lease permitted to sublet the premises Greece
years although 6 or 9 fixed year expiry the tenant has no security without written consent from
leases are frequently used. of tenure. In the 9th year of the the landlord, or unless it has Hungary
lease, with 6 months notice, the otherwise been authorised in
Rent Escalation/Rent Review: landlord may either renew the the lease. Ireland
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 44
United Kingdom
Austria
Belgium
Bulgaria
france Cyprus
Czech Republic
Legal Environment Concerning Land Property Tax: Land Tax • Subletting – Fees are typically
Brokerage Law (Impôt Foncier) is assessed on a based on the time that the Denmark
To be a property consultant, no percentage of the notional value main tenant’s lease still had
specific qualifications are required of the building and is paid by the to run (usually 10% of the Estonia
but each agent must be registered landlord on an annual basis. This year’s net rent for terms of
Finland
to get a “transaction card” in cost is passed on to the tenant. one year or less and 20% for
order to be paid. In a company terms of two years or more),
France
there is usually one “transaction Other Taxes/Costs: Office Tax or on a percentage (to be
card” for the manager (it is a (Taxe Bureaux) specific to the Ile- negotiated) of the savings
Germany
nominal card). The manager then de-France region is assessed on made through the early
delegates his card to the other the size of the premises based on surrender. Greece
members of the company. To be an annual fixed price per square
registered a warrant is needed. metre and paid by the landlord on Property Transfer Tax: For the Hungary
an annual basis. This cost is purchase of a property, the
In accordance with the law passed on to the tenant. purchaser will be responsible for Ireland
or let the property on their behalf. 30% of the first year’s net transfer tax.
Norway
rent. The fees are usually split
Occupancy Costs 50:50 between the tenant and Other Taxes/Costs: Notary fee
Poland
The following charges are payable landlord. Sometimes a (0.825% if it is over 16,770 Euros),
by the tenant: different fee-split is agreed, and other small expenses (stamps, Portugal
for example, 2/3 may be paid mortgage costs). The notary is
Rents: Rents are quoted in Euros by one party and 1/3 by the responsible for collecting all taxes Romania
per square metre per annum and other and occasionally one and extra costs, which is
are paid quarterly in advance. party may pay all the fees. approximately 6.5% – 7% of the Russia
Turkey
Ukraine
BNP par i b as rea l estate 45
United Kingdom
Austria
Belgium
Bulgaria
France Cyprus
Czech Republic
General Market Practices • SUB (Surface Utile Brute ou All works, decorations,
Basis of Measurement: In France, Surface locative) – Gross installation, additions, and Denmark
the following terms are used to Usable or Lettable Areas. This furnishings which the tenant may
define floor areas: is the area normally used in undertake on the premises during Estonia
the standard French lease the lease shall, at the end of the
• SHOB (Surface Hors Oeuvre contract for calculating rent. lease or at the end of renewal, Finland
Brute) – Gross Areas excluding The SUB is equal to the sum of belong to the landlord, unless the
France
the shell of the building. The the office areas and common latter should demand the return
SHOB is equal to the sum of areas, corridors (but not the of the premises to their original
Germany
the areas of each floor of a vertical circulations), toilets, state.
building, taking into account social areas and landings. Greece
the bare exterior of the walls • SUN (Surface Utile Nette) – Use of Space: Companies occupy
and the finished floors. It Net Lettable Areas (used for office space usually as cellular Hungary
includes basements and attic space planning) – The SUN is offices mixed with open spaces
spaces, whether they are equal to the SUB after having (for projects team or commercial Ireland
is equal to the SHOB after Dilapidations: Office buildings peak holiday period. Many of the
Norway
having deducted basements are usually delivered carpeted, smaller companies close down in
and attic spaces not fitted out with suspended ceilings, lighting August whilst larger firms operate
Poland
for residential or professional and wiring (except data wiring), with only a skeleton staff.
activities (the attic spaces to and mechanical and electrical Portugal
be deducted are considered to servicing. Raised floors and air
be areas of which the ceiling conditioning are standard in new Romania
height is less than 1.80 m), buildings. In a tenant’s market the
roof verandas, balconies, landlord may assume the cost of Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 46
United Kingdom
Austria
Belgium
Bulgaria
Germany Cyprus
Czech Republic
Berlin
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 82,368
Surface area (km²) 357,000
Germany
Density (per km²) 231
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Berlin 3,386,667 Portugal
Hamburg 1,704,735
Munich 1,194,560 Romania
Cologne 962,507
Frankfurt am Main 643,821 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 47
United Kingdom
Austria
Belgium
Bulgaria
Germany Cyprus
Czech Republic
Political Structure Transport
Germany is a federal republic with a president as The most important airports in Germany are Denmark
head of state elected every five years by the federal Frankfurt (www.frankfurt-airport.de), Munich
legislature. The German central government is (www.munich-airport.de), Düsseldorf Estonia
Germany’s legal system is based on civil law with (RB) connects regions and the city centres whilst the
Italy
developments unique to Germany pertaining to the Stadt-Express (SE) and S-Bahn network facilities
rights of the individual. The judiciary consists of movement within cities and agglomerations. The
Latvia
ordinary courts, specialised courts and constitutional Intercity Express, Eurocity and Thayls (www.thalys.
courts. There are four levels of ordinary courts with com) train services link Germany to other European Lithuania
the majority (mostly lower level civil and criminal) cities. Train timetables are available from Deutsche
operating at state level although the higher level Bahn (www.bahn.de). Luxembourg
courts (mostly appeal) at federal level.
International Dialling Code Netherlands
Portugal
Visas Invest in Bureau
Germany is a member of the Schengen area Further country information can be obtained from Romania
agreement. Holders of an EEA (EU Member States, the Invest in Germany bureau:
Iceland, Liechtenstein and Norway) or Swiss www.invest-in-germany.com/homepage Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 48
United Kingdom
Austria
Belgium
Bulgaria
Germany Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: Options to Tenant and Landlord Obligations:
Legislation: The law that governs renew can be granted annually, Tenant obligations are internal Denmark
leases is based on the German biannually, or for a further five repair and building and liability
Civil Code (BGB or Bürgerliches years. The length and terms of insurance, while landlord Estonia
Gesetzbuch), on statutory orders options are subject to negotiation. obligations are typically external
Finland
(Rechtsverordnung) or case law. repairs, structural repairs,
Break Options and Terminations: maintenance and loss of rent
France
Lease Length: 5 years with an Options are negotiable but insurance.
additional 5 years renewal or tenants should be aware of notice
Germany
10 year leases are typical in periods to terminate otherwise Subletting: Generally subletting
Germany. leases can continue automatically. is allowed with the written Greece
In most cases, if notice is not consent of the landlord. The
Rent Escalation/Rent Review: given either 6 or 12 months in landlord must accept the Hungary
Rent is adjusted annually based advance, the lease will subtenant if they have an average
on the Consumer Price Index (VPI) automatically continue for an covenant, but is allowed to Ireland
or compounded annually. In either additional year or in some cases 5 prohibit subletting if the use of
Italy
case, the terms and type of years. Some lease agreements the premises by a subtenant
indexation are negotiable. allow for the premature exit of a substantially deviates from the
Latvia
lease with the condition of a original use by the main tenant. If
Guarantee and Security Deposit: penalty. In some cases, the not explicitly mentioned in a lease Lithuania
Landlords usually require penalty is set out in the lease agreement, tenants are able to
information from prospective agreement. If a penalty clause is charge higher rents to subtenants Luxembourg
tenants such as banking details not included in a lease agreement, then what they pay to the
or access to company information. then the lease term is usually landlord. Netherlands
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 49
United Kingdom
Austria
Belgium
Bulgaria
germany Cyprus
Czech Republic
Legal Environment Concerning Occupancy Costs Acquisition Costs
Brokerage Law The following charges are payable Typical acquisition costs that a Denmark
Agents need a trade licence but by the tenant: company will have to pay when
no specific education to practice buying or leasing new premises Estonia
receive fees and to determine the the monthly building service • Subletting – In a landlord’s
Norway
total brokerage fee of the charges. The monthly service market, a subtenant would
transaction. charge includes the local property pay fees to the agent
Poland
tax. instructed by the main tenant
This can be avoided if the real equivalent to 2.5 to 4 months Portugal
estate department of the tenant is gross monthly rent (including
aware of this environment and parking) as set out above. Romania
notifies local management not to However, in tenant friendly
go to market unless instructed at markets, subtenants will use Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 50
United Kingdom
Austria
Belgium
Bulgaria
germany Cyprus
Czech Republic
Property Transfer Tax General Market Practices In addition, a pro-rata share of
(Grunderwerbsteuer): For the Basis of Measurement: There are common areas may be added by Denmark
purchase of a property, the three standard measuring landlords to gain rent for
purchaser will be responsible for practises: entrance halls, etc. Alternatively, Estonia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 51
United Kingdom
Austria
Belgium
Bulgaria
germany Cyprus
Czech Republic
Use of Space: Companies typically Holidays
occupy office space as cellular There are certain times of the Denmark
offices for one or two people. Open year when the speed of
plan space is becoming more transactions are significantly Estonia
common but the size of the open reduced due to holidays. Different
Finland
space is subject to ceiling height. federal states in Germany have
The use and density of space must summer school holidays of six
France
be in accordance with the weeks beginning as early as the
Arbeitsstättenrichtlinienverordnung end of June and the latest from
Germany
or Federal Workspace Guidelines the end of August. There are also
that are administered by the Trade a number of public holidays Greece
Supervisory Office. These during the middle of the week in
guidelines govern the distance May and June, when many people Hungary
from natural light, position of a will take holidays for a number of
desk, position of a PC on the desk days. Easter school break is Ireland
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 52
United Kingdom
Austria
Belgium
Bulgaria
greece Cyprus
Czech Republic
Denmark
Athens Estonia
Finland
Country Statistics
France
Population (thousands) 11,149
Surface area (km²) 132,000
Germany
Density (per km²) 84
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Athens 772,072 Portugal
Salonika (Thessaloniki) 749,048
Piraeus 182,671 Romania
Patras 153,344
Peristeri 137,288 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 53
United Kingdom
Austria
Belgium
Bulgaria
greece Cyprus
Czech Republic
Political Structure Transport
Greece is a parliamentary republic whose president The main international airport in Greece is Athens Denmark
is elected by parliament to serve five year terms. International Airport Eleftherios Venizelos
The Hellenic Parliament is unicameral parliament (www.aia.gr) south east of Athens city centre. Estonia
consists of 300 seats with members elected by Bus and a three line suburban train system connect
Finland
popular vote to serve four-year terms. Athens. The state company, the Attikko Metro
(www.ametro.gr) runs the system, provides
France
Legal Structure timetables and is currently working to expand the
The Greek legal structure is European civil system network. Outside of Athens, the only rail connection
Germany
based on codified Roman law (itself based on ancient is between Athens and Thessaloniki. Most travel is
Greek law) with influences from German legal done by short haul internal flights or by bus. Greece
tradition. The Greek judiciary consists of three types
of court; civil, criminal and administrative that International Dialling Code Hungary
operate at three levels of jurisdiction. The country code is + 30
Ireland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 54
United Kingdom
Austria
Belgium
Bulgaria
Greece Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: Options to Tenant and Landlord Obligations:
Legislation: Commercial leases renew can be negotiated between Tenant obligations are internal Denmark
are governed by the Greek Civil the two parties. Lease contracts repair, maintenance and content
Code and Presidential Decree agreed for a definite term may insurance whilst landlord Estonia
Special lease contracts may also notice must be served to the Legal Environment Concerning
Italy
be agreed on the basis of landlord 6 months after the end Brokerage Law
alternative legal arrangements. of the 2 year period and a Agents need to be registered to
Latvia
compensation of 4 months rent practice in Greece if they are to
Rent Escalation/Rent Review: must be paid to the landlord. enjoy the privileges provided to Lithuania
Rent is adjusted annually based on Upon expiry of a 12-year lease the them by Greek law, but private
the Cost of Living Index. The basis landlord may terminate the lease contracts to pay an agency fee to Luxembourg
of rent escalation is freely provided that 9 months prior a non-registered agent are still
negotiable and in the past, written notice is served and that enforceable. Netherlands
Turkey
Ukraine
BNP par i b as rea l estate 55
United Kingdom
Austria
Belgium
Bulgaria
Greece Cyprus
Czech Republic
Occupancy Costs Acquisition Costs Property Transfer Tax: Two
The following charges are payable Typical acquisition costs that systems exist. For land and Denmark
by the tenant: a company will have to pay properties with permits prior to
when buying or leasing new Jan 2006 has the purchaser Estonia
Rents: Rents are quoted in Euros premises include: responsible for paying a property
Finland
per square metre per month and transfer tax of 9-11% on the
are paid monthly in advance. Agents Fees value of the property exchanged
France
• Leasing – Fees are usually (as quoted on the relevant SPA).
Service Charge (Koinohrista): 1 month’s net rent plus VAT or For properties with permits post
Germany
Building service charges are 10% to 12% per annual rent Jan 2006, transactions are subject
quoted in Euros per square metre plus VAT. to VAT. Greece
per month and are paid monthly • Freehold – Fees are
in advance with the rent. negotiable and depend on the VAT: VAT in Greece is currently Hungary
size of the property involved 19%. Professional fees are subject
Local Property Taxes: These and the particular market to VAT. Ireland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 56
United Kingdom
Austria
Belgium
Bulgaria
Greece Cyprus
Czech Republic
General Market Practices Holidays
Basis of Measurement: There is There is no particular period Denmark
no standard basis of during the year when the speed of
measurement in Greece but transactions is significantly Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 57
United Kingdom
Austria
Belgium
Bulgaria
Hungary Budapest
Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 10,071
Surface area (km²) 93,000
Germany
Density (per km²) 108
Local currency Forint Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Budapest 1,825,153 Portugal
Debrecen 204,340
Miskolc 172,993 Romania
Szeged 158,646
Pécs 157,970 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 58
United Kingdom
Austria
Belgium
Bulgaria
hungary Cyprus
Czech Republic
Political Structure Transport
Hungary is a parliamentary republic with a president The principal international airport is Budapest Denmark
as head of state elected by the National Assembly Airport Zr (www.bud.hu), located at Ferihegy 16
to serve a 5 year term. The parliament or National kilometres to the south east of Budapest. Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 59
United Kingdom
Austria
Belgium
Bulgaria
Hungary Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: The tenant Legal Environment Concerning
Legislation: The Hungarian Civil has no security of tenure by law. Brokerage Law Denmark
Code and specifically, the Leases Leases will terminate at the date There is no legal requirement to
Act 1993, governs commercial of expiry, and must be have a license in order to trade as Estonia
leases and leasehold, which rent or a bank guarantee is The following charges are payable
Italy
refers to agricultural land. necessary to complete the lease. by the tenant:
Latvia
Break Options and Terminations: Tenant and Landlord Obligations: Rents: Rents are quoted in Euros
Options are negotiable, however, Normally the landlord is or US Dollars per square metre Lithuania
tenants should be aware of notice responsible for building per month (also Forints) and are
periods as options will expire and maintenance, insurance, and paid monthly or quarterly in Luxembourg
become null and void if notice is technical installations and tenant advance.
not delivered on time. In most are responsible for small Netherlands
cases, the penalty for early lease maintenance and insurance Service Charge: Building service
Norway
termination is subject to within the premises. Maintenance charges are quoted in Euros or US
negotiations and depends on obligations should be clearly spelt Dollars per month or quarter and
Poland
current market conditions. out in the lease agreement. are paid monthly or quarterly in
Termination notice periods for advance. Service charges are Portugal
landlords are one year and 15 Subletting: Generally subletting sometimes charged in the local
days for tenants. is allowed, but only with the prior currency. Romania
written consent of the landlord.
Rent Escalation/Rent Reviews: The landlord is not obliged to Local Property Tax: Paid directly Russia
Rents escalation is based on the accept the subtenant, however, in by the landlord and invoiced to
Serbia
Hungarian Service Price Index or practice if the subtenant’s the tenant.
European Consumer Price. covenant is good, then it will
Slovakia
Indexation is either annual or generally be accepted.
whenever the index has increased Spain
by, for example, more than 2-3%.
Rent indexation is generally Sweden
upwards only.
