RESEARCH

European Real Estate Handbook

A Guide to Doing Business in Europe
 Austria

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

• Typical Lease Terms

Latvia
• Legal Environment
• Occupancy Costs Lithuania
• Acquisition Costs
• General Market Practices Luxembourg

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

Tim Harlow Christophe Pineau Romania

Senior Director Head of Research
Large Corporate Coverage BNP Paribas Real Estate Russia

BNP Paribas Real Estate 32, rue Jacques Ibert

Serbia
90 Chancery Lane 92300 Levallois-Perret
London, WC2A 1EU France
Slovakia
United Kingdom
Tél: +33 (0)1 47 59 24 77 Spain
Tel: +44 20 7338 4155 Fax: +33 (0)1 47 59 21 35
Fax: +44 7747 758289 Email: Sweden
Email: christophe.pineau@bnpparibas.com
tim.harlow@bnpparibas.com Switzerland

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
Cyprus............................................................20
Czech Republic.............................................24
Denmark........................................................29
Estonia...........................................................34
Finland...........................................................38
France............................................................42
Germany........................................................47
Greece............................................................53
Portugal.........................................................98
Estonia
Romania...................................................... 103
Russia.......................................................... 108
Finland
Serbia.......................................................... 112
Slovakia.......................................................116 France
Spain........................................................... 120
Sweden....................................................... 125 Germany
Switzerland............................................... 130
Turkey......................................................... 135 Greece

Hungary.........................................................58 Ukraine....................................................... 140

Hungary
Ireland...........................................................62 United Kingdom........................................ 144
Italy................................................................67
Ireland
Latvia.............................................................72 SUMMARY
Lithuania........................................................76 Comparison of leasing costs...................149 Italy
Luxembourg..................................................80 Comparison of transactions costs........ 151
Netherlands.................................................84 Latvia

Lithuania

Luxembourg

Netherlands

Norway

Poland
Finland
Sweden
Portugal
Norway
Russia
Estonia Romania
Latvia

Denmark Lithuania Russia

United
Kingdom Serbia
Ireland Poland
Netherlands
Belgium Germany
Czech Rep Slovakia
Luxembourg Ukraine
Slovakia
France Austria
Hungary Spain
Switzerland Romania

Serbia Bulgaria Sweden

Italy
Portugal
Spain Turkey Switzerland
Greece

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 289 298 303 291
GDP Annual % 3.3 3.0 1.7 -3.9 Italy

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

Unemployment Rate % 4.7 4.4 3.8 4.7

Inflation Rate Annual % 1.7 2.2 3.2 0.4
Lithuania

Average Real Wages Annual % 1.0 0.2 -0.1 0.6

Luxembourg
GDP per head ($ at PPP) 36,054 37,492 38,810 37,360
Lending Interest Rate 4.2 5.1 5.6 5.4
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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
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 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

Hours of business Eastern Standard Time + 6 hours

Italy
The main business hours are Monday to Thursday
07:30am – 18:30pm with Friday seeing many Invest in Austria
Latvia
businesses close at 15:00pm. Further country information can be obtained from
the Invest in Austria bureau: (www.aba.gv.at) Lithuania
Visas
Austria is a member of the Schengen area Luxembourg
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss Netherlands

passport do not require a visa. Nationals from EU-

Norway
countries as well as Switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
Poland
United States of America do not require a visa for
entry. A residence permit is required if intending to Portugal
stay for a period exceeding 6 months.
Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
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 Austria

Belgium

Bulgaria

AUSTRIA Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is based on the Rent Act
(“Mietrechtsgesetz (MRG)”).
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
Czech Republic
Tenant and Landlord Obligations:
Normally the landlord is Denmark
responsible for building
maintenance, structural repairs, Estonia

Either a deposit of 3 months gross insurance, and technical

Lease Length: Terms are either for
a limited number of years
(Befristet) or for an indefinite
period of time (Unbefristet). Both
types are possible and can be
agreed on any building. In cases of
buildings constructed prior to 1967
the lease must be “Unbefristet”,
even if the parties would rather
agree a limited lease. Between
rent or a bank guarantee is
necessary to complete the lease.
Rights of Renewal: Unless an
option to renew was previously
agreed, leases will terminate at
the date of expiry, and must be
renegotiated. If an option to
renew was agreed, then the
current lease terms and current
Finland
installations and the tenant is
responsible for maintenance and
France
insurance within the premises.
Germany
Subletting: The tenant is not
permitted to sublet the premises Greece
without written consent from the
landlord, or unless it has been Hungary
otherwise authorized in the lease.
The landlord is not obliged to Ireland