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 60
United Kingdom
Austria
Belgium
Bulgaria
Hungary Cyprus
Czech Republic
Acquisition Costs Other Taxes/Costs: For the Fit Out/Reinstatement/
Typical acquisition costs that a purchase of a property legal and Dilapidations: New office Denmark
company will have to pay when notary costs of approximately 0.5- developments generally include
buying or leasing new premises 1% in total, based on the purchase raised floors, carpeting and Estonia
include: price of the property plus VAT are partitioning as a standard and
Finland
payable. The responsibilities of such costs are borne by the
Agents Fees these costs are usually negotiated landlord. Upgrading space to full
France
• Leasing – Leasing – Fees are and very often the costs are split air conditioning is generally the
usually equal to 2 months net 50:50 between vendor and responsibility of the tenant as
Germany
rent for a lease agreement. purchaser. only a top cooling/fan pipe system
• Freehold – Fees are is normally installed in new Greece
negotiable but are typically General Market Practices buildings. When letting second
1.5–2.5% of the purchase Basis of Measurement: There are generation space, the landlord Hungary
price, and are paid by the two standard measuring will generally assume the costs of
seller. practises: installing partitioning according Ireland
responsibilities of the costs are toilets, kitchens, separating unless otherwise stipulated in the
Norway
usually negotiated and very often walls, and circulation space. lease. If the landlord wishes, they
the costs are split 50:50 between Areas used for technical use, may ask for the premises to
Poland
vendor and purchaser. structural walls and elevators remain in their existing condition.
are excluded. A “gross-up” Portugal
Value Added Tax: The VAT (ÁFA) factor of 5 – 12 % may be Use of Space: Both open plan and
rate in Hungary is 20% and is applied to the Net Lettable cellular offices are predominantly Romania
payable on all forms of Area, particularly if the used in Hungary.
transactions including rent, building is new. Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 61
United Kingdom
Austria
Belgium
Bulgaria
Ireland Cyprus
Czech Republic
Denmark
Estonia
Dublin
Finland
Country Statistics
France
Population (thousands) 4,233
Surface area (km²) 70,000
Germany
Density (per km²) 60
Local currency Euro Greece
Net direct foreign investment (US$ millions) -15,589 4,081 9,363 -752
Labour Force (millions) 2.1 2.2 2.2 2.2 Latvia
Norway
Major Cities
Poland
City Core Population
Dublin 952,692 Portugal
Cork 179,954
Romania
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 62
United Kingdom
Austria
Belgium
Bulgaria
Ireland Cyprus
Czech Republic
Political Structure Transport
Ireland is a parliamentary republic with a president The main airport is Dublin International Denmark
as chief of state who is directly elected by the people (www.dublinairport.com) located approximately
to serve for a 7-year term. The Irish parliament 10 kilometres north of Dublin city centre. There is no Estonia
(Oireachtas) is bicameral and consists of the Senate dedicated rail link to the airport.
Finland
(Seanad Eireann) and the House of Representatives
(Dail Eireann). The Senate oversees and advises on Train services (www.irishrail.ie) connect the main
France
legislation passed by the House of Representatives cities and there are extensive bus and coach services
where legislative power resides. The majority party around Dublin (www.cie.ie) and the rest of Ireland.
Germany
or coalition nominates the prime minister
(Taoiseach). International Dialling Code Greece
The country code is + 353
Legal Structure Hungary
The Irish legal system is based on English common Coordinated Universal Time (UTC)
law and modified to incorporate local concepts. The Eastern Standard Time + 5 hours Ireland
Visas
Norway
Ireland is not a member of the Schengen area
agreement. Holders of an EEA (EU Member States,
Poland
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from EU- Portugal
countries as well as Switzerland and Liechtenstein
may also enter without a visa. Citizens of the United Romania
States of America do not require a visa for entry. A
residence permit is required if intending to stay for a Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 63
United Kingdom
Austria
Belgium
Bulgaria
Ireland Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The law that governs Landlords usually require When the building is entirely Denmark
leases is the Landlord and Tenant information from prospective occupied by one tenant, the
Act 1980 together with various tenants such as accounting/ tenant will normally take on full Estonia
ancillary legislation. banking details and access to repairing and insuring obligations
Finland
company information. Either a (FRI) for the interior and exterior
Lease Length: 20-25 year leases deposit of 3 months rent or a bank of the space. In buildings that are
France
incorporating break options guarantee are necessary to in multiple occupational, the
(depending on the covenant on complete the lease depending on tenant obligations are generally
Germany
offer) are typical in Ireland. Break strength of covenant. internal repair, maintenance and
options are more likely to be insurance (IRI) while landlord Greece
granted in a depressed market. Right of Renewal: On the basis obligations are external repairs,
Lease lengths have shortened in that tenants occupy premises for maintenance and insurance. Hungary
recent years and break options a period in excess of 5 years, they The landlord will charge these
are commonplace (particularly have an automatic right of costs to the tenant through the Ireland
for office & industrial/logistic renewal by law on expiry of the service charge.
Italy
lettings) in the current market. lease and can apply for a new
lease on similar terms as the Subletting: Generally subletting
Latvia
Rent Escalation/Rent Review: original one. Under new is allowed with the written
Rent will be subject to an upward legislation, both parties can now consent of the landlord, such Lithuania
only review. This clause is usually agree to contract out of this consent not to be unreasonably
every 5 years but in rare protection by signing a Deed of withheld or delayed. The Luxembourg
instances can be other periods Renunciation. subtenant is normally required to
such as every 7 years, although sublet at a rent not less than the Netherlands
this tends to be a historic feature Break Options and Terminations: passing rent, however can sublet
Norway
of the market. The new rent will Options are negotiable depending at a rent higher than the passing
be agreed between the parties on market circumstances and the rent.
Poland
and is based primarily on open quality of the tenant’s covenant.
market lettings and secondly, on In other instances breaks at Portugal
rent review evidence. If intervals of 5 years can be
agreement cannot be reached, an negotiated, these are subject to Romania
arbitrator or independent expert written notice and may be subject
will be appointed to set the new to payment of monetary penalties. Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 64
United Kingdom
Austria
Belgium
Bulgaria
Ireland Cyprus
Czech Republic
Legal Environment Concerning Service Charge: Building service • Freehold – Fees for the sale or
Brokerage Law charges are quoted in Euros per purchase of freeholds are Denmark
Commercial agents need to be square metre per annum and are based on 1.5% of the purchase
registered to practice in Ireland paid quarterly in advance along price. This percentage may be Estonia
and must hold an auctioneers with the rent. increased for small properties
Finland
licence. The Auctioneers and or reduced for larger
House Agents Acts 1947-1973 Local Property Tax (Commercial instructions. Fees will also
France
govern brokerage in Ireland. Business Rates): These municipal depend on the location of the
taxes are assessed on a property, with regional
Germany
Agents are normally appointed by percentage of the notional rental properties sometimes
both sides (landlord and tenant) value of the space and paid commanding higher fees. Greece
in a transaction and each side will directly to the local council by the • Subletting – Same as leasing.
pay their own agents fees. Agents tenant, normally on a semi- Hungary
will generally act in an advisory annual basis. Property Transfer Tax (Stamp
capacity initially and then Duty): For the purchase of a Ireland
negotiate on behalf of the client, Acquisition Costs property, the buyer will be
Italy
on the client’s instructions. It is Typical acquisition costs that a responsible for paying a property
considered to be a conflict of company will have to pay when transfer tax of 6%, which is based
Latvia
interest if the same broker buying or leasing new premises on the purchase price of the
represents both the landlord and include: property. Lithuania
the tenant. The Royal Institution
of Chartered Surveyors (RICS) Agents Fees Value Added Tax: The current Luxembourg
regulations require that both • Leasing – Fees are usually 10% VAT rate in the Ireland is 21.5%
parties must be notified if a – 15% of the first year’s rent. and is payable on rent, building Netherlands
conflict exists. For larger or higher value service charge, agents fees and
Norway
instructions this percentage legal costs.
Occupancy Costs can be negotiated as
Poland
The following charges are payable appropriate and are subject to
by the tenant: written agreement. Fees will Portugal
also depend on the location of
Rents: Rents are quoted in Euros the property, with regional Romania
per square metre per annum and properties sometimes
are paid quarterly in advance. commanding higher fees. Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 65
United Kingdom
Austria
Belgium
Bulgaria
Ireland Cyprus
Czech Republic
General Market Practices Fit Out/Reinstatement/ Holidays
Basis of Measurement: The Dilapidations: New office August and December are the only Denmark
measurement of buildings in developments are provided by the periods in the year when holidays
Ireland is governed by the SCS landlord with raised floors, floor will affect the speed of projects. Estonia
Code of Measuring practice boxes to a ratio of 1:10 square There are also a number of Bank
Finland
(currently under review). This metre, suspended ceilings, holidays. These fall on Mondays,
document defines what should recessed light fittings and air and are in May, June, August,
France
and should not be included. conditioning. The tenant will October and the Friday and
typically be responsible for Monday at Easter. Some
Germany
• Office Accommodation – City providing internal partitioning, professionals also take holidays
centre properties are cabling, carpeting, security and around the Easter weekend as Greece
measured on a net internal facilities such as reception areas, most schools are on holidays (Mid
basis (NIA). This is the “carpet post rooms and kitchens. When Term break). Hungary
area” and excludes ancillary vacating premises, the tenant is
space such as toilets, responsible for reinstating the Ireland
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 66
United Kingdom
Austria
Belgium
Bulgaria
italy Cyprus
Czech Republic
Rome Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 58,435
Surface area (km²) 301,000
Germany
Density (per km²) 194
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Rome 2,648,843 Portugal
Milan 1,305,591
Naples 1,046,987 Romania
Turin 921,485
Palermo 689,349 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 67
United Kingdom
Austria
Belgium
Bulgaria
Italy Cyprus
Czech Republic
Political Structure Transport
Italy is a parliamentary republic with a president as The principle international airports are to be found Denmark
head of state elected for a 7 year term by in Rome and Milan. Rome’s Fiumicino Airport (www.
parliament. The state of Italy consists of twenty adr.it), also known as Leonardo Da Vinci, is located Estonia
regions with governing powers and five of these 26 kilometres south west of the city centre. There is
Finland
Sardinia, Sicily, Trentino-Alto Adige, Valle d’Aosta, an express rail service direct to Termini central
and Friuli-Venezia Giulia have some degree of station that takes 15 minutes to reach the city
France
autonomy. In practice the Italian state remains centre. Details can be obtained at www.
highly centralised with legislative power remaining ferroviedellostato.it
Germany
with parliament. The parliament is bicameral and
consists of the Chamber of Deputies (Camera dei Milan has two airports. Milan Linate International Greece
Deputati) and the Senate (Senato della Repubblica). Airport (www.sea-aeroportimilano.it) that is located
Legislation can be issued by either house but to gain 7 kilometres east of Milan. The airport is connected Hungary
assent must pass in both houses. to the city via bus and taxi services. Milan Malpensa
International Airport (www.sea-aeroportimilano.it) is Ireland
Holders of an EEA (EU Member States, Iceland, Further country information can be obtained from
Serbia
Liechtenstein and Norway) or Swiss passport do the Invest in Italy bureau:
not require a visa. Nationals from EU-countries as www.invitalia.it
Slovakia
well as Switzerland and Liechtenstein may also
enter without a visa. Citizens of the United States of Spain
America do not require a visa for entry. A residence
permit is required if intending to stay for a period Sweden
exceeding 3 months obtained from the local
Italian authorities. Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 68
United Kingdom
Austria
Belgium
Bulgaria
Italy Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: According to Legal Environment Concerning
Legislation: The statue law that Italian law leases are Brokerage Law Denmark
governs leases is based on Italian automatically renewable for In Italy the agents of real estate
Law ex lege 392/78 and additional 6 year terms at the consultants must be registered by Estonia
subsequent amendments. same rent (plus ISTAT increases). the local trade chamber after
Finland
Longer renewal periods can be passing its examination. After
Lease Length: Leases must legally negotiated. registration the agent obtains the
France
be at least 6 years in length. official licence to operate that is
Leases are therefore generally for Break Options and Terminations: essential in order to be paid. In a
Germany
6 year terms with an automatic This does not legally have to be real estate company the licence
renewal period for the tenant of provided but it can be agreed belongs to the manager who then Greece
an additional 6 years. upon between the landlord and delegates the other members of
tenant. In this case, the tenant the company to operate. Hungary
Lease contract: There is no can have the right to terminate
standard form of lease contract in the lease with 12 months prior Agents work in several different Ireland
Italy. The form of lease is typically written notice as long as it is ways with clients:
Italy
dictated by the landlord and will specified in advance in the lease a) having an “exclusive
often be specific to each contract. instruction” (incarico in esclusiva)
Latvia
individual landlord (with some from the landlord who authorises
general articles required by laws). Tenant and Landlord Obligations: the service provider to sell or let Lithuania
Tenant obligations are usually the a property. In this case the agent/
Rent Escalation/Rent Review: ordinary maintenance and annual company is paid by the landlord. Luxembourg
Rents are linked to the ISTAT Cost services charges. The landlord Every other agent who wants to
of Living Index and will be provides the extraordinary fill the building with a client Netherlands
usually six months rent or a bank who want to get in contact with
Serbia
guarantee for the deposit period is the client in order to propose
necessary to complete the lease. other buildings.
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 69
United Kingdom
Austria
Belgium
Bulgaria
Italy Cyprus
Czech Republic
c) without instruction. In this case Acquisition Costs Property Transfer Tax (Stamp
agents have to ask the “official” Typical acquisition costs that a Duty): Asset deal: Sales of Denmark
agent in charge of the building or company will have to pay when commercial real estate carried
the client for the right to co- buying or leasing new premises out by VAT-taxable persons are Estonia
operate. This leaves the possibility include: exempt from VAT unless: (a) the
Finland
that the building will be offered seller is a construction company
directly to any clients of the Agents’ fees that built or renovated the
France
asking agent. • Leasing – Fees are 10% up to relevant property not more than
12% of the net annual rent four years prior to the sale; (b) the
Germany
Occupancy Costs (“canone a regime”) to be paid buyer is a VAT-taxable person
The following charges are payable by the two parties (Tenant with a limited right to reclaim VAT Greece
by the tenant: and Landlord), except where (e.g. banks or insurance
the agent receives an companies with a VAT Hungary
Rents: Rents are quoted in Euros exclusive instruction from the deductibility percentage equal to
per square metre per annum and client the fee from the other or below 25%); (c) the buyer is a Ireland
paid quarterly in advance. Value party is not given.In this case, consumer; (d) the seller expressly
Italy
Added Tax and services charges the agents’ fees come only elected to subject the transaction
are never included in the rate from the client. to VAT in the sale and purchase
Latvia
price. In the contract areas are • Freehold – usually for a agreement. VAT can be reclaimed.
specified as rooms rather than property acquisition the fees Lithuania
square metres. are paid by both parties Value Added Tax: The VAT rate in
(vendor and purchaser) with a Italy is 20% and is due on all Luxembourg
Service Charge: Building service percentage from 1% to 2% of forms of transactions including
charges are quoted in Euros per the sale price from each party. rent, building service charge, Netherlands
annum and paid quarterly in In case of a larger purchase agents fees. It is never included in
Norway
advance. They are based on an the percentage can decrease the price.
estimated budget that will be below 1%. In case of “co-
Poland
adjusted with the effective costs operation” with another Other Taxes/Costs: Transactions
at the end of the year. agency each will be paid by subject to VAT are also liable for Portugal
their client. the following additional transfer
Local Property Tax: Paid by the • Subletting – subject to taxes: (a) registration tax at a Romania
landlord (Imposta Comunale sugli agreement with the first fixed amount of EUR 168; (b) 1%
Immobili). Some other local taxes tenant (10–12% of annual year cadastral tax; and (c) 3% Russia
have to be paid directly by the rent or a percentage of the mortgage tax. Taxes are reduced
Serbia
tenant (ex. “tassa rifiuti”). savings obtained). to 2% (one-half) for transactions
• Renewals – usually renewed involving real estate funds, or for
Slovakia
lease contracts are signed those transactions which involve
directly by the landlord with leasing companies, banks and Spain
the tenant without agency financial intermediaries.
involvement. Registration, mortgage and Sweden
• Lease Renegotiation – 5% of cadastre taxes are not
the net annual rent (“canone a recoverable. The cost for the Switzerland
United Kingdom
Austria
Belgium
Bulgaria
Italy Cyprus
Czech Republic
notary deed is the responsibility Fit Out/Reinstatement/
of the purchaser. The fee of the Dilapidations: New office Denmark
Notary has to be agreed with the developments include suspended
purchaser with regard to the ceilings, fluorescent lighting, Estonia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 71
United Kingdom
Austria
Belgium
Bulgaria
Latvia Cyprus
Czech Republic
Riga
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 2,287
Surface area (km²) 64,589
Germany
Density (per km²) 35.4
Local currency Lat Greece
Net direct foreign investment (US$ millions) 1,491 1,912 1,600 450
Labour Force (millions) 1.2 1.2 1.2 1.2 Latvia
Norway
Major Cities
Poland
City Core Population
Riga 792,508 Portugal
Daugavpils 114,980
Romania
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 72
United Kingdom
Austria
Belgium
Bulgaria
Latvia Cyprus
Czech Republic
Political Structure Transport
Latvia is a parliamentary republic with a mostly The largest and most central airport in Latvia is Riga Denmark
ceremonial president as head of state. The president International Airport (www.riga-airport.com) about 8
is elected by the parliament to serve a four year kilometres south-west from the city centre. Access Estonia
term. Legislative power is exercised through the to the city is by bus, or taxi.
Finland
unicameral parliament (Saeima).
Latvia has a rail service that connects the major
France
Legal Structure urban areas in Latvia and is run by Latvian State
The Latvian legal structure is based on the civil law Railways (www.ldz.lv). Information on rail
Germany
system although it has influenced by socialist legal timetables and destinations can be obtained from
traditions and practices. The judicial structure is the website. Greece
organised at the bottom level with district courts
that deal with hear administrative, civil and criminal International Dialling Code Hungary
cases. Regional courts receive and deal with appeals The country code is + 371
from district courts. The highest court is the Ireland
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 73
United Kingdom
Austria
Belgium
Bulgaria
latvia Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Legal Environment Concerning
Lease Length: Leases between 3 The tenant has no right by law to Brokerage Law Denmark
and 5 years are typical, but an prematurely terminate the lease. There are no certain laws on
unlimited lease may be agreed. Break options can be agreed in brokerage. There are brokers Estonia
Older agreements contain early rental agreements. A typical associations that grant
Finland
termination clauses with a typical break option is the termination of certificates based on exams.
6 month announcement time. the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
Rent Escalation/Rent Review: landlord and tenant to agree to The following charges are payable
Germany
Rent escalations apply to leases an early termination depending by the tenant:
longer than 2 years, or for an on the market conditions and the Greece
indefinite term, and are typically specific nature of the lease. Rents: Rents are quoted in local
linked to the Consumer Prices currency on a square metre per Hungary
Index (or a percentage of CPI) and Tenant and Landlord Obligations: month basis and are paid on a
are adjusted annually. Rent The landlord is usually monthly basis. Typically Ireland
reviews are upward adjustment responsible for external building agreements contain exchange
Italy
only. maintenance and technical rate protection clauses against
installations and the tenant is currency devaluation risks.
Latvia
Guarantee and Security Deposit: responsible for internal
Rent deposits and/or bank maintenance. The landlord is also Service Charge: Building service Lithuania
guarantees of 3–6 months rent responsible for insurance of the charges are quoted in local
are usually required from building and land tax but in single currency, on square metre per Luxembourg
prospective tenants. tenant properties the tenant may month basis and are paid monthly
sometimes be required to insure with the rent. These charges Netherlands
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 74
United Kingdom
Austria
Belgium
Bulgaria
latvia Cyprus
Czech Republic
Acquisition Costs General Market Practices Holidays
Typical acquisition costs that a Basis of Measurement: For office Peak holiday season is during the Denmark
company will have to pay when premises, the normal summer months from mid-June to
buying or leasing new premises measurement of area used to mid-August, when transaction Estonia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 75
United Kingdom
Austria
Belgium
Bulgaria
Lithuania Cyprus
Czech Republic
Denmark
Vilnius
Estonia
Finland
Country Statistics
France
Population (thousands) 3,394
Surface area (km²) 65,300
Germany
Density (per km²) 52.0
Local currency Litas Greece
Net direct foreign investment (US$ millions) 1,551 1,334 1,000 900
Labour Force (millions) 1.6 1.6 1.6 1.6 Latvia
Norway
Major Cities
Poland
City Core Population
Vilnius 578,334 Portugal
Kaunas 414,174
Klaipėda 202,528 Romania
Panevėžys 133,638
Šiauliai 146,800 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 76
United Kingdom
Austria
Belgium
Bulgaria
Lithuania Cyprus
Czech Republic
Political Structure Transport
Lithuania is a parliamentary republic with directly Vilnius International Airport (www.vilnius-airport.lt) Denmark
elected president as head of state who serves a 5 is the principle airport for the country and it is
year term. The Lithuanian parliament (Seimas) is located 7 kilometres south of the city centre. It is Estonia
unicameral with executive power resting with the connected to the city via a train service.
Finland
Council of Ministers that is comprised of the
president, prime minister and the cabinet. The country’s main cities are connected via railways
France
services with timetable details obtainable from SC
Legal Structure Lithuanian Railways (www.litrail.lt/wps/portal).
Germany
The Lithuanian legal system is based on civil law
system with influences from French, German and International Dialling Code Greece
Dutch legal systems. The judiciary consists of local The country code is + 370
courts, district courts and the Court of Appeal. Hungary
Coordinated Universal Time (UTC) + 2 hours
Hours of Business Eastern Standard Time + 7 hours Ireland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 77
United Kingdom
Austria
Belgium
Bulgaria
Lithuania Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Legal Environment Concerning
Lease Length: Leases between 3 The tenant has no right by law to Brokerage Law Denmark
and 5 years are typical, but an prematurely terminate the lease. There are no certain laws on
unlimited lease may be agreed. Break options can be agreed in brokerage. There are brokers Estonia
Older agreements contain early rental agreements. A typical associations that grant
Finland
termination clauses with a typical break option is the termination of certificates based on exams.
6 month announcement time. the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
Rent Escalation/Rent Review: landlord and tenant to agree to The following charges are payable
Germany
Rent escalations apply to leases an early termination depending by the tenant:
longer than 2 years, or for an on the market conditions and the Greece
indefinite term, and are typically specific nature of the lease. Rents: Rents are quoted in local
linked to the Consumer Prices currency on a square metre per Hungary
Index (or a percentage of CPI) and Tenant and Landlord Obligations: month basis and are paid on a
are adjusted annually. Rent The landlord is usually monthly basis. Typically Ireland
reviews are upward adjustment responsible for external building agreements contain exchange
Italy
only. maintenance and technical rate protection clauses against
installations and the tenant is currency devaluation risks.
Latvia
Guarantee and Security Deposit: responsible for internal
Rent deposits and/or bank maintenance. The landlord is also Service Charge: Building service Lithuania
guarantees of 3–6 months rent responsible for insurance of the charges are quoted in local
are usually required from building and land tax but in single currency, on square metre per Luxembourg
prospective tenants. tenant properties the tenant may month basis and are paid monthly
sometimes be required to insure with the rent. These charges Netherlands
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 78
United Kingdom
Austria
Belgium
Bulgaria
Lithuania Cyprus
Czech Republic
Acquisition Costs General Market Practices Holidays
Typical acquisition costs that a Basis of Measurement: For office Peak holiday season is during the Denmark
company will have to pay when premises, the normal summer months from mid-June to
buying or leasing new premises measurement of area used to mid-August, when transaction Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 79
United Kingdom
Austria
Belgium
Bulgaria
Luxembourg Cyprus
Czech Republic
Denmark
Estonia
Finland
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 Latvia
Norway
Major Cities
Poland
City Core Population
Luxembourg City 77,400 Portugal
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 80
United Kingdom
Austria
Belgium
Bulgaria
Luxembourg Cyprus
Czech Republic
Political Structure Transport
The Grand Duchy of Luxembourg is a constitutional Luxembourg airport (www.lux-airport.lu) is the main Denmark
hereditary monarchy with a parliamentary system airport for Luxembourg and located about 6
of government. Notional executive power authority kilometres to the north east of the city centre. It is Estonia
lies with the Grand Duke but actual executive linked via bus and taxi.
Finland
authority lies with the Prime Minister and the
cabinet in parliament. The unicameral legislative Luxembourg City is linked by rail to most major
France
assembly is called the Chamber of Deputies European countries, with short connection to
(Chambre des Députés). Brussels and then to Eurostar for international
Germany
service. Société Nationale des Chemins de Fer
Legal Structure Luxembourgeois or CFR (http://www.cfl.lu/) is the Greece
Luxembourg’s legal structure is based on civil law national railway operator of Luxembourg.
system and consists of judicial courts and tribunals. Hungary
These include three lower tribunals, 2 district courts International Dialling Code
and Supreme Court of justice to deal with appeals The country code is + 352 Ireland
and cassation.
Italy
Coordinated Universal Time (UTC) + 1 hour
Hours of Business Eastern Standard Time + 6 hour
Latvia
The main business hours are Monday to Friday
08:00am–12.00pm, 13.00–17:00pm. Invest in Bureau Lithuania
Further country information can be obtained from
Visas Luxembourg Board of Economic Development: Luxembourg
Luxembourg is a member of the Schengen area www.bed.public.lu
agreement. Holders of an EEA (EU Member States, Netherlands
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 81
United Kingdom
Austria
Belgium
Bulgaria
LUXEMBOURG Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Occupancy Costs
Legislation: The law that governs Many leases contain break The following charges are payable Denmark
leases in Luxembourg is the Act of options, usually after 3 or 6 years by the tenant:
14 February 1955 and subsequent on longer leases, although this is Estonia
amendments from 1987 and only market convention. These Rents: Rents are quoted in Euros
Finland
1992. options may be for either or both per square metre per month plus
parties and should generally be VAT when applicable (15%) and
France
Lease Length: The standard term exercised by registered mail at are paid quarterly or monthly in
for regular occupation of leased least between six to twelve advance.
Germany
premises is 3, 6 or 9 years. months prior to the lease expiry
date. Service Charges: Building service Greece
Rent Escalation/Rent Review: charges are quoted in Euros per
Rent is adjusted annually based Tenant and Landlord Obligations: square metre per month and are Hungary
on the Cost of Living Index The landlord is responsible for paid monthly or quarterly in
published by the local statistic major repairs, the details of which advance, based on a provisional Ireland
governmental body “STATEC” at are foreseen by the legislation. amount, which is adjusted once
Italy
the anniversary date of the lease Building maintenance and the actual cost is known at the
contract. The indexation of rents insurance is paid by the landlord end of the year.
Latvia
is never negative so the rental and re-invoiced to the tenant.
price will not decrease even if Tenants are responsible for Local Property Tax: This tax is Lithuania
there is a deflation. contents insurance and assessed on a percentage of the
maintenance of their premises. notional value of the building and Luxembourg
Guarantee and Security Deposit: (Almost triple net contract.) paid by the landlord on an annual
Landlords usually require basis. This cost is often passed on Netherlands
information from prospective Subletting: The tenant is not to the tenant via the service
Norway
clients such as company statutes permitted to sublet the premises charges or via separate invoice.
and latest balance sheet. without written consent from the
Poland
Landlords usually accept a bank landlord unless sublet to a parent
guarantee instead of a deposit company of the tenant. Consent Portugal
equivalent to either 3 or 6 months should not to be unreasonably
of rent, depending on the quality withheld unless it has been Romania
of the tenant. otherwise specified in the lease.
Russia
Ukraine
BNP par i b as rea l estate 82
United Kingdom
Austria
Belgium
Bulgaria
LUXEMBOURG Cyprus
Czech Republic
Acquisition Costs Value Added Tax: VAT in Holidays
Typical acquisition costs that a Luxembourg is currently at 15% There are no times of the year in Denmark
company will have to pay when and is payable on all rent which the speed of transactions
buying or leasing new premises payments (when applicable) as are reduced due to holidays. In Estonia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 83
United Kingdom
Austria
Belgium
Bulgaria
Netherlands Cyprus
Czech Republic
Amsterdam
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 16,346
Surface area (km²) 41,000
Germany
Density (per km²) 401
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Amsterdam 729,171 Portugal
Rotterdam 592,669
The Hague 440,919 Romania
Utrecht 233,193
Eindhoven 200,803 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 84
United Kingdom
Austria
Belgium
Bulgaria
Netherlands Cyprus
Czech Republic
Political Structure Transport
The Netherlands is a constitutional parliamentary The main international airport is Schiphol Denmark
monarchy. The legislature of the Netherlands States Amsterdam (www.schiphol.nl) that is located
General (Staten Generaal) is bicameral and consists 15 kilometres south west of Amsterdam. There are Estonia
of two chambers. The First Chamber’s (Eerste Kamer) other airports at Rotterdam and Eindhoven.
Finland
function is to review legislation enacted by the more
powerful Second Chamber (Tweede Kamer). The Netherlands has extensive network of buses,
France
trams and underground trains in the main cities plus
Legal Structure a railway system that connects the whole country.
Germany
Dutch legal structure is based on civil law system Amsterdam itself is served by eight stations of the
with strong influences from French civil code. Civil Nederlandse Spoorwegen (Dutch Railways) and Greece
and criminal justice is organised around 61 sub- serves as an international train station for journeys
district courts, 19 district courts, five Courts of to Belgium, France, Germany and Switzerland. Hungary
Appeal, and the Supreme Court of the Netherlands Travel details for rail journeys can be obtained from
as ultimate arbiter. Dutch Railways (www.ns.nl). Amsterdam’s internal Ireland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 85
United Kingdom
Austria
Belgium
Bulgaria
Netherlands Cyprus
Czech Republic
Typical Lease Terms The Dutch Council for Real Estate Guarantee and Security Deposit:
Legislation: The legislation (ROZ) has issued standard lease Landlords usually require Denmark
applicable to commercial lease contracts for retail and office information from prospective
contracts is Book 7 of the Dutch leases which are commonly used tenants such as banking details Estonia
Civil Code. The law broadly by all brokers. These standard and access to company
Finland
distinguishes the following three contracts can be extended with information. A bank guarantee of
categories: additional articles and clauses (at least) 3 months gross rent
France
that are either tenant-friendly or plus service charges are usually
• Residential (not being landlord-friendly. Professional required to complete the
Germany
discussed further) advice on this matter could save transaction.
• Business premises – retail future costs, mainly on Greece
(shops, canteens, showrooms, termination of a contract, but also Rights of Renewal: The ROZ
restaurants) when the landlord plans standard contracts are based Hungary
• Business premises – other redevelopment activities. upon a first lease period, which is
(offices, other less-location to be specified. After expiration of Ireland
bound activities) Lease Length: The usual term for this lease period, the contract is
Italy
regular occupation of leased renewed automatically for the
Dutch law provides for better premises is 5 years. In practice same (or different) period, unless
Latvia
protection mechanisms for retail every duration is possible varying the lease is terminated by the
tenants compared to offices. from an infinite lease that is tenant within a predefined term Lithuania
Rationale is that retail activities cancellable at short notice to a before the first expiration date.
are heavily dependent upon their 20-year plus lease. This termination period is usually Luxembourg
location. As the law is not 100% 12 months, but could be different.
precise on all matters, it is Rent Escalation/Rent Review: After the second renewal period, Netherlands
strongly recommended to seek Usually the rent level is adjusted the lease can be automatically
Norway
professional advice in case of annually, based on the Consumer renewed or will have to be
potential disputes on cancellations Price Index (CPI), published by renewed through negotiations.
Poland
or extensions of contracts. the Dutch Centre for Statistics Dutch law is very flexible, and the
(CBS). In practice, deviations renewal right can also be Portugal
can be agreed upon, such as formulated as an option
fixed rents, capped indexation, exclusively for the tenant. Older Romania
fixed indexation and variable contracts (before the ROZ
turnover rent. standards became widespread) Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 86
United Kingdom
Austria
Belgium
Bulgaria
Netherlands Cyprus
Czech Republic
Break Options and Terminations: Occupancy Costs Acquisition Costs
The formulation of the term The following charges are payable Typical acquisition costs that a Denmark
“renewal”, “extension”, “break by the tenant: company will have to pay when
option” and “termination” is vital buying or leasing new premises Estonia
for the interpretation of whether Rents: Rents are usually quoted in include:
Finland
it is an exclusive right for the Euros per square metre per
tenant, or for both parties. This is annum and are paid in advance on Agents Fees
France
especially important if the rent a monthly, quarterly, or • Leasing – Fees are negotiable
level is significantly above or (bi)annually basis. and subject to the length of
Germany
below market level, or if the the first lease period and the
property can be redeveloped. Service charges: Building service height of the annual rent. The Greece
Because of this importance of charges are quoted in Euros per typical rate being between 12
formulation, it is advisable to square metre per annum and are -20% of the first year’s net Hungary
have the Dutch language contract prepaid together with the rent in rent for contracts between 5
prevail in the case of any disputes advance, based on a provisional and 10 years. Fees are paid by Ireland
but this is not mandatory. amount. Settlement occurs on an the landlord or by the tenant
Italy
annual basis. depending on whom the agent
Tenant and Landlord Obligations: represents.
Latvia
The landlord usually is Local property tax (“Onroerende • Transactions – Freehold fees
responsible for external repairs zaak belasting”): This tax is are usually paid by the seller Lithuania
and the replacement of major assessed on a percentage of the and negotiated on a case-by-
installations such as boilers, legal market value (“WOZ-value”) case basis but is typically Luxembourg
HVAC and elevators. Building of the property and paid by the between 1.5 – 2% depending
maintenance (not replacements) landlord on an annual basis. on the sale price and the Netherlands
and insurance is paid by the Water and sewage tax is payable service package.
landlord and re-invoiced to the by the landlord and the charges • Subletting – Fees are to be
Norway
tenant (service charges). Tenants differ per region or municipality. negotiated but are usually the
Poland
are responsible for insurance and same as the leasing fees
maintenance of their assets. In above or based on a Portugal
practice, deviations from the percentage of the savings
above are possible, from a single- made through the early Romania
net to a triple-net contract. surrender of the lease.
Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 87
United Kingdom
Austria
Belgium
Bulgaria
Netherlands Cyprus
Czech Republic
Real Estate Transfer Tax Newly constructed properties • VVO (“Verhuurbaar Vloer
(“Overdrachtsbelasting”): For need to be leased subject to VAT Oppervlak”)- This is the most Denmark
the purchase of a property, the for a consecutive period of 10 commonly used area for
purchaser will be responsible for years in order for the construction calculating rent. It measures Estonia
paying a transfer tax of 6%. This VAT to be refundable. The tax will to the inside finished surface
Finland
may be recovered if the property be refunded upfront, but could be of the outer walls but does
is sold again within 6 months. repaid by the landlord if the not include core areas (lifts,
France
Constructions to avoid transfer property is leased to non-VAT vertical penetrations, common
tax are rare but not impossible, tenants. This so called revision landings), atria, or areas with
Germany
though usually require a syndicate period of 10 years revives fully less than 1.5 m headroom.
of non-related investors. (for another 10 years) if the Greece
property is sold before the end of Fit Out/Reinstatement/
Value Added Tax (“BTW”): VAT in that period. Tax consequences of Dilapidations: Office buildings Hungary
the Netherlands amounts to 19%. this revival can be immense, and are usually offered with carpet,
Leases are exempt from VAT, but need to be checked for any suspended ceilings, lighting, Ireland
can be voluntarily subject to VAT if potential transaction where this heating and mechanical and
Italy
the tenant is a VAT-paying issue could be apparent. electrical installations.
business. Usually it is in the Provisions can be in place to Partitioning and upgrading of the
Latvia
interest of both the tenant and prevent revival from occurring. office space usually is at the cost
landlord to apply for VAT-subject of the tenant, but this can be Lithuania
lease, as the VAT on all property General Market Practices negotiated.
related expenses and investments Basis of Measurement: In the Luxembourg
is tax deductible for the landlord. Netherlands standard (“NEN Retail properties usually
Banks and government 2580”) is applicable to define the are leased bare, without any Netherlands
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 88
United Kingdom
Austria
Belgium
Bulgaria
Norway Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 4,661
Surface area (km²) 324,000 Oslo Germany
Density (per km²) 14
Local currency Norwegian Krone Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Oslo 505,167 Portugal
Bergen 228,386
Trondheim 148,023 Romania
Stavanger 108,418
Russia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 89
United Kingdom
Austria
Belgium
Bulgaria
Norway Cyprus
Czech Republic
Political Structure Transport
Norway is a constitutional parliamentary monarchy. Aviation is an important means of transport Denmark
The hereditary monarch is head of state but power is within Norway given its shape and latitude so there
exercised through the Norwegian parliament (the are around 98 regional airports, 50 of which are Estonia
Storting) that is unicameral. Although unicameral, it public owned by the state operator Avinor. The main
Finland
is divided into two chambers, the Odelsting and the international airport is Oslo Airport Gardermoen
Lagting. The Lagting’s acts as an upper chamber to (www.osl.no/en/osl) that is located around 50
France
the Odelsting lower chamber, where legislation kilometres northeast of the city centre. Access to
originates, but in practice the passage of legislation the airport is by taxi, bus or by express train
Germany
is a combined act. (www.flytoget.no/eng).
Greece
Legal Structure The Norwegian National Rail Administration
Norway’s legal structure is a mixture of civil law (www.jernbaneverket.no) operates the network of Hungary
system and common law traditions. The hierocracy trains that connect the principle cities of Norway.
of Norway’s regular courts starts with the district Timetables for passenger travel can be obtained Ireland
courts at the bottom, city and county courts, the from state owned passenger company Norges
Italy
appellate courts, labour courts (for industrial Statsbaner (NSB) (www.nsb.no/home). Oslo itself
disputes) and the conciliation councils (for mainly operates a network of tramways (www1.trafikanten.
Latvia
civil disputes). The highest court is the Supreme no/) and a rapid transit system called the Oslo
Court. T-bane (www.tbane.no). Lithuania
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 90
United Kingdom
Austria
Belgium
Bulgaria
Norway Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Legal Environment Concerning
Legislation: Commercial In leases where the term is Brokerage Law Denmark
contracts are governed by the specified, the lease automatically There is no requirement in
Real Property Code, which mainly expires and requires Norway for agents to be licensed Estonia
aims to protect the rights of renegotiation. In situations where or authorized in order to negotiate
Finland
residential tenants but it also the lease term is not specified, real estate transactions.
stipulates regulations for the lease term is considered to be Historically agents have
France
commercial properties. ongoing until either the tenant or represented landlords only, but
landlord gives notice of recently corporate occupiers have
Germany
Lease Length: Typically the term termination as set out in the lease begun to utilize consultants to
of a lease is not specified and is terms. The landlord is not protect their interests in Greece
expected to be ongoing. Generally allowed to terminate an ongoing negotiations. It is always
the tenant and the landlord will lease unless the tenant does not advisable when dealing with Hungary
agree to an interminable period meet its covenants. If the agents in Norway to enter into a
whereby the lease will be landlord terminates the lease written contract defining the Ireland
guaranteed. However, specified prematurely he is liable for duties to be carried out by the
Italy
terms of 5 and 10 years are compensation to the tenant. agent, including fees, deadlines
increasingly common. and scope of work.
Latvia
Tenant and Landlord Obligations:
Rent Escalation/Rent Review: Landlords are responsible for “Open bidding” sales are common Lithuania
Rents are indexed annually to the external repairs and building when a property is being sold. As
Consumer Price Index. maintenance including technical the name implies, all offers are Luxembourg
installations, surface of floors, openly known by all interested
Guarantee and Security Deposit: walls, and ceilings. The tenant is parties. This process is very Netherlands
Landlords usually require responsible for maintenance and similar to an open auction. Other
Norway
information from prospective insurance of the internal less common methods used to
tenants such as banking details premises. sell property is a “closed bidding”
Poland
or access to company information. process and options for select
A deposit of 3 – 6 months gross Subletting: Generally, subletting buyers to place offers. Portugal
rent is typically necessary to is allowed with the written
complete the lease. consent of the landlord and it Occupancy Costs Romania
should not be unreasonably The following charges are payable
Rights of Renewal: The tenant withheld or delayed. by the tenant: Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 91
United Kingdom
Austria
Belgium
Bulgaria
Norway Cyprus
Czech Republic
Service Charge: Sometimes this is Property Transfer Tax (Stamp Use of Space: In buildings
quoted within the rental figure. Duty): During the purchase of a refurbished or constructed in the Denmark
This includes heating, water, property the purchaser will be ‘70’s – ‘80’s premises utilize
electricity, cleaning of common responsible for paying a Stamp cellular offices. Recent demand Estonia
areas and snow removal based Duty equal to 2.5% of the purchase however has been for open
Finland
upon a provisional amount, which price. concept office premises or
is adjusted once the actual cost is premises containing demountable
France
known at the end of the year. Value Added Tax: The VAT in partitioning systems.
Norway is 25 percent. Most
Germany
Local Property Tax: The local industries have a VAT duty; the Holidays
property tax depends on the exceptions are the bank/finance Summer holidays, which are taken Greece
geographical location of the and the public sector. Landlords from July to the second week of
building. It is normally paid by the should make sure that they are August, create a period of slowed Hungary
landlord, but in some cases the registered for leasing and that the activity and few transactions are
tenant covers this cost. tenants are VAT registered. completed in this time. Other Ireland
equal to 15% of the first year’s from the exterior of the building assistance in the preparation of
Norway
net annual rent. Typically to the midpoint of subdividing this country review.
each party pays their walls. The area used to calculate
Poland
respective contracted agent. rent will also typically include a
• Freehold – Fees are usually share of common areas such as Portugal
paid by the seller and are entrances, staircases, elevators,
negotiated depending on the and corridors. Romania
size of the property. Typically
fees will be between 0.5% – Fit Out/Reinstatement/ Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 92
United Kingdom
Austria
Belgium
Bulgaria
Poland Cyprus
Czech Republic
Warsaw
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 38,312
Surface area (km²) 313,000
Germany
Density (per km²) 122
Local currency Zloty Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Warsaw 1,615,382 Portugal
Łódź 803,375
Kraków 739,954 Romania
Wroclaw 637,232
Poznań 577,523 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 93
United Kingdom
Austria
Belgium
Bulgaria
Poland Cyprus
Czech Republic
Political Structure Transport
Poland is a parliamentary democracy with a The principle international airport is Warsaw’s Denmark
president as head of state who is directly elected to Frederic Chopin Airport (www.lotnisko-chopina.pl)
serve a 5 year term. The Polish parliament is that is located 10 kilometres south west of Warsaw. Estonia
bicameral and composed of two chambers, the Connections to the city are via bus service and taxi.
Finland
higher chamber called the Senate and the lower
chamber called the Sejm where legislation Warsaw has an extensive bus and tram service that
France
originates. Poland also has influential regional is run by the Warsaw Transport Authority (www.ztm.
governments (Sejmik) that administer the country’s waw.pl). There are some suburban lines and rail
Germany
16 regions (Voivodships). lines that connect Warsaw to other Polish cities such
as Krakow and Gdansk. Warsaw’s rail strength is as Greece
Legal Structure international rail terminus that connect routes
Poland’s legal structure is based on a mixture of civil between western and eastern Europe. Many rail Hungary
law (influenced by French Civil Law) and some services European destinations to Poland via the
legacy Communist legal theory that is being altered. railways run by the Polish State Railway (PKP) Ireland
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 94
United Kingdom
Austria
Belgium
Bulgaria
Poland Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: Leases will Subletting: It is stated in the Civil
Legislation: The Civil Code terminate at the date of expiry Code that the tenant may sublet Denmark
governs leases in Poland. and usually must be renegotiated. part or the whole premise to a
If the option to extend was third party if the lease agreement Estonia
Lease Length: Typical leases used previously agreed, then the allows and the landlord agrees in
Finland
in Poland are 3 years (20% of all existing lease terms and rent will writing. If the subletting is agreed,
contracts), 5 years (70% of all continue for the new lease. the tenant and the third party are
France
contracts) and 10 years (5% of all both responsible to the landlord
contracts) Break Options and Terminations: for using the premises as detailed
Germany
Options are negotiable but a in the lease agreement. The
Rent Escalation/Rent Review: period of at least 3 years length is sublet will terminate at the date Greece
Rents are usually indexed generally asked for. Tenants of expiry of the lease agreement
annually based on the European should be aware of notice periods between the tenant and the Hungary
Union Consumer Price Index (CPI) as options will expire and become landlord.
if the rent is stated in Euros or the null and void if notice is not Ireland
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 95
United Kingdom
Austria
Belgium
Bulgaria
Poland Cyprus
Czech Republic
Legal Environment Concerning Acquisition Costs General Market Practices
Brokerage Law Typical acquisition costs that a Basis of Measurement: Net Denmark
It is a legal requirement to have a company will have to pay when Lettable Area or Building Owner’s
license in order to trade as a real buying or leasing new premises and Manager’s Association Estonia
Local Property Tax: Paid directly property. In case of acquiring present under the 5th edition,
Norway
by the landlord and included in shares of the company which referred to as EVS 2003. It
the service charges paid by owns an estate, the buyer is includes material on valuations
Poland
tenant. obliged to pay tax of 0.5% of the for securitisation purposes, the
value of the conveyance of shares. effect of market shock, corporate Portugal
governance and much expanded
Value Added Tax: The VAT rate in sections of the valuation of Romania
Poland is 22% and payable on all agricultural properties.
forms of transactions including Russia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 96
United Kingdom
Austria
Belgium
Bulgaria
Poland Cyprus
Czech Republic
The valuation report includes: the When letting second generation
instructions, time period, space, the landlord will generally Denmark
identification, basis of valuation, assume the costs of installing
compliance statement, condition partitioning according to a space Estonia
150 to 400 Euros per square first week of May, mid July to the
Norway
metre if the finishing is from end of August, and the second half
“shell & core”. Amounts exceeding of December.
Poland
the budget are borne by the
tenant. Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 97
United Kingdom
Austria
Belgium
Bulgaria
Portugal Cyprus
Czech Republic
Denmark
Estonia
Lisbon
Finland
Country Statistics
France
Population (thousands) 10,586
Surface area (km²) 92,000
Germany
Density (per km²) 115
Local currency Euro Greece
Net direct foreign investment (US$ millions) 4,340 -671 1,392 1,113
Labour Force (millions) 5.6 5.6 5.6 5.6 Latvia
Norway
Major Cities
Poland
City Core Population
Lisbon 563,210 Portugal
Porto 273,060
Amadora 188,450 Romania
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 98
United Kingdom
Austria
Belgium
Bulgaria
Portugal Cyprus
Czech Republic
Political Structure Transport
Portugal is parliamentary republic headed by a The three main international airports in Portugal are Denmark
president who is directly elected to serve 5 years. Lisbon Portela Airport (www.ana.pt/) that is located
The parliament is called the Assembly of the 7 kilometres to the north of the city centre; Estonia
Republic (Assembleia da Republica) and is Francisco Sá Carneiro Airport, Oporto that is located
Finland
unicameral. Mainland Portugal is organised around 11 kilometres north west of the city and Faro Airport
municipalities and districts that have limited powers 4 kilometres west of the city. Funchal in Madeira and
France
but the islands of Madeira and Azores operate as the Azores are also connected via air.
autonomous regions and have their own parliament
Germany
and administration. Lisbon has a well developed bus and tram system
plus a metro system Metro de Lisboa for Greece
Legal Structure transportation around the city. The Lisbon metro
The Portuguese legal system is based on civil law consists of four lines that radiate out to the north, Hungary
with strong influence from French and German civil northeast and northwest of the city. The metro is
law. The Portuguese court system begins with courts run by Metropolitano de Lisboa (www.metrolisboa. Ireland
of first and second instance (to deal with civil and pt). General transport detail about Lisbon can be
Italy
criminal matters) and a Supreme Court of Justice for obtained from Transporlis (www.transporlis.sapo.
final appeals. pt).Oporto also has a bus, tram and 5 line metro
Latvia
system that connects to the airport and is run by
Hours of Business Metro do Porto (www.metrodoporto.pt) Lithuania
The main business hours are Monday to Friday
09:00am – 13.00pm, 15.00pm – 19.00pm. The majority of the Portuguese railway system is run Luxembourg
by the state operator Caminhos de Ferro Portuguese
Visas (CP) (www.cp.pt) under the name Comboios de Netherlands
Portugal is a member of the Schengen area Portugal. The Portuguese train system has express
Norway
agreement. Holders of an EEA (EU Member States, links between Lisbon and Oporto and to the Algarve
Iceland, Liechtenstein and Norway) or Swiss during the peak tourist season. CP also operates a
Poland
passport do not require a visa. Nationals from EU- regional train system that links other cities in
countries as well as Switzerland and Liechtenstein Portugal. A regional train system operates Portugal
may also enter without a visa. Citizens of the United throughout the rest of the country linking up the
States of America do not require a visa for entry. A other major towns and there are international Romania
residence permit is required if intending to stay for a connections to France and Spain.
period exceeding 3 months from a Portuguese Russia
Slovakia
Coordinated Universal Time (UTC)
Eastern Standard Time + 5 hours Spain
www.investinportugal.pt
Turkey
Ukraine
BNP par i b as rea l estate 99
United Kingdom
Austria
Belgium
Bulgaria
Portugal Cyprus
Czech Republic
Typical Lease Terms Right of Renewal: On lease expiry Tenant and Landlord Obligations:
Legislation: The “new law” that the tenant has no security of Tenant obligations are internal Denmark
governs leases is based on the tenure. At expiry of the term both repair, maintenance and
law N° 321-B/90 of 15 October parties can terminate the lease. If insurance while landlord Estonia
1990 and the “old law” that neither party terminates the lease obligations are main structural
Finland
covered older leases cannot be it shall continue for a further repairs. Maintenance and
utilized anymore. period of one year. insurance is paid by the landlord
France
and re-invoiced to the tenant.
Lease Length: The new regulation Break Options and Terminations:
Germany
does not specify a lease term per Under the “new law” the tenant Subletting: The tenant is not
se and considers leases to be had the right to terminate the permitted to sublet the premises Greece
ongoing. There tends to be two lease subject to 90 days prior without written consent from the
standard options of short term written notice at any time. The landlord, not to be unreasonably Hungary
with a minimum 6 months and landlord did not have the right to withheld, or unless otherwise
long term with a minimum of 5 terminate the lease before the stated in the lease. Ireland
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 100
United Kingdom
Austria
Belgium
Bulgaria
Portugal Cyprus
Czech Republic
Legal Environment Concerning Local Property Tax (Autarquica): Value Added Tax: The current VAT
Brokerage Law This tax is assessed on a rate in Portugal is 20% and is Denmark
Each agent must be registered percentage (1.1-1.3%) of the payable on all forms of
and have a formal license from notional value of the building and transactions including service Estonia
AMI (association of property is paid by the landlord on an charges and agents fees, but is
Finland
developers). In accordance with annual basis. not paid on the sale or purchase
the law, an agent must have a of freeholds. It can be possible to
France
registered listing in order to be Acquisition Costs elect to not charge VAT on rent.
able to offer a property to a Typical acquisition costs that a This will vary from property to
Germany
tenant. By virtue of this listing, company will have to pay when property and will depend on the
the landlord authorises the agent buying or leasing new premises legal status of the landlord. Greece
to sell or let the property. include:
Other Taxes/Costs: For the Hungary
There is no standard listing Agents Fees purchase of a property, the
document, however, some of the • Leasing – Fees are typically purchaser will be responsible for Ireland
issues that need to be included in between 1 month net rent and notary fees.
Italy
each listing include a description 10% of the first year’s net
of the property, the job task, price rent. The landlord typically
Latvia
or rent, duration of the listing pays the agents fees.