3 and 7 year leases are typical in
Austria. In cases of “Unbefristet”
leases, the tenant will agree a
“Kundigungsverzicht” which is a
fixed period of time in which the
tenant is bound to the lease.
Rent Escalation/Rent Review:
Rent in Austrian leases is linked to
rent will typically continue for the accept the subtenant, but in
Italy
new lease. practice if the subtenant’s
covenant is good, then the sublet
Latvia
Break Options and Terminations: will generally be accepted.
In “Unbefristet” leases the tenant Lithuania
has full security of tenure. The
landlord cannot terminate the Luxembourg
lease except in cases of the tenant
being in breach of the lease. Break Netherlands

the consumer price index, and will
be increased either annually or
whenever the index has increased
by, for example, more than 5%.
Rent increases can sometimes be
pre determined in leases. Rent
reviews are uncommon, but are
being increasingly used in modern
office buildings with leases of 10
options are negotiable or some
Norway
lease agreements allow for the
premature exit of a lease under
Poland
the condition of a penalty. In most
cases the penalty for early lease Portugal
termination is subject to
negotiation and depends on Romania
current market conditions.
Russia

years or more.
Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
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AUSTRIA
Legal Environment Concerning
Brokerage Law
Austrian brokerage law is
governed by the Innung and
Maklergesetz which states that
companies where agents are
working must have a property
licence. An agent must prove
“Verdienstlichkeit” in order to
receive a fee. In order to fulfil
“Verdienstlichkeit” the agent must
have at least made a written offer
and inspected the property with
the tenant. Sometimes this
requirement becomes an issue if
the local management
unknowingly starts viewing
properties with agents that are
different from those instructed by
head office. This may result in the
tenant having to pay multiple
brokerage fees.
In order to avoid this situation the
real estate department of the
tenant must notify local
management not to go to market.
If a tenant has received offers but
has not viewed the property, they
can release their obligations to
pay a fee if they send back the
offers to the agent and formally
reject them.
Where another agent represents
the landlord, it is usual for the
total fee received from the
landlord and the tenant to be
split 50:50 between the two
agents. In some cases there is no
landlord fee and the agent
representing the tenant must
be prepared to give the landlord‘s
agent 50% of the fee he receives
from his client. This can cause a
problem in cases of tenant
representation instructions
as the client may be required to
pay a brokerage fee to the
landlord’s agent.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in Euros per
square metre per month and are
paid together with the rent
monthly in advance.
Local Property Tax: Paid by the
landlord and invoiced back to the
tenant through the service
charge.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually 3
times the gross monthly rent
(including parking) for a lease
agreement of more than 3
years. For leases between 2 –
3 years the fee is reduced to 2
months’ gross rent and for
less than 2 years the fee is
reduced to 1 month gross
rent.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
• Freehold – Fees are paid by
the seller and are negotiable Denmark
but are typically 1.5–3% of the
purchase price. Estonia
• Subletting – Same as leasing
Finland
above.
France
Property Transfer Tax (Stamp
Duty) (Grunderwerbsteuer):
Germany
For the purchase of a property,
the purchaser will be responsible Greece
for paying a property transfer
tax of 3.5%, which is based Hungary
on the purchase price of the
property plus VAT. Also the Ireland
purchaser will be responsible
Italy
for paying a registration fee
(Grundbucheintragungsgebühr)
Latvia
of 1.0%, which is based on the
purchase price of the property Lithuania
plus VAT.
Luxembourg
Value Added Tax: The VAT rate in
Austria is 20% and is payable on Netherlands
all forms of transactions including
Norway
rent, building service charge,
agents’ fees, notary costs, finance
Poland
tax and property transfer tax.
Portugal
General Market Practices
Basis of Measurement: There are Romania
two standard measuring
practices: Russia
Net Base Area or NGF (Netto
Serbia
Geschossfläche). This is the most
Slovakia
commonly used area calculation
and is used for calculating the Spain
rent. NGF includes main usable
space, ancillary space such as Sweden
toilets, kitchens, separating walls,
and circulation space. Areas used Switzerland
for technical use, structural walls
Turkey
and elevators are excluded.
Ukraine
BNP par i b as rea l estate 
United Kingdom
 Austria