(usually 6 months with 3 month • Freehold – Fees are paid by Lithuania
renewal periods) and agency fees. the seller and negotiated on a
case-by-case basis depending Luxembourg
Occupancy Costs on the purchase price. Fees
The following charges are payable are typically between 3-5% of Netherlands
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 101
United Kingdom
Austria
Belgium
Bulgaria
Portugal Cyprus
Czech Republic
General Market Practices Fit Out/Reinstatement/ Holidays
Basis of Measurement: In Dilapidations: Premises are There are certain times of the Denmark
Portugal there is no official basis typically provided to tenants with year in which the speed of
of measurement. The following raised floors, mechanical and transactions are reduced due to Estonia
terms are typically used to define electrical, and lighting but holidays (Christmas, Easter and
Finland
floor areas: tenants are responsible to summer holidays). In Portugal, the
perform their own fit out. Upon period from July through until the
France
• Construida – Measures gross lease expiry, the tenant is end of August is a peak holiday
area including the shell of the obligated to return the premises period. Many of the smaller
Germany
building. The “construida” is to the original condition it was in companies close down in August
equal to the sum of the areas upon initial occupancy. In whilst larger firms operate with Greece
of each floor of a building, practice, if the improvements are only a skeleton staff.
taking into account the bare of good quality and are in good Hungary
exterior of the walls and the condition, the landlord will Acknowledgement
finished floors. It encompasses request they are left in the We would like to thank Jean Freval Ireland
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 102
United Kingdom
Austria
Belgium
Bulgaria
Romania Cyprus
Czech Republic
Denmark
Estonia
Finland
Bucharest
Country Statistics
France
Population (thousands) 21,587
Surface area (km²) 238,391
Germany
Density (per km²) 90.6
Local currency New Lei Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Bucharest 2,016,131 Portugal
Iasi 348,070
Constanta 342,264 Romania
Cluj-Napoca 332,498
Galati 330,276 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 103
United Kingdom
Austria
Belgium
Bulgaria
Romania Cyprus
Czech Republic
Political Structure Transport
Romania is a parliamentary republic with a president The main international airport is Henri Coandă Denmark
as head of state who is directly elected for a five International Airport (www.otp-airport.ro) (formerly
year term. The Romanian parliament is bicameral known as Otopeni) located 12 kilometres to the Estonia
and consists of the 332 seat Chamber of Deputies north of Bucharest. The other major airport is Traian
Finland
(Camera Deputatilor) and the 137 seat Senate Vuia International Airport (www.aerotim.ro) located
(Senat). in Timişoara in the west of the country.
France
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 104
United Kingdom
Austria
Belgium
Bulgaria
Romania Cyprus
Czech Republic
Typical Lease Terms Guarantee and Security Deposit: Tenant and Landlord Obligations:
Legislation: The law that governs Landlords typically require a Normally the landlord is Denmark
lease contracts is based on the guarantee equivalent to 3 month responsible for building
Romanian Civil Code. Registration rent (cash deposit or bank maintenance, structural and Estonia
of a lease contract to the guarantee letter) from common area repairs, electro-
Finland
authorities of the Ministry of prospective tenants upon signing technical installation repairs
Finance is mandatory. Leases of the lease contracts. inside the lease premises, as well
France
longer than 3 years should be as other interior repairs not
registered with the Land Registry. Rights of Renewal: Most caused by the tenant. Usually the
Germany
It is not compulsory to use contracts include renewal maintenance expenses and
standard contracts; any form of options. Unless an option to additional services, such as Greece
contract is acceptable as long as renew was previously agreed, security, central reception are
it corresponds to Romanian leases will terminate at the date paid by the landlord and then re- Hungary
legislation. of expiry. If an option to renew invoiced to the tenant or included
was agreed, then the current in service charges. The building Ireland
Lease Length: The average lease lease terms and rent will be owner is also responsible for the
Italy
is 5 years, although 7-10 year renegotiated. payment of insurance and local
leases are more common for property taxes which are passed
Latvia
larger occupiers. Break Options and Terminations: on to tenants through service
Break options are uncommon charges. Tenant obligations are Lithuania
Rent Escalation/Rent Review: practices. Tenants who internal repairs and general
Typically, rents are indexed prematurely exit out a lease are maintenance within their Luxembourg
annually (upwards only) with the subject to heavy penalties. premises. The tenant pays for
European Union Consumer Price The penalty for early lease third-party insurance. Netherlands
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 105
United Kingdom
Austria
Belgium
Bulgaria
Romania Cyprus
Czech Republic
Legal Environment Concerning Occupancy Costs Acquisition Costs
Brokerage Law The following charges are payable Typical acquisition costs that a Denmark
Agents do not need to have a by the tenant: company will have to pay when
license in order to practice in buying or leasing new premises Estonia
earn a fee of half a month’s net including: electromechanical agreed purchase price.
rent from the tenant. The tenant’s systems, cleaning, air • Subletting – Same as leasing
Norway
Turkey
Ukraine
BNP par i b as rea l estate 106
United Kingdom
Austria
Belgium
Bulgaria
Romania Cyprus
Czech Republic
In case of asset deals performed On multi tenant buildings the provided by landlords. When
by companies, the income space occupied by the entrance letting second generation space, Denmark
obtained by the seller after the lobby, halls, restrooms and any the landlord will generally
dispose of the property becomes other common area are allocated assume the costs of installing Estonia
part of the total income of the to all tenants pro-rata along with partitioning according to a space
Finland
company quarterly recorded. If the exclusive area occupied by plan provided by the tenant.
the company obtains a profit after each tenant. Gross internal area
France
the deduction of the total excludes staircases, elevator Use of Space: Cellular offices,
expenses, this will be subject to a shafts and non-load bearing inner open plan floors and mixed plan
Germany
16% tax. walls. Outdoor terraces are not offices are all common in
included in the measurement of Romania. The most popular form Greece
In both cases the parties have to the premises for the calculation of of premises is open space floors
pay taxes to the National Agency rent for offices being quoted for cost reasons and flexibility in Hungary
for Cadastre and Land separately (generally half of the partitioning and use.
Registration and the notary fees. rent quoted for the usable area). Ireland
Holidays
Italy
Note: Please note that the above Fit Out/Reinstatement/ Summer holidays (mid-June-last
mentioned fiscal obligations are Dilapidations: Office buildings week of August) create a period of
Latvia
based on the provisions of the usually include: carpet, suspended slow activity and few transactions
currently enforced Fiscal Code (as ceilings, raised floors, lighting and are completed in this time. Other Lithuania
at January 2009) which is wiring, heating, mechanical and significant holiday periods when
expected to be amended in the electrical servicing. Raised floors transactions may be affected are Luxembourg
near future. and centralized cooling systems between mid December to early
are generally standard in new January and during Easter. There Netherlands
Value Added Tax: VAT (19%) is buildings. In a tenants’ market, are also a number of public
Norway
payable on rent and service the landlord may assume the cost holidays stipulated in the Labour
charges and is recoverable. of partitioning or a part of the Code: the 1st of May, the 1st of
Poland
cost. In a landlords’ market, these December and two other religious
General Market Practices costs are usually borne by the holydays. Portugal
Basis of Measurement: Landlords tenant.
use gross internal area (GIA) in Romania
square meters as the most All works, decorations,
common method of area installation, additions, and Russia
Turkey
Ukraine
BNP par i b as rea l estate 107
United Kingdom
Austria
Belgium
Bulgaria
Russia Cyprus
Czech Republic
Denmark
Estonia
Moscow
Finland
Country Statistics
France
Population (thousands) 142,487
Surface area (km²) 17,075,400
Germany
Density (per km²) 8.3
Local currency Rubles Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Moscow 8,297,056 Portugal
St Petersburg 4,678,102
Novosibirsk 1,400,328 Romania
Nizhny Novgorod 1,357,555
Yekaterinburg 1,267,393 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 108
United Kingdom
Austria
Belgium
Bulgaria
Russia Cyprus
Czech Republic
Political Structure and Domodedevo (www.domodedovo.ru), located
Russia is a federal republic that consists of 83 34 kilometres to south of the city. Both are connected Denmark
regions. The head of state is the president who is to the centre of Moscow by express railway.
directly elected to serve a four-year term (this St Petersburg’s Pulkovo Airport (www.pulkovo.ru) Estonia
structure is currently being revised). The president is located 17 kilometres to south of the city.
Finland
has considerable executive power including
appointing the prime minister. The Federal Assembly Both Moscow and St Petersburg have efficient metro
France
(Federalnoye Sobraniye) is bicameral. The Upper systems that are the best way to get around the city.
House is the Federation Council (Sovet Federatsii) The state run Moscow metro (http://engl.mosmetro.
Germany
and the lower house, the State Duma ru) has the most comprehensive coverage and also
(Gosudarstvennaya Duma), which is the main operates Moscow’s monorail system. St Petersburg Greece
legislative organisation. has a well developed bus and tram system as well
its metro (www.metro.spb.ru in Russian only) Hungary
Legal Structure
Russia’s legal system is based on civil law. The Business travel around Russia is best undertaken by Ireland
Russian judiciary has three branches that are air given the size of the country, although the
Italy
headed by the Supreme Court, Supreme Court of Moscow train to St Petersburg is a high speed link.
Arbitration and Constitutional Court. The lowest Most other transport around Russia is undertaken by
Latvia
level of court in general jurisdiction is the municipal train. Moscow has nine major rail termini for
court that exists in each city or rural district and suburban travel and cross country, and it is the Lithuania
handles the majority of civil and criminal cases. western terminus for the Trans-Siberian railway to
Commercial cases are heard in the arbitration court Vladivostok on the Pacific east Coast. Moscow has Luxembourg
system under the Supreme Court of Arbitration. international connections to the Baltic States,
Eastern Europe, Austria, Germany, Italy and Greece. Netherlands
Turkey
Ukraine
BNP par i b as rea l estate 109
United Kingdom
Austria
Belgium
Bulgaria
Russia Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: The landlord is bound to hand
Legislation: The law that governs Premature termination is possible over the premises to the tenant in Denmark
leases is based on the Russian upon a mutual agreement good condition. The landlord is
Civil Code. between parties and as provided obliged to carry out all minor Estonia
Guarantee and Security Deposit: engineering and technical systems Brokerage Law
Italy
Landlords usually require in the appropriate manner and not No specific qualifications are
information from prospective carrying out modifications to the required to be a property
Latvia
tenants such as banking details or structural components of the consultant in Russia. Brokerage
access to company information. premises without a preliminary law is governed by the Russian Lithuania
The security deposit guarantees written agreement with the Civil Code. In general, if a property
the execution of the tenant’s landlord. The tenant is bound to is introduced to a prospective Luxembourg
obligations according to the lease pay the rent and other dues tenant who views it with the
agreement. A deposit of 3 months according to conditions stated in introducing agent, then the tenant Netherlands
Turkey
Ukraine
BNP par i b as rea l estate 110
United Kingdom
Austria
Belgium
Bulgaria
Russia Cyprus
Czech Republic
Service Charge: Service charges Property Transfer Tax (Stamp Fit Out/Reinstatement/
are quoted in US Dollars per Duty): When the real estate deal Dilapidations: Most premises are Denmark
square metre per year and are is registered the state duty is to delivered in shell and core
paid quarterly in advance. be paid (7,500 rubles for a legal condition i.e. partially finished Estonia
per year. VAT is accounted widely used in regions and for from July until the end of August is
Norway
separately. class C premises. a peak holiday period.
• Freehold – Conclusion of
Poland
purchase contracts on the BOMA (Building Owners and Acknowledgement
property results in the client Managers Association) We would like to thank Elena Portugal
paying the agency a fee in the international standards for high Galanova of ASTERA Group for
amount of 6% of the total cost quality premises. assistance in the preparation of Romania
of the property. VAT is this country review.
accounted separately. Russia
• Subletting – Conclusion of a
Serbia
sublease arrangement on the
property results in the client
Slovakia
paying an agency fee in the
amount of 10% sublease rate Spain
per year. VAT is accounted
separately. Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 111
United Kingdom
Austria
Belgium
Bulgaria
SERBIA Cyprus
Czech Republic
Denmark
Belgrade
Estonia
Finland
Country Statistics
France
Population (thousands) 7,498 (Census 2002)
Surface area (km²) 88,412
Germany
Density (per km²) 104
Local currency Dinar (RSD) Greece
Net direct foreign investment (US$ millions) 4387 2524 2700 1300
Labour Force (millions) 3.8 3.7 3.7 3.7 Latvia
Norway
Major Cities
Poland
City Core Population
Belgrade 1,576,124 Portugal
Novi Sad 261,121
Nis 245,182 Romania
Kragujevac 176,743
Kraljevo 122,987 Russia
Serbia
Sources: Rapublic Statistic Office
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 112
United Kingdom
Austria
Belgium
Bulgaria
SERBia Cyprus
Czech Republic
Political Structure Transport
Serbia is a parliamentary republic with a directly National airport “Nikola Tesla” (www.airport- Denmark
elected president as head of state who serves a 4 belgrade.co.yu) is the main international airport with
year term. It proclaimed independency 5th of June more than 43 direct flights and is located about 15 Estonia
2006. The primary legislative body, the parliament, km from the city centre. There is also another civil
Finland
is unicameral and called the National Assembly airport “Konstantin Veliki”, located in the city of Nis.
(Narodna Skupstina). There are no direct rail services between Serbia and
France
Western Europe but there are daily services to
Legal Structure Budapest, Bucharest, Istanbul and Thessalonika. Pan
Germany
Serbia’s civil and criminal law is based on Roman European Corridor N° 10 is one of the most important
civil law although the judiciary is independent and European highways passing through the country, Greece
has equal status with the legislative and executive leading from Salzburg through Belgrade and Niš and
branches. The judicial system is managed by the branching to Athens and Sofia. Another branch of the Hungary
Supreme Judicial Council and consists of regional corridor links the Capital with Budapest.
courts, district courts, and the supreme courts of Ireland
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 113
United Kingdom
Austria
Belgium
Bulgaria
SERBIA Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: Options to Tenant and Landlord obligations:
Legislation: Leases are governed renew can be negotiated between Tenant obligations are for internal Denmark
by the Serbian Law on Obligations the two parties. Lease contracts repair and maintenance whilst
and Contracts / Serbian State agreed for a definite term may be landlord obligations are for Estonia
Gazette issue No. 29/78, 39/85, automatically renewed for an external and structural repairs.
Finland
45/89, 57/89 and State Gazette indefinite period, if the tenant There are no standards for
issue No. 31/93. There is no continues to use the property insurance clauses so most lease
France
special law concerning after the end of the lease and contracts do not deal with it. But
commercial leases. there is no objection by the it is common, especially for big
Germany
landlord. landlords with mostly office
Lease Length: No minimum initial space, to oblige the tenant to Greece
lease length is legally prescribed Break Options and Terminations: obtain full property insurance for
but the maximum lease length is Break options and termination of the premise. Hungary
10 years. In practice, lease period lease contracts for a definite term
are negotiable. Negotiation of 10 have to be negotiated between Subletting: Full subletting is Ireland
years lease is difficult as most the parties along with allowed only with the written
Italy
landlords do not feel secure and compensation. Lease contracts for consent of the landlord. Such
prefer leasing for a shorter period. indefinite term may be terminated consent may be given in general
Latvia
by any of the parties with one form as a clause of the lease
Rent Escalation/Rent Review: month pre-notice. contract. Partial subletting is Lithuania
Rent is adjusted annually based allowed without consent of the
on the Harmonized Index of In case of transfer of the leased landlord unless the lease contract Luxembourg
Consumer Prices (HICP) published property on part of the landlord explicitly prohibits it.
by the Serbian Republic Statistic (sale, liquidation, foreclosure, Netherlands
Office. The basis of rent escalation inheritance) the lease contract Legal Environment Concerning
Norway
is freely negotiable and in the shall be valid and binding the new Brokerage Law
past escalation using the EUROST owner if it is registered in the Real There is no law or regulation of
Poland
AT index of consumer prices was Estate Register with the the activities of real estate
not uncommon. It is not Recordation Agency. If the lease brokers in Serbia. Law is under Portugal
uncommon, especially for big contract is not registered but has public debate it will introduce all
companies with mostly office a notary authenticated date of issues regarding real estate in Romania
space, to have rental adjustments signing, it shall be valid and Serbia.
after 5 years on the basis of a binding on the new owner until Russia
market survey of rents. either the expiry date or one year Occupancy Costs
Serbia
following the property transfer The following charges are payable
Guarantee and Security Deposit: date. If the lease contract is not by the tenant:
Slovakia
Generally a deposit of 2 to 3 registered or notary
months gross rent is payable authenticated, it is valid and Rents: Rents are usually quoted in Spain
upon the signing of the lease binding on the new owner if the Euros per square meter per month
contract. lease contract is for an indefinite and are paid monthly in advance Sweden
term. either in EUR or in middle RSD
exchange rate at the payment day. Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 114
United Kingdom
Austria
Belgium
Bulgaria
SERBia Cyprus
Czech Republic
Service Charge: Building service Property Transfer Tax: For Use of Space: Traditionally older
charges for commercial leases is purchases of property, a property offices in Serbia have tended to be Denmark
3 Euros per square meter per transfer tax is 2.5%. constructed as cellular offices.
month. Usually service charges Recently, in newer buildings, Estonia
are paid monthly in advance with VAT: VAT in Serbia is currently offices are predominantly open
Finland
the rent. For residential property, 18%. Professional fees are subject space structure, providing the
fixed service charge is applied to VAT. possibility for the leaser to
France
only for modern buildings or organize the space according to
complexes that have Other Taxes/Costs: To finalize the their needs.
Germany
arrangements with a property purchase of a property a notary
management company. fee is paid, determined on a scale Holidays Greece
based on the purchase price. There are two periods during the
Local Property Taxes: There is year when the speed of Hungary
property tax in amount of 0.4% of General Market Practices transactions are significantly
the value of the property and is Basis of Measurement: There is affected by holidays in August and Ireland
payable once a year. no standard basis of from Orthodox Christmas till mid
Italy
measurement in Serbia. For January.
Acquisition Costs leases, the premises are typically
Latvia
Typical acquisition costs that a measured based upon the built up Acknowledgement
company will have to pay when area stated on architectural plans We would like to thank Jovan Lithuania
buying or leasing new premises for planning approval. For Jovanovic of Danos & Associates
include: property purchases construction for their assistance in the Luxembourg
companies imposed Gross Area as preparation of this country
Agents Fees basis of measurement, which review. Netherlands
• Leasing – Fees are usually 1 includes the built up area and the
Norway
month’s net rent plus VAT. proportional part of all common
• Freehold – Fees are usually space areas of the building, which
Poland
between 2% and 3%. For may reach even 10 – 20% of the
reasonably large transactions built up area of the premises. Portugal
lower fees are negotiated,
depending on the size of the Fit Out/Reinstatement/ Romania
property involved, the Dilapidations: The tenant is
particular market typically responsible for all costs Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 115
United Kingdom
Austria
Belgium
Bulgaria
Slovakia Cyprus
Czech Republic
Denmark
Bratislava
Estonia
Finland
Country Statistics
France
Population (thousands) 5,391
Surface area (km²) 49,000
Germany
Density (per km²) 110
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Bratislava 448,742 Portugal
Kosice 241,811
Romania
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 116
United Kingdom
Austria
Belgium
Bulgaria
Slovakia Cyprus
Czech Republic
Political Structure Public transport in Bratislava consists of buses,
Slovakia is a parliamentary republic with a president trolleybus and trams and is managed a the city Denmark
as head of state who is elected by popular vote to municipal company, Public Transport Company
serve a five-year term. Slovakia’s parliament is the Bratislava Ltd (Dopravný podnik Bratislava) Estonia
unicameral National Council of the Slovak Republic (www.dpb.sk). Bratislava Integrated Transport
Finland
(Narodna Rada Slovenskej Republiky). (Bratislavská integrovaná doprava) acts to link the
services to in the city to the suburbs and elsewhere
France
Legal Structure in the country.
Slovakia’s legal system is based on civil law with
Germany
influences from Austro-Hungarian codes. The Slovak Bratislava is connected to other cities in Slovakia,
judiciary consists of local and regional courts that with the larger towns possessing more than one Greece
are subordinate to the Supreme Court that acts as train station. It also has international rail
the highest court of appeal. connections to the Czech Republic, Austria and Hungary
Hungary. Trains are run by the state owned company
Hours of Business Slovak Republic Railways (Železnice Slovenskej Ireland
The main business hours are Monday to Friday Republiky) (www.zsr.sk) who also provide travel
Italy
08:00am – 16:30pm. details.
Latvia
Visas International Dialling Code
Slovakia is a member of the Schengen area The country code is + 421 Lithuania
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss Coordinated Universal Time (UTC) + 1 hour Luxembourg
passport do not require a visa. Nationals from EU- Eastern Standard Time + 6 hours
countries as well as Switzerland and Liechtenstein Netherlands
may also enter without a visa. Citizens of the United Invest in Bureau
Norway
States of America do not require a visa for entry. A Further country information can be obtained from
residence permit is required if intending to stay for a the Slovakian Investment and Trade Development
Poland
period exceeding 3 months from the Slovak embassy Agency:
in the country of origin. www.sario.sk/?home Portugal
Transport Romania
The main international airport in Slovakia is
Bratislava Airport (www.letiskobratislava.sk), also Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 117
United Kingdom
Austria
Belgium
Bulgaria
Slovakia Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Legal Environment Concerning
Legislation: The law that governs Break options are negotiable but Brokerage Law Denmark
commercial leases is based on the tenants should be aware of notice There is no legal requirement to
Rent Act. periods as the options will expire have a licence to trade as an Estonia
and become null and void if notice agent in Slovakia. Each party
Finland
Lease Length: There is no is not delivered on time. Some typically pays their respective
maximum term limit for leases lease agreements allow for the agent. On occasion the landlord’s
France
but 3 and 5 year leases are typical termination of the lease prior to agent will sometimes earn a fee of
in Slovakia. the break option under the half a month’s net rent from the
Germany
condition of a penalty, subject to tenant or the landlord. The
Rent Escalation/Rent Review: negotiations and current market tenant’s agent only earns fees Greece
Indexation of rents is specified in conditions. directly from the tenant.
the lease agreement. The Hungary
Consumer Price Index (Index Tenant and Landlord Obligations: Occupancy Costs
spotrebiteľských cien) produced Normally the landlord is The following charges are payable Ireland
Either a deposit of 3–4 months’ the prior written consent of the Service Charge: Service charges
Norway
net rent or a bank guarantee is landlord. The landlord is not are quoted in Euros per square
necessary to complete the lease. required to approve the proposed metre per month and are paid
Poland
sublease although must give monthly in advance.
Rights of Renewal: If an option to reasonable grounds for denying a Portugal
renew was not previously agreed, sublease. Local Property Tax: Paid directly
the lease will terminate and must by the landlord and billed to the Romania
be renegotiated. tenant via the service charge.
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 118
United Kingdom
Austria
Belgium
Bulgaria
Slovakia Cyprus
Czech Republic
Acquisition Costs General Market Practices When vacating premises, the
Typical acquisition costs that a Basis of Measurement: There are tenant is responsible for Denmark
company will have to pay when two standard measuring reinstating the space to the
buying or leasing new premises practices: condition it was in when they first Estonia
Property Transfer Tax (Stamp Areas used for technical use, plan space are both common.
Italy
Duty): The property transfer tax structural walls and elevators
was cancelled in 2005. Now it is are excluded. A “gross-up” Holidays
Latvia
only the purchase price plus VAT. factor of 5 to 12% may be There are certain times of the
applied to the Net Lettable year when the speed of Lithuania
Value Added Tax: The VAT rate in Area, particularly if the transactions are reduced due to
Slovakia is currently 19% and building is new. holidays. August and January tend Luxembourg
payable on all forms of • Gross Base Area or BGF to generally be the main holiday
transactions including rent, (Brutto Geschossfläche). This periods. Netherlands
partitioning as a standard.
Serbia
Upgrading space to full air
conditioning is generally the
Slovakia
responsibility of the tenant. When
letting second generation space, Spain
the landlord will usually assume
the costs of installing partitioning Sweden
according to a space plan
provided by the tenant. Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 119
United Kingdom
Austria
Belgium
Bulgaria
Spain Cyprus
Czech Republic
Madrid
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 44,068
Surface area (km²) 505,000
Germany
Density (per km²) 87
Local currency Euro Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Madrid 2,823,667 Portugal
Barcelona 1,454,695
Valencia 735,738 Romania
Seville 695,266
Saragossa (Zaragoza) 600,781 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 120
United Kingdom
Austria
Belgium
Bulgaria
Spain Cyprus
Czech Republic
Political Structure Transport
Spain is a parliamentary democracy with a The main international airport is Madrid Barajas Denmark
hereditary constitutional monarch as head of state. airport (www.aena.es) located 12 kilometres north
Spain is divided into 17 regions that have own east of the city centre. Barajas airport is connected Estonia
governments and administrative structure but with to Madrid via Madrid’s underground system, the
Finland
different levels of autonomy. The supreme legislative Metro (www.metromadrid.es). Madrid also has a
authority is the National Parliament (Cortes light rail system called Cercanías (www.renfe.es/
France
Generales) that is bicameral, consisting of the upper cercanias). All of Madrid’s transport systems are
chamber, the Senate, and the lower chamber, the part of the Consorcio Regional de Transportes (www.
Germany
Congress of Deputies. ctm-madrid.es).
Greece
Legal Structure The two largest operators in Spain are the state
The Spanish legal system is based on civil law. At the owned Renfe Operadora, the former Spanish Hungary
top of court system is the Supreme Court that is National Railway Network (http://horarios.renfe.es)
court of final appeal, followed by the Audiencia that operates the broad gauge lines and Ireland
Nacional that deals with national level cases, the Ferrocarriles Españoles de Vía Estrecha or FEVE
Italy
Audiencia Provincial that deals with cases at a (www.feve.es/) who operate most of the narrow
provincial level and the lowest level of the judiciary, gauge railways.
Latvia
the unipersonal courts, which are judge run courts.
International Dialling Code Lithuania
Hours of Business The country code is + 34
The main business hours are Monday to Friday Luxembourg
09:00am – 14.00pm, 16:00pm – 20.00pm. Coordinated Universal Time (UTC) + 1 hour
Eastern Standard Time + 6 hours Netherlands
Visas
Norway
Spain is a member of the Schengen area agreement. Invest in Bureau
Holders of an EEA (EU Member States, Iceland, Further information can be obtained from the Invest
Poland
Liechtenstein and Norway) or Swiss passport do not in Spain bureau:
require a visa. Nationals from EU-countries as well www.investinspain.org Portugal
as Switzerland and Liechtenstein may also enter
without a visa. Citizens of the United States of Romania
America do not require a visa for entry. A residence
permit is required if intending to stay for a period Russia
exceeding 3 months.
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 121
United Kingdom
Austria
Belgium
Bulgaria
Spain Cyprus
Czech Republic
Typical Lease Terms Break Options and Terminations: Subletting: Generally, subletting
Legislation: The statue that Break options are negotiable, but is allowed with the written Denmark
governs leases is based on the tenants should aware of notice consent of the landlord. The
Spanish Civil Code and the 1994 periods otherwise terms can landlord must accept the Estonia
Urban Leases Law. continue automatically. In most subtenant if they have an average
Finland
cases if the either party does not covenant but is allowed to
Lease Length: Negotiable, but give notice in advance as agreed, prohibit subletting if the use of
France
typically 5 years. the lease will automatically the premises by a subtenant
continue for a previously agreed substantially deviates from the
Germany
Rent Escalation/Rent Review: period of time. Some lease original use by the main tenant. If
Rent is adjusted annually based agreements allow for the not explicitly detailed in the lease, Greece
on the Cost of Living Index. premature exit of a lease under tenants are able to charge higher
Indexation clauses in leases the condition of a penalty. The rents to subtenants then what Hungary
usually include an automatic penalty for early lease they pay to the landlord.
adjustment whenever the Cost of termination used to be the Ireland
subject to negotiations.
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 122
United Kingdom
Austria
Belgium
Bulgaria
Spain Cyprus
Czech Republic
Legal Environment Concerning Acquisition Costs Value Added Tax: The current
Brokerage Law Typical acquisition costs that a VAT rate in Spain is 16% and Denmark
Agents do not need to be company will have to pay when payable on all forms of
registered to practice in Spain. buying or leasing new premises transactions including rent, Estonia
The Spanish Civil Code and the include: building service charge, agents
Finland
Spanish Commerce Code govern fees and notary costs.
Spanish brokerage law. The agent Agents Fees
France
and tenant, or the agent and • Leasing – Fees are usually Other Taxes/Costs: To finalise a
landlord, typically sign a mandate between 8%-12% of the first purchase of a property, a
Germany
agreement or formal intermediary year’s net annual rent. registered notary must be
fees recognition for professional • Freehold – Fees, paid by the instructed who will charge a fee Greece
services. Depending on the seller are typically 0.5-3% of of 0.5-1% of the purchase price.
structure of the transaction, fees the purchase price Hungary
will be paid by either the tenant • Subletting – In a landlord’s General Market Practices
or more usually the landlord. market, a subtenant would Basis of Measurement: There are Ireland
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 123
United Kingdom
Austria
Belgium
Bulgaria
Spain Cyprus
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: New office There are certain times of the Denmark
developments generally include year when the speed of
raised floors, carpeting and transactions are significantly Estonia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 124
United Kingdom
Austria
Belgium
Bulgaria
Sweden Cyprus
Czech Republic
Denmark
Estonia
Finland
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 Latvia
Norway
Major Cities
Poland
City Core Population
Stockholm 743,703 Portugal
Gothenburg 462,470
Malmö 257,574 Romania
Uppsala 188,478
Linköping 132,500 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 125
United Kingdom
Austria
Belgium
Bulgaria
Sweden Cyprus
Czech Republic
Political Structure Transport
Sweden is a parliamentary monarchy. The The principal international airports serving Sweden Denmark
parliament (Riksdag) is unicameral and consists are Arlanda Airport (www.arlanda.se) that is located
of 349 members who are elected to serve 43 kilometres north of Stockholm, and Göteborg- Estonia
passport do not require a visa. Nationals from EU- the north of the country. The train service is run by
Norway
countries as well as Switzerland and Liechtenstein Swedish State Railways (SJ) (www.sj.se) who also
may also enter without a visa. Citizens of the United provide travel details.
Poland
States of America do not require a visa for entry. A
residence permit is required if intending to stay for a International Dialling Code Portugal
period exceeding 3 months registered with the The country code is + 46
Swedish Migration Board. Romania
Coordinated Universal Time (UTC) + 1 hour
Eastern Standard Time + 6 hours Russia
Serbia
Invest in Bureau
Further information can be obtained from the Invest
Slovakia
in Sweden bureau:
www.isa.se Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 126
United Kingdom
Austria
Belgium
Bulgaria
Sweden Cyprus
Czech Republic
Typical Lease Terms Rent Escalation/Rent Review: Break Options and Terminations:
Legislation: Commercial lease Rents are indexed annually to the Break options are not common in Denmark
contracts in Sweden are governed Consumer Prices Index but require short term leases (3 – 5 years)
by the Real Property Code, which the lease terms to be at least 3 but do occur in longer term leases Estonia
stipulates mandatory regulations years long. Rental escalations (7 – 10 years). Tenants should be
Finland
for commercial leases. Swedish typically are adjusted according aware that 9 – 12 months notice
lease contracts are short (2-4 to the index each year in October. has to be served if the tenant
France
pages) with appendices covering wants to change terms or
details such as the indexation of Guarantee and Security Deposit: terminate before the end of the
Germany
rent and service charges. The Landlords usually require lease period. The most common
association of property owners information from prospective termination periods are March, Greece
have published standard tenants such as banking details or September and December.
contracts for different types of access to company information. A Hungary
properties (hotels, shopping deposit or a bank guarantee is Tenant and Landlord Obligations:
centres, offices). It is not seldom required to complete the Tenants are responsible for all Ireland
are familiar with the standard reasons considered fair as is allowed, with the written
Norway
leases the negotiation process compared to normal market consent of the landlord, which is
tends to be shorter than in many conditions. If there is dispute not to be unreasonably withheld.
Poland
other countries in Europe. between the tenant and landlord
the tenant may request a Portugal
Lease Length: Typically judgement from a rent tribunal
commercial leases are for terms (Hyresnamnd) to determine if the Romania
of 3 to 5 years. When signing reason given for termination is
leases in new projects or when fair. The decision is not legally Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 127
United Kingdom
Austria
Belgium
Bulgaria
Sweden Cyprus
Czech Republic
Legal Environment Concerning Local Property Tax: This is Property Transfer Tax (Stamp
Brokerage Law normally paid by the tenant as a Duty): When purchasing a Denmark
The Real Estate Brokers Law share of total rents in the property, the purchaser is
1995:400, with subsequent property or as a share of total responsible to pay stamp duty Estonia
amendments, governs brokerage leaseable area in the building. equal to 3% of the purchase price.
Finland
law in Sweden and requires
agents to be university educated, Acquisition Costs Value Added Tax: The current VAT
France
objective, and licensed by Typical acquisition costs that a rate in Sweden is 25% and is
Fastighetsmaklarnamnden. The company will have to pay when payable on all forms of
Germany
law deals primarily with buying or leasing new premises transactions including rent,
residential transactions however, include: building service charge, agents Greece
where agents act for both buyer fees, and notary costs.
and seller, and does not apply Agents Fees Hungary
directly to commercial real estate • Leasing – Fees are usually Other Taxes/Costs: When
transactions where both parties 10%-20% of the first years’ net purchasing a property, if the Ireland
typically instruct different agents. annual rent (dependant on the purchaser requires a mortgage
Italy
As a result, there are a number of size of the property and the deed, a 2% mortgage deed tax is
commercial agents that do not geographic region). Depending payable (based upon the value of
Latvia
possess a license. on the structure of the the deed).
transaction, the fees will be Lithuania
Occupancy Costs paid by either the tenant or General Market Practices
The following charges are payable the landlord. When the fee is Basis of Measurement: The Luxembourg
by the tenant: paid by the tenant it is Lettable Area is defined as the
normally set on an hourly area occupied by internal walls Netherlands
Rents: Rents are quoted in SEK, basis or a fixed fee. and partitions excluding wall
Swedish Kroner, per square metre • Freehold – Fees are paid by thickness and external
Norway
per annum and paid in advance on the seller of the property and projections. When there is a single
Poland
a quarterly basis. are negotiable dependant on tenant building the normal
the value of property. Fees are measurement is the Gross Portugal
Service Charge: This is sometimes typically between 2-3% of the Internal Area, which also includes
quoted within the rental figure agreed purchase price for stairwells, lobbies, corridors, etc. Romania
and includes water, cleaning of properties up to SEK 100
common areas and snow removal, million. Russia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 128
United Kingdom
Austria
Belgium
Bulgaria
Sweden Cyprus
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: Offices are There are certain times of the Denmark
provided based on the needs of year in which the speed of
the tenant (the landlord will transactions are reduced due to Estonia
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 129
United Kingdom
Austria
Belgium
Bulgaria
Switzerland Cyprus
Czech Republic
Bern
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 7,484
Surface area (km²) 41,000
Germany
Density (per km²) 181
Local currency Franc Greece
Net direct foreign investment (US$ millions) -41,898 -8,954 -21 927
Labour Force (millions) 3.9 4.0 4.1 4.1 Latvia
Norway
Major Cities
Poland
City Core Population
Zürich 337,553 Portugal
Geneva 172,598
Basel 169,875 Romania
Bern 123,783
Lausanne 114,034 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 130
United Kingdom
Austria
Belgium
Bulgaria
Switzerland Cyprus
Czech Republic
Political Structure Transport
Switzerland is a federal republic constructed from Switzerland has international airports at Zurich, Denmark
a confederation of 26 states (cantons). The Swiss Geneva and Basel. Zurich Airport (www.zurich-
state is highly devolved with the federal authorities airport.com) is located 12 kilometres north of the Estonia
having limited power. There is no head of state in city and is the largest by volume of air travel.