Belgium

Bulgaria

AUSTRIA Cyprus

Gross Base Area or BGF (Brutto
Geschossfläche). This area is
measured from internal wall to
internal wall and includes all the
Czech Republic
Use of Space: Cellular and open
plan space are both common. Denmark
The use and density of space must
be in accordance with the Estonia

gross area within. “Arbeitsinspektorat”. These

Finland
guidelines govern issues such as
Fit Out/Reinstatement/ the distance from natural light,
France
Dilapidations: New office position of a desk, position of a PC
developments generally include on the desk and must be taken
Germany
raised floors, carpeting and into account when drafting a
partitioning as a standard with workspace plan. Greece
costs borne by the landlord.
Upgrading space to full air Holidays Hungary
conditioning is the responsibility There are certain times of the
of the incoming tenant as only a year when the speed of Ireland

top cooling/fan pipe system is transactions is significantly

Italy
normally installed in new reduced due to holidays. In May
buildings. When letting second there are 4 bank holidays,
Latvia
generation space, the landlord resulting in very short working
will assume the costs of installing weeks. August and January tend to Lithuania
partitioning according to a space generally be the main holiday
plan provided by the tenant. periods. Luxembourg
When vacating premises, the
tenant is responsible for Acknowledgement Netherlands

reinstating the space to the We would like to thank Natalia

Norway
original condition of the premises. Trihob and Richard Lemon of
Tenant improvements that were Dr Max Huber & Partners for
Poland
undertaken during occupancy assistance in the preparation of
cannot be sold to the landlord this country review. Portugal
unless otherwise stipulated in
the lease. Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 

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 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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 347 356 359 343
GDP Annual % 3.0 2.6 1.0 -4.5 Italy

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

Unemployment Rate % 8.2 7.5 7.0 7.9

Inflation Rate Annual % 2.3 1.8 4.5 0.5
Lithuania

Average Real Wages Annual % 0.2 1.3 -1.0 0.6

Luxembourg
GDP per head ($ at PPP) 33,890 35,510 36,590 35,110
Lending Interest Rate 7.5 8.6 8.0 6.9
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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
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 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
degree of autonomy over their own affairs. The
federal government is responsible for defence,
foreign affairs, justice and the national budget.The
parliament is bicameral and consists of a Senate and
Chamber of Deputies.
Legal
Belgium’s legal system is based on civil law system
but is influenced by English constitutional theory.
There are 5 levels of justice: Canton (225 courts),
South, Antwerp, Liege and Ostend.
Finland
Belgium is a railway hub for Europe having a
France
terminal for the Eurostar service (www.eurotunnel.
com) to France and the UK plus links to other
Germany
European rail networks. Travel details can be
obtained from the national rail network, SNCB/ Greece
NMBS (www.b-rail.be).
Hungary
Bus and tram information can be obtained for
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

Visas Invest in Belgium

Norway
Belgium is a member of the Schengen area Further country information can be obtained from
agreement. Holders of an EEA (EU Member States, the Invest in Belgium bureau:
Poland
Iceland, Liechtenstein and Norway) or Swiss http://invest.belgium.be
passport do not require a visa. Nationals from EU- Portugal
countries as well as Switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the Romania
United States of America do not require a visa for
entry. A residence permit is required if intending to Russia

stay for a period exceeding 3 months.

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 10

United Kingdom
 Austria

Belgium

Bulgaria

Belgium Cyprus

Typical Lease Terms
Legislation: Leases are governed
by local Belgian Civil Code. Under
the tax law, all lease contracts
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the “health” index
(gezondheidsindex/indice santé).
Czech Republic
Tenant and Landlord Obligations:
Under the Civil Code the landlord Denmark
is responsible for major repairs
and the replacement of major Estonia

have to be registered with the
Ministry of Finance within 4
months following the signature of
the lease agreements. As a result
three copies are normally signed,
one for each party and one for the
administration. Failure to register
means penalties can be claimed
by the tax administration and,
any third party, such as a new
owner who has acquired the
For pre-letting contracts “pre-
indexation” is often used.
Guarantee or Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
Normally it is stipulated in the
lease that a rental guarantee
(usually through a bank guarantee
installations such as HVAC and
Finland
lifts. The tenant is responsible for
small repairs and maintenance
France
works. Among other things, the
tenant shall regularly maintain
Germany
the interior and outside
paintwork, sanitary equipment, Greece
covering, pavements, electrical
devices, doors and windows and Hungary
their locks. Taxes and insurance
are paid by the landlord and re- Ireland

building, will not be bound by
the lease agreement. Both
landlord and tenant have a joint
responsibility for registration
of the lease. The lease contract
has to be registered in one of the
3 national languages (Flemish,
French or German).
or security deposit) is required.
Rights of Renewal: On lease
expiry the tenant has no security
of tenure. Typically it is stipulated
in the lease contract that there is
no automatic renewal of the lease
after the expiry date.
invoiced to the tenant.
Italy
Subletting: The tenant may
Latvia
assign or sublet the lease unless
forbidden by the terms of the Lithuania
lease. Nevertheless, most of lease
agreements mention that is not Luxembourg
permitted to sublet or assign the
lease without written consent Netherlands

Lease Length: The standard term
for regular occupation of leased
premises is 9 years, each party
having the right to terminate the
lease agreement at the end of
three-year period by giving six
months notice. Leases can be
granted for longer or shorter
periods, although anything over
Break Options and Terminations: from the landlord.
Norway
Many leases contain break
options, usually after 3 years
Poland
and/or 6 years, although this is
only market convention. These Portugal
breaks may be for either or both
parties. One party may not Romania
terminate the lease prior to the
break option without the prior Russia

nine years has to be authenticated approval from the other party.

Serbia
and passed by a notary.

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 11

United Kingdom

Belgium
Legal Environment Concerning
Brokerage Law
Individual real estate brokers
need to be registered with the
Belgian Institute for Real Estate
(BIV/IPI) to practice in Belgium.
Every company acting as broker
should be legally represented by
at least one managing director
listed with the Belgian Institute
for Real Estate.
Real estate brokers are selected
by either the landlord or the
tenant and will sign an agreement
to represent their client in a
transaction. It is common practice
in Belgium that real estate
brokers are appointed and paid
by landlord. It is considered a
conflict of interest if an agent
represents both the landlord
and the client, and the agent is
obligated to indicate if a conflict
of interest exists.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per annum and
are typically paid quarterly in
advance.
Service Charge: Service charges
are quoted in Euros per square
metre per annum and are paid
together with the rent quarterly
in advance, based on a provisional
amount, which is adjusted at least
once a year once the actual cost is
known. All private costs (such
water and electricity supply) are
directly charged to the tenant.
Local Property Tax (Onroerende
Voorheffing/Précompte
Immobilier) and Regional Taxes:
These taxes are paid by the
landlord on an annual basis and
re-invoiced to the tenant.
Other Taxes/Costs: In some cases
other taxes such as office tax, tax
per workstation, or tax on energy
can be levied. These are local
taxes and depend on the
municipality where the property
is located.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are negotiable
with the usual rate being 15%
of the first year’s gross rent.
Fees are usually paid by the
landlord but could be paid by
the tenant depending on
whom the agent represents.
• Freehold – Fees are usually
paid by the seller and are
negotiated on a case-by-case
basis depending on the
purchase price. Fees are
usually between 1-3% of the
agreed purchase price.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
• Subletting – Fees are
negotiable and can be based Denmark
on a percentage of the first
year’s gross annual rent Estonia
(typically 15%) or on a
Finland
percentage of the savings
made through the early
France
surrender.
Germany
Property Transfer Tax
(Registration Tax): The purchaser Greece
of a property is responsible for
paying a registration tax in the Hungary
region of acquisition. The
registration tax is different for Ireland
each region. In Flanders the
Italy
registration tax is 10%. In some
circumstances, 60% of the
Latvia
registration costs may be
recovered if the property is sold Lithuania
within 2 years of buying it. In
Wallonia and Brussels the Luxembourg
registration tax is 12.5%.
Developers often operate under Netherlands
trader or “marchand de bien”
Norway
status (i.e. company or individual
whose business mainly consists of
Poland
buying and selling real estate, and
who is registered as such) with Portugal
reduced registration tax rate.
Romania
One of the common ways to avoid
registration tax is to acquire the Russia
real estate through the purchase
Serbia
of company shares, which carries
added advantages in that capital
Slovakia
gains on shares are generally tax
exempt for individuals as well as Spain
companies. Another way to reduce
the registration tax is not to buy Sweden
the real estate but rather opt for a
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

minimum 27 years and maximum
99 years) or for a right to build (of
maximum 50 years) on the real
estate. The granting of such rights
• UGEB-ULEB – For the
measurement of office
buildings, the gross area is
used and a proportion of the
Czech Republic
upgrading of the office space is at
a cost to the tenant. All works, Denmark
installations and additions that
the tenant may undertake on the Estonia