Finland
Switzerland as such although the nearest equivalent Geneva Cointrin International Airport www.gva.ch
is the President of the Confederation. The Swiss is located 5 kilometres north of Geneva and
France
parliament is bicameral, consisting of the National EuroAirport Basel-Mulhouse-Freiburg
Council that represents the whole population and (www.euroairport.com) is located 8 kilometres
Germany
the Council of States made up of members from the north west of Basel.
cantons. Legislation can be enabled by both houses Greece
and is not vetoed by the executive but may be Switzerland has a very well developed public
challenged by citizens. As such citizen led transport network. Zurich canton is extremely well Hungary
referendums are important legislative feature of connected with trains, buses, trams and boats that
Swiss democracy. are run by multiple operators under Zürich Transport Ireland
States of America do not require a visa for entry. A Further information can be found from OSEC, the
Serbia
residence permit is required if intending to stay for a Swiss umbrella organisation for foreign trade and
period exceeding 3 months. Residency permits are investment:
Slovakia
associated with job placements and have to be www.locationswitzerland.ch
applied for in the Swiss canton in which the Spain
company is located.
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 131
United Kingdom
Austria
Belgium
Bulgaria
Switzerland Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: On lease Tenant and Landlord Obligations:
Legislation: The law that governs expiry the lease will automatically Tenant obligations are internal Denmark
leases is based on the regulations renew only if there is a right of repair, maintenance and
of the Codes des Obligations/ option. The renewal will be on the insurance within their Estonia
Obligationenrecht of 1911 as same terms as the original lease accommodation while landlord
Finland
modified on 15 December 1989 with the rent adjusted by the obligations are main structural
and subsequent amendments. Consumer Price Index (if allowed repairs, building insurance and to
France
by the original lease), unless keep the roof watertight. Land
Lease Length: Typical leases in either the landlord or tenant taxes, maintenance and building
Germany
Switzerland are for 5 years. notify the other in writing within insurance is paid by the landlord,
the specified notice period. The but only maintenance (not plant Greece
Rent Escalation/Rent Review: notice period is usually 6 or 12 renewals) and additional services,
Only in leases of 5 years or more months prior to the end of the such as security, central reception Hungary
can the rent be adjusted annually lease. It is possible to include a are invoiced to the tenant.
based on the Federal or Cantonal clause that specifies that the Ireland
Consumer Price Index as specified lease will automatically expire Subletting: According to
Italy
in the lease. Leases of 3 or more unless notice to renew is given by regulations of the Codes des
years can include fixed increases one party and accepted by the Obligations/Obligationsrecht, the
Latvia
at specified dates. other. tenant is permitted to sublet the
lease with written consent from Lithuania
Guarantee and Security Deposit: Break Options and Terminations: the landlord. Any profit rent
Landlords usually require For both the tenant and landlord premium must be offered to the Luxembourg
information from prospective a break or early termination can landlord.
tenants such as banking details or only be operated in accordance Netherlands
access to company information. A with the negotiated terms of the Legal Environment Concerning
Norway
deposit or bank guarantee of 3-6 lease. The tenant does not have Brokerage Law
months rent is generally required the right to cancel the lease No specific qualifications are
Poland
when the lease is signed. before the break option dates required to be a property
unless prior agreement from the consultant in Switzerland. Portugal
landlord has been obtained. If Brokerage Law is strictly
granted, this may be subject to a controlled by the Code des Romania
penalty, the amount of which will Obligations/Obligationenrecht. Any
depend on market conditions and introduction made by that agent, Russia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 132
United Kingdom
Austria
Belgium
Bulgaria
Switzerland Cyprus
Czech Republic
Occupancy Costs Acquisition Costs Property Transfer Tax: For the
The following charges are payable Typical acquisition costs that a purchase of a property, the Denmark
by the tenant: company will have to pay when purchaser will be responsible for
buying or leasing new premises registration cost and land Estonia
Rents: Rents are normally quoted include: transfer taxes, notary fees, and
Finland
in Swiss Francs per square metre the other small expenses (stamps,
per annum and are paid either Agents Fees mortgage costs). The notary is in
France
monthly or quarterly in advance. • Leasing – Fees are typically charge of collecting these taxes.
10-15% of the first year’s net These costs will vary from canton
Germany
Service Charge: Service charges rent. The fees are paid either to canton.
are quoted in Swiss Francs per by the tenant or landlord Greece
square metre per annum and are depending on the transaction. Value Added Tax: The current VAT
paid with the rent either monthly Third party cost such as rate in Switzerland is 7.6 % and Hungary
or quarterly in advance, based on brochures, advertising, direct payable on most forms of
a provisional amount, which is marketing, banners are commercial transaction including Ireland
then adjusted once the actual cost incorporated in this cost. service charges and agents fees
Italy
is known at the end of the year. • Freehold – Fees are paid but is not paid on property
either by the seller or the acquisitions or the tax charged
Latvia
Local Property Tax (Impôt buyer, depending on the thereon.
Foncier/Liegenschaftssteuer): This transaction, and negotiated Lithuania
tax is assessed on the basis of on a case-by-case basis General Market Practices
rental value of the building, as depending on the purchase Basis of Measurement: In Luxembourg
assessed by the Cantonal valuer, price. Fees are usually Switzerland, whilst general
using strict criteria laid down by between 3-5% of the agreed definitions are provided by the Netherlands
law, and paid by the landlord on purchase price. Society of Engineers and
an annual basis. Depending upon • Subletting – Fees are typically Architects (SIA), there are
Norway
the canton, the cost may or may 10-15 % of the first year’s net variations from canton to canton.
Poland
not be passed on to the tenant. rent (inclusive of the value The following terms are
agreed on the sale of any commonly used to define floor Portugal
fixtures and fittings). The fees areas:
are paid either by the tenant Romania
or landlord depending on the
transaction. Official “fee Russia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 133
United Kingdom
Austria
Belgium
Bulgaria
Switzerland Cyprus
Czech Republic
• Gross External (Surface Brute • Net (Surface Utile Nette) – Use of Space: Companies occupy
Externe) – Gross areas Net Lettable Areas. The net is office space usually as cellular Denmark
measured to the external face equal to the gross internal offices mixed with open spaces.
of the external walls, after having deducted Estonia
Turkey
Ukraine
BNP par i b as rea l estate 134
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 72,974
Surface area (km²) 781,000
Germany
Density (per km²) 93
Local currency Turkish Lira Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Istanbul 8,260,438 Portugal
Ankara 2,984,099
Izmir 2,081,556 Romania
Bursa 1,066,559
Adana 1,041,509 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 135
United Kingdom
Austria
Belgium
Bulgaria
Turkey Cyprus
Czech Republic
Political Structure Istanbul’s public transport system consists of buses,
Turkey is a republic with a president as head of state light rail and newly constructed tram and metro Denmark
who is elected by parliament to serve a 5 year term. system. Details for rail travel can be obtained from
The Turkish parliament, the Grand National Istanbul Public Transportation Company (www. Estonia
terrorism..
Italy
International Dialling Code
Hours of Business The country code is + 90
Latvia
The main business hours are Monday to Friday
08.30am – 17:30pm. Coordinated Universal Time (UTC) + 2 hours Lithuania
Eastern Standard Time + 7 hours
Visas Luxembourg
Visiting Turkey usually requires a visa although the Invest in Bureau
requirements vary depending upon the country of Further information can be obtained from the Netherlands
origin of the person visiting. Three-month visas can Investment Support and Promotion Agency’s Invest
Norway
be obtained from the appropriate consulate along in Turkey website:
with residency permits. Turkey is not a member of www.invest.gov.tr
Poland
the Schengen area agreement.
Portugal
Transport
Istanbul’s Ataturk International Airport and Romania
Esenboğa International Airport at Ankara are the
primary international airports. Atatürk International Russia
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 136
United Kingdom
Austria
Belgium
Bulgaria
Turkey Cyprus
Czech Republic
Typical Lease Terms Rent Escalation/Rent Review: Break Options and Terminations:
Legislation: The laws that Parties are free to pre-determine For the tenant a break or early Denmark
regulate commercial and annual indexation rate. For Turkish termination can be operated in
residential leases are Civil Code, Lira lease contracts, indexation is accordance with the negotiated Estonia
Obligation Law, Condominium Law generally based on CPI.Foreign terms of the lease. If granted this
Finland
and Law Numbered 6570 currency payments may also be may be subject to a penalty, the
Governing Real Estate Leases. subject to indexation, annually by amount of which will depend on
France
General regulatory rules with 1-5 % or rates such as LIBOR or US market conditions and agreement
regard to validity of a lease CPI. Rent review usually happens between the specific parties.
Germany
agreement arranged under at the end of rent term. Tenants may not have their leases
Turkish Civil Code numbered 4721 ended by the landlord. Greece
were changed in 2002. The Guarantee and Security Deposit:
Turkish Law of Obligations” draft The amount of deposit money is Tenant and Landlord Obligations: Hungary
statute comprises of significant not restricted by legislation. Tenant obligations are internal
provisions on lease, has been Parties negotiate the deposit repair, maintenance and Ireland
completed and has recently amount, taking properties of insurance within their
Italy
adopted by parliament. leased premises, as well as other accommodation whilst landlord
variables into consideration. The obligations are main structural
Latvia
Lease Length: Most commercial procedure in practice equates to repairs and building insurance.
lease agreements in Turkey are 1-3 months rent. Bank letters or Property taxes are paid by the Lithuania
signed for a 5 year term. For bills of guarantee may replace landlord.
shopping centers, this term cash deposits in more major Luxembourg
normally increases to 7 years for leases. Subletting: Subject to the lease
most tenants (but for small sized terms, the tenant is only Netherlands
units usually 5 years) and Rights of Renewal: The option permitted to sublet the lease with
Norway
normally not be less than 10 to renew is usually for one or written consent from the
years for anchor tenants. more periods. landlord. Again subject to lease
Poland
terms, the tenant may be
permitted to sublease to sister Portugal
companies without prior consent
of the Landlord. Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 137
United Kingdom
Austria
Belgium
Bulgaria
Turkey Cyprus
Czech Republic
Legal Environment Concerning Local Property Tax: This tax is • Purchasing – Fees are paid
Brokerage Law assessed on the basis of values as either by the seller or the Denmark
No specific qualifications are assessed by the Special Valuation buyer, depending on the
required to be a property Committees every 4 years and transaction, and negotiated Estonia
consultant in Turkey. Agents may paid by the landlord. The property on a case-by-case basis
Finland
act as a representative of one tax is charged annually by depending on the purchase
party or alternatively act as an municipalities at 0.1–0.6% of value price. Fees are usually
France
intermediary. depending on the nature of between 1.5–2% of the agreed
property and is payable in two purchase price.
Germany
Previously signed contracts are instalments (31 May and 30 • Subletting – Same as leasing
required for the agent to charge a November). This cost may not be Greece
fee for the services provided. The passed on to the tenant. The Property Transfer Tax: The
Turkish Law of Trade governs the tenant normally pays a minimal acquisition of Turkish property is Hungary
agents’ activities. amount of environmental tax to subject to 1.5% transfer tax. The
the local municipality. same charge will be applicable, Ireland
tendency towards charging in most corporate tenants. company. The sale of residential
Norway
Euros in recent years. units of less than 150 square
Acquisition Costs metres is subject to VAT at 1%. VAT
Poland
Service Charge: Service charges Typical acquisition costs that paid for buildings and land may
are quoted in Turkish Lira per a company will have to pay be recoverable for corporate Portugal
square metre per annum and are when buying or leasing new buyers. VAT paid by individuals is
paid with the rent monthly in premises include: not recoverable. Romania
advance, based on a provisional
amount, which is then adjusted Agents’ fees Russia
once the actual cost is known at Fees are agreed beforehand and
Serbia
the end of the year. Service vary depending upon the
charges are usually 10-15 % of property, time of selling, level of
Slovakia
collected rent. service and so on.
Spain
• Leasing – Fees are typically
8–10% of the first year’s gross Sweden
rent. The fees are usually paid
by the tenant. Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 138
United Kingdom
Austria
Belgium
Bulgaria
Turkey Cyprus
Czech Republic
General Market Practices works, decorations, installation,
Basis of Measurement: In Turkey, additions, and furnishings that Denmark
the following terms are commonly the tenant may undertake on the
used to define floor areas: premises during the lease shall, Estonia
Fit Out/Reinstatement/
Italy
Dilapidations: Office buildings Holidays
are usually not carpeted and There are 5 official national
Latvia
without ceilings, separators and holidays and two religious
lighting accessories (in a shell holidays. School holidays consist Lithuania
and core condition). Some of the of two weeks in January or
wiring, mechanical and electrical February, and the period from the Luxembourg
servicing infrastructures are beginning of June to the middle of
provided. Raised floors and September. Netherlands
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 139
United Kingdom
Austria
Belgium
Bulgaria
Kiev
Ukraine Cyprus
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 46,607
Surface area (km²) 603,628
Germany
Density (per km²) 77.2
Local currency Hryvnia Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
Kiev 2,589,541 Portugal
Kharkov 1,494,235
Dnipropetrovsk 1,108,682 Romania
Donetsk 1,050,369
Odessa 1,002,246 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 140
United Kingdom
Austria
Belgium
Bulgaria
Ukraine Cyprus
Czech Republic
Political Structure Transport
Ukraine is a parliamentary republic with a president The main international airport is Boryspil Denmark
as head of state. The president is elected by popular International Airport (http://airport-boryspil.kiev.ua),
vote to serve a five-year term. The unicameral located 29 kilometres east of Kiev. It is connected to Estonia
Ukrainian parliament is the Supreme Council the city by bus and metro. Within Kiev itself, most
Finland
(Verkhovna Rada). public transportation is run by the state. The Metro
(www.metro.kiev.ua) [Ukrainian only] is run by the
France
Legal Structure city municipal company Kyivsky Metropoliten. The
Ukraine’s legal system is based on civil law. The other methods of public transport, buses,
Germany
court system of Ukraine has four levels and begins trolleybuses, trams are operated by the
with the courts of general jurisdiction that include Kyivpastrans. Taxis are also an important means of Greece
local courts and regional courts, regional appeal transportation in Kiev. Other cities with metros
courts, specialized high courts (the High Arbitration include Kharkiv and Dnipropetrovsk. Hungary
Court and High Administration Court), and a Supreme
Court for final appeal. There are some suburban train links in Kiev run Ireland
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 141
United Kingdom
Austria
Belgium
Bulgaria
Ukraine Cyprus
Czech Republic
Typical Lease Terms Rights of Renewal: The length Occupancy Costs
Legislation: The law that governs and terms of options are subject The following charges are payable Denmark
leases is based on the Ukraine to negotiation. by the tenant:
Civil Code. Estonia
are usually negotiable. The most Subletting: The tenant is not are paid quarterly in advance.
Italy
common indexation is 3 to 5% per permitted to sublet the premises
annum. In international projects, without written consent from the Acquisition Costs
Latvia
the rent is adjusted annually landlord. Unless otherwise Typical acquisition costs that a
based on one of European or specified in a lease agreement, company will have to pay when Lithuania
American indices, but tenants try tenants are able to charge higher buying or leasing new premises
to avoid the item in the rents to subtenants then what include: Luxembourg
agreement. they pay to the landlord.