is subject to a registration tax rate
of 0.2% calculated on the total
amount of the rents and charges
for the duration of the contract.
Value Added Tax: VAT in Belgium is
currently at 21%. Rent payments
are not subject to VAT. The renting
of parking space where the tenant
has his main occupation elsewhere
is considered as the provision of a
common general area of the
building (entrance hall, lobby
area, elevators) is included.
The gross area is measured
from the exterior of the
windows and the axis of
separating walls.
• BACS – Uses two main
definitions, which are gross
external area (GEA) and the
gross area (GA). GEA is the
premises during the lease require
Finland
prior approval from the landlord.
They shall at the end of the lease
France
or at the end of renewal period,
belong to the landlord unless the
Germany
latter demands the return of the
premises to their original state. Greece
Restoration to the original state is
at the tenant’s cost. Hungary
Use of Space: Premises in Belgium Ireland

service rather than a letting and is
therefore in the VAT regime. The
renting of warehouses where
offices constitute less than 10
percent of the total space is also
subject to VAT.
VAT is payable on acquisition
of new building and construction
area in the building measured
externally at each floor level.
GEA is applied for the
measurement of industrial
buildings and warehouses and
residential buildings. GA is the
area of the building measured
from the midpoint of the
windows to the midpoint of
is primarily cellular office
Italy
construction but open plan office
premises are increasingly favored.
Latvia
Holidays Lithuania
There are no times of the year in
which the speed of transactions Luxembourg
are reduced due to holidays. In
the period between Christmas Netherlands

for new commercial property
(lesser rates exist for residential)
as well as professional fees and
letting fees. On the acquisition of
land no VAT is paid but
registration tax is payable.
General Market Practices
Basis of Measurement: Two
the opposite wall for each and New Year some offices are
Norway
floor level. GA is applied for closed but generally firms will
the measurement of offices remain open all year round.
Poland
and is also the basis for
measurement commonly used Portugal
for the calculation of the rent
and service charges. Romania
Fit Out/Reinstatement/ Russia

methods, which are very similar, Dilapidations: Inventories of

are used in Belgium to define the
floor area. The first method is
according the UGEB-ULEB
(Belgian Union of Chartered
Surveyors) and the second
method is according the BACS
(Belgian/Luxembourg Association
of Chartered Surveyor).
Serbia
fixtures upon entry and upon
vacation of the premises, plus
Slovakia
movable items, are drawn up and
permanently binding for both Spain
parties. Office buildings usually
include carpet, suspended ceilings, Sweden
lighting, heating and electrical
servicing. Partitioning and Switzerland

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 77 81 86 83
GDP Annual % 6.3 6.2 6.0 -3.8 Italy

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

Unemployment Rate % 9.6 7.7 6.3 9.5

Inflation Rate Annual % 7.3 8.4 12.3 3.5
Lithuania

Average Real Wages Annual % 2.1 11.3 9.2 -0.5

Luxembourg
GDP per head ($ at PPP) 10,400 11,400 12,450 12,140
Lending Interest Rate 8.9 10.0 10.9 11.1
Netherlands
Exchange Rate to US$ 1.5576 1.4290 1.3305 1.4733

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

The country code is + 359.

Italy
Hours of Business
Businesses usually open around 08:30am and close Coordinated Universal Time (UTC) + 2 hours
Latvia
around 18:00pm. Eastern Standard Time + 7 hours
Lithuania
Visas Invest in Bureau
Bulgaria is now an EU member so holders of an EEA Further country information can be obtained from Luxembourg
(EU Member States, Iceland, Liechtenstein and the Invest Bulgaria bureau:
Norway) or Swiss passport do not require a visa. www.investbulgaria.com Netherlands

Nationals from EU-countries as well as Switzerland

Norway
and Liechtenstein may remain for an unlimited time.
Citizens of the United States of America do not
Poland
require a visa for entry. Foreigners who stay or
intend to stay longer than six months may acquire Portugal
permission for temporary residence for up to one
year which may also be extended. Any foreigner Romania
wishing to stay on the basis of an employment
contract must acquire a work permit from the local Russia

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

Typical Lease Terms
Legislation: Leases are governed
by the Bulgarian Law on
Obligations and Contracts/State
Guarantee and Security Deposit:
Generally a deposit of 1 to 3
months gross rent is payable
upon the signing of the lease
Czech Republic
following the property transfer
date. If the lease contract is not Denmark
registered or notary authenticated,
it is valid and binding on the new Estonia

Gazette issue No 275/1950/. There
is no special law concerning
commercial leases.
Lease Length: No minimum initial
lease length is legally prescribed
but the maximum lease length is
10 years. If a longer term is
negotiated in a contract, the
extension clause is legally
considered null and void with the
contract.
Rights of Renewal: Options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may be
automatically renewed for an
indefinite period, if the tenant
continues to use the property
after the end of the lease and
there is no objection by the
owner for an indefinite term and
Finland
can be terminated