Agents Fees Netherlands
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 142
United Kingdom
Austria
Belgium
Bulgaria
Ukraine Cyprus
Czech Republic
General Market Practices Holidays
Basis of Measurement: BOMA There are certain times of the Denmark
standards are being increasingly year when the speed of
used by the landlords of transactions are significantly Estonia
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 143
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Denmark
Estonia
Finland
Country Statistics
France
Population (thousands) 60,587
Surface area (km²) 245,000
Germany
Density (per km²) 247
London
Local currency Pound Sterling Greece
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 Latvia
Norway
Major Cities
Poland
City Core Population
London 7,074,265 Portugal
Birmingham 1,020,589
Leeds 726,939 Romania
Glasgow 616,430
Manchester 430,818 Russia
Serbia
Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 144
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Political Structure require a visa. Nationals from Liechtenstein and the
The United Kingdom is a parliamentary monarchy. United States of America do not require a visa for Denmark
The monarchy is head of state but executive power entry. A residence permit is required if intending to
lies with the elected government. The United stay for a period exceeding 3 months. Estonia
Lords, that reviews legislation. London has an extensive underground metro system,
Italy
suburban rail and bus network that is mostly
Legal Structure operated under the direction of the transport
Latvia
The United Kingdom’s legal system is based on authority, Transport for London (www.tfl.gov.uk).
common law tradition with some civil law influences Lithuania
(in Scotland). There is no single governing law in the UK cities are connected by rail network and the
UK because it is a composite state. Separate legal larger cities have suburban rail connections. Luxembourg
systems exist for Scotland, Northern Ireland and,
England and Wales. In England and Wales the court Most of the transport is operated by private Netherlands
system hierarchy begins with the subordinate courts companies. National travel information can be
Norway
consisting of magistrate and county courts for low obtained from Transport Direct
level civil and criminal cases. The second tier of (www.transportdirect.info) or Travelline
Poland
courts is collectively known as the Supreme Court. (www.traveline.org.uk).
These consist of crown court, high court of justice Portugal
(civil and criminal appellate) and court of appeal. International Dialling Code
The Appellate Committee of the House of Lords is the The country code is + 44 Romania
highest court of appeal.
Coordinated Universal Time (UTC) +0 Hours Russia
Turkey
Ukraine
BNP par i b as rea l estate 145
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Typical Lease Terms Right of Renewal: Generally, Subletting: Generally subletting
Legislation: The law that governs tenants have security of tenure by is allowed with the written Denmark
leases is the Landlord and Tenant law on expiry of the lease and can consent of the landlord and
Act 1954 together with various apply for a new lease on similar according to the detailed terms of Estonia
ancillary legislation. terms. Both parties can agree to the lease. The tenant is normally
Finland
contract out of this protection. required to sublet at full market
Lease Length: 15 year or 10 year rent even if this is higher than the
France
leases are typical in England, Break Options and Terminations: rent the tenant pays. Tenants may
although 25 year leases that were Options are negotiable depending be prevented from subletting
Germany
common until the early 90’s still on the quality of the space. Prime below the rent payable and such
exist. new space will often only be clauses should be avoided when Greece
available on a 15 year lease signing new leases. Tenants may
Rent Escalation/Rent Review: although a break at the 10th year also assign or sell their lease to Hungary
Rent will be subject to upward may be offered. In other instances another tenant. In this situation it
only review. This is usually every breaks at 5 year intervals can be is important to avoid “Privity of Ireland
5 years but can be other patterns, negotiated, but these may be Contract” where there is ongoing
Italy
for example every 3 years, by subject to payment of penalties. obligation for payment of costs
agreement. The new rent will be should the purchaser of the lease
Latvia
agreed between the parties. If Tenant and Landlord Obligations: enter into liquidation.
agreement cannot be reached, When the building is entirely Lithuania
an arbitrator or independent occupied by one tenant, the tenant
expert will be appointed to set will take on full repairing and Luxembourg
the new rent. insuring obligations for the interior
and exterior of the building. In Netherlands
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 146
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Legal Environment Concerning England/Wales Acquisition Costs
Brokerage Law 25 March – Lady Day Typical acquisition costs that a Denmark
Commercial agents do not need to 29 September – Michaelmas Day company will have to pay when
be registered to practice in the UK 24 June – Midsummer Day buying or leasing new premises Estonia
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 147
United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Value Added Tax: The current VAT Fit Out/Reinstatement/ Holidays
rate in the UK is 17.5% (reduced to Dilapidations: The landlord The only period in the year when Denmark
15% until November 2009) and is generally finishes new office holidays will affect the speed of
payable on rent, building service developments to a ‘Cat A’ projects will be the Christmas Estonia
charge, agents fees and legal standard. Cat A will generally period from mid December to
Finland
costs. It can be possible to elect to include raised floors with floor early January. August is also a
not charge VAT on rent. This will boxes, comfort cooling or air holiday period but offices remain
France
vary from property to property conditioning, carpeting, ceilings open and operational during this
and will depend on the legal and lighting in place. The tenant’s time. There are also a number of
Germany
status of the landlord. fit out is known as finishing the Public holidays that fall on
building to ‘Cat B’. This will Monday; two are in May, one in Greece
General Market Practices include the provision of internal August and the Friday and
Basis of Measurement: The RICS partitioning, cabling, security and Monday at Easter. Hungary
Code of Measuring Practice facilities such as reception areas,
governs the measurement of post rooms, kitchens plus an Ireland
reinstatement works.
Serbia
Turkey
Ukraine
BNP par i b as rea l estate 148
United Kingdom
Austria
Belgium
Bulgaria
and conditions
Czech Republic
Denmark
Country Rent Typical Rent Rent Deposit Statutory Basis of Rent Frequency
Currency Lease Payable Right to Increases of Rent Estonia
Length (in Renew Increases
(years) advance)
Austria Euro 3 to 7 but Monthly 3 month’s gross or None Consumer price index Annual or when Finland
may be bank guarantee index reaches 5%
unlimited
France
Belgium Euro 9 Quarterly Bank guarantee None “Health Index” Annual
gezondheidsindex/
indice santé Germany
Bulgaria Euro / Leva Up to 10 Monthly 1 to 3 month’s None Bulgarian Harmonized Annual
max gross Consumer price index
Greece
or EU Consumer price
index
Cyprus Euro 2 to 5 Monthly 1 month net or Statutory after Hungary
bank guarantee 2 years of
occupancy
Czech Euro / 5 Monthly/ 3 month’s net or None EU consumer price Annual Ireland
Republic US Dollar Quarterly bank guarantee index
Denmark Danish Indefinite Quarterly Bank guarantee None Consumer price index Annual or by Italy
Kroner preset amount
Estonia Estonian 3 to 5 Monthly 3 to 6 months or None Consumer price index Annual
Kroon bank guarantee Latvia
Finland Euro 3 to 5 Quarterly 3 to 6 months or None Consumer price index Annual
bank guarantee
Lithuania
France Euro 3, 6 or 9 Quarterly 3 month’s net or None Construction costs Annual
bank guarantee index (INSEE index)
Germany Euro 5 or 10 Monthly 3 month’s gross or None Consumer price index Annual Luxembourg
bank guarantee or compounded
annually
Netherlands
Greece Euro 12 Monthly 2-3 month’s gross None Cost of living index Annual
Hungary Euro / 3 to 5 Monthly/ 3-4 month’s net or None Hungarian service Annual or when
US Dollar Quarterly bank guarantee price index or EU index exceeds Norway
consumer price index 2-3%
Ireland Euro 20 to 25 Quarterly 3 months or bank Statutory after Open market letting 5 years
Poland
guarantee 5 years of evidence and rent
occupancy review
Italy Euro 6 Quarterly 3 or 6 months or Statutory for a ISTAT cost of living Annual Portugal
bank guarantee further 6 years index
Latvia Latvian Lat 3 to 5 Monthly 3 – 6 months or None Consumer price index Annual
bank guarantee Romania
Lithuania Lithuanian 3 to 5 Monthly 3 – 6 months or None Consumer price index Annual
Lita bank guarantee Russia
Luxembourg Euro 3, 6 or 9 Monthly/ Bank guarantee or None STATEC cost of living Annual
Quarterly 3 or 6 months index
Netherlands Euro 5 Monthly/ Bank guarantee Automatic after Dutch consumer price Annual Serbia
Quarterly/ equal to 3 months expiration of index
Biannual ROZ contracts
Slovakia
Norway Norwegian Indefinite Quarterly 3 – 6 month’s gross None Consumer price index Annual
Krone but 5 and
10 years are Spain
common
Poland Euro / 3, 5 or 10 Monthly Bank guarantee of None EU consumer price Annual
Sweden
Polish Zloty 2-3 month’s gross index or Polish
inflation index
Portugal Euro 5 Monthly 2 month’s net plus None Portuguese inflation Annual Switzerland
bank guarantee index
Turkey
Ukraine
BNP par i b as rea l estate 149
United Kingdom
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Country Rent Typical Rent Rent Deposit Statutory Basis of Rent Frequency
Currency Lease Payable Right to Increases of Rent
Denmark
Length (in Renew Increases
(years) advance)
Romania Euro/ 5 Monthly/ Bank guarantee None EU consumer price Annual Estonia
Romanian Quarterly equal to 3 months index
New Lei
Russia Ruble / Euro 3 to 7 Monthly/ 3 months None Type of indexation is Annual Finland
/ US Dollar Quarterly negotiable but usually
minimum of 3% France
SERBia Euro / Dinar Maximum Monthly 2-3 month’s gross None Serbian harmonized Annual
of 10 years rent index of consumer
but usually prices (HICP) Germany
shorter
Slovakia Euro Indefinite Monthly/ 3-4 months net or None Slovak or EU Annual
Greece
but 3 and Quarterly bank guarantee consumer price index
5 years are
common Hungary
Spain Euro 5 Monthly 2 months net or None Cost of living index Annual or by
bank guarantee preset amount
Sweden Swedish 3 to 5 Quarterly Bank guarantee Statutory. Consumer price index Annual Ireland
Kroner Landlord
must provide
Italy
reasons for not
renewing
Switzerland Swiss Franc 5 Monthly/ 3-6 months or bank None Federal or cantonal Annual Latvia
Quarterly guarantee consumer price index
Turkey Turkish Lira 5 Monthly/ 1-3 month’s or bank Statutory for Consumer price index. Annual
Lithuania
/ US Dollar Quarterly guarantee at least one If rent is in US$, US
/Euro period consumer price index
Ukraine Euro / 3 to 5 Monthly 3 month’s net None Type of indexation is Annual Luxembourg
US Dollar / negotiable but usually
Ukrainian minimum of 3%
Hryvnia Netherlands
United Pound 10 or 15 Quarterly 3 month’s or bank Statutory on Rental review based 5 years
Kingdom Sterling guarantee expiry of the on market evidence
Norway
lease
Poland
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. Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
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United Kingdom
Austria
Belgium
Bulgaria
Czech Republic
Country Leasing Freehold Subletting Property Transfer VAT Other Taxes/Costs
Tax
Denmark
Austria 2-3 times gross 1.5-3% of the 2-3 times gross Grunderwerbsteuer 3% 20%
monthly rent purchase price monthly rent Grundbucheintrag-
ungsgebühr 1% Estonia
Belgium 15% of the first 1-3% of the 15% of the first Regional registration 21%
year’s gross rent agreed purchase year’s gross rent or between 10% to 12.5%
price savings Finland
Bulgaria Half to 1 month’s 2.5-3% of agreed Half to 1 month’s 1.3% to 2.6% of the 20% Notary fee is paid based on
net rent purchase price net rent purchase price or the the purchase price up to France
depending on tax assessment value of BGL 6000.
agent and location the property whichever
is higher. For Sofia the Registration fee of 0.1% of Germany
tax is 2.5% purchase price. Legal fee
of BGL 700 for first BGL
100,000 of purchase price Greece
Cyprus 1 month net rent 3% of purchase 1 month’s net rent 3-8% on the purchase 15%
for a 2 year lease, price for a 2 year lease, price Hungary
a percentage of a percentage of
annual rent for annual rent for
longer leases longer leases Ireland
Czech 2 month’s net 1.5–2.5% of 2 month’s net rent 5% of purchase price 22%
Republic rent purchase price
Italy
Denmark 15 % of the first 1 – 3% of 15 % of the first 0.6% of purchase price 25%
year’s annual net purchase price year’s annual net
rent rent Latvia
Estonia 10–15% of the 1–4% of purchase 10–15% of the first No property transfer tax 18%
first year’s gross price. year’s gross annual
annual rent rent Lithuania
Finland 15-20% of the 1-4% of the 15-20% of the first 4% of purchase price 22%
first year’s gross purchase price year’s gross annual Luxembourg
annual rent rent. Sometimes
higher.
France 30% of the first 3-5% of purchase 10-20% of 4.8 – 5% of purchase 19.6% Notary fee of 0.825% if Netherlands
year’s net rent price annual net rent price over 16,770 Euros. All taxes
or percentage and costs are 6.5-7%
Norway
of savings made
through early
surrender Poland
Germany 3-4 month’s 3-5% of purchase 2.5 to 4 month’s 3.5 – 4.5 % of purchase 19% Notary fee of 1% of the
gross rent for price gross rent price purchase price
leases over 5 Portugal
years. 2.5-3.5
month’s rent for
Romania
leases under 5
years
Greece 1 month’s net 1-3% of purchase 1 month’s net 9-11% for properties 19% Notary fee of 1.2 % of Russia
rent or 10-12% price rent or 10-12% of with approval pre the purchase price. Legal
of annual rent annual rent 2006. Post 2006 VAT is fees of 1.2 – 1.5% of the
applicable purchase price Serbia
Hungary 2 month’s net 1.5–2.5% of 2 month’s net rent 10% of purchase price 20% Legal and notary costs of
rent purchase price 0.5-1% of the purchase
Slovakia
price
Ireland 10% – 15% of 1.5% of purchase 10% – 15% of the 6% of purchase price 21.5%
the first year’s price first year’s rent Spain
rent
Italy 10-12% of the 1-2% of sale price 10-12% of the VAT (can be reclaimed) 20% Registration tax at a
Sweden
net annual rent net annual rent fixed amount of EUR 168;
or percentage of 1% cadastral tax; 3%
savings made mortgage tax Switzerland
Turkey
Ukraine
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United Kingdom
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Country Leasing Freehold Subletting Property Transfer VAT Other Taxes/Costs
Tax
Denmark
Latvia 10–15% of the 1–4% of purchase 10–15% of the first 2% of market value of 18%
first year’s gross price year’s gross annual the property to a set
annual rent rent maximum of 30,000 LVL Estonia
Lithuania 10–15% of the 1–4% of purchase 10–15% of the first No property transfer tax 18%
first year’s gross price year’s gross annual
annual rent rent Finland
Luxembourg Between 1 1–3% of sale price Between 1 month Between 7.5–10.5% 15%
month rent to rent to 15% of the depending on city France
15% of the first first year’s net rent (recoverable if property
year’s net rent or percentage of sold within 6 months)
savings made Germany
Netherlands 12 -20% of the 1.5- 2% of the sale 12 -16% of the Overdrachtsbelasting 19%
first year’s net price first year’s net rent (transfer tax) is 6%
Greece
rent or percentage of (recoverable if property
savings made sold within 6 months)
Norway 15% of the first 0.5% – 2.5% 15% of the first 2.5% of purchase price 25% Fixed price of NK 1,850 is Hungary
year’s net annual depending on size year’s net annual payable on all mortgages
rent of property rent but sublease
fee may be Ireland
increased
Poland 1 to 3 month’s 1-2.9% of 1 to 3 month’s rent 2% of purchase price 22%
Italy
rent purchase price
Portugal Between 1 3-5% of purchase Between 1 month A property transfer tax 20% Purchaser will be
month net rent price net rent and 10% (“IMT”) of 6%, and the responsible for notary fees. Latvia
and 10% of the of the first year’s Stamp Tax of 0.8% both
first year’s net net rent based on purchase price
rent Lithuania
Romania 10-12% of the 1–3% of purchase 10-12% of the first 1-3% of purchase price 19%
first year’s net price year’s net rent Luxembourg
rent
Russia 10% of lease rate 6% of purchase 10% of lease rate State duty of 7,500 18%
price rubles for a legal body Netherlands
and 500 rubles for an
individual
Norway
SERBia 1 month’s net 2-3% of purchase 1 month’s net rent 2.5% of purchase price 18% Notary fee is paid,
rent price depending determined on a scale
on size of property based on the purchase Poland
price.
Slovakia 14-15% of one 1.5 to 3% of 14-15% of one VAT 19%
year’s rent purchase price year’s rent Portugal
Spain 8-12% of the 0.5-3% of 15% of the net VAT 16% Notary fee of 0.5-1% of
first year’s net purchase price annual rent the purchase price. Romania
annual rent
Sweden 10%-20% of the 2-3% of purchase 10%-20% of the 3% of purchase price 25% If purchasers require a
first years’ net price first year’s net mortgage deed, a 2% fee is Russia
annual rent annual rent or required based on value of
percentage of the deed
Serbia
savings made
Switzerland 10-15% of the 3-5% of the 10-15% of the first Transfer Tax is between 7.6% Variable registration cost,
first year’s net agreed purchase year’s net rent 1–3% and Registration land transfer taxes, notary Slovakia
rent price Fee is roughly 0.1% fees depending on canton.
Turkey 8–10% of the 1.5–2% of 8–10% of the first 1.5% of purchase price 18%
first year’s gross purchase price year’s gross rent Spain
rent
Ukraine 8% of annual 4-5% of the 8% of annual rent 20% Sweden
rent purchase price
United 10% of the first 1% of purchase 10% of the first 4% of purchase price 17.5%
Kingdom year’s net rent price year’s net rent and 1% on lease value Switzerland
(only on leases over
£150,000)
Turkey
Ukraine
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United Kingdom
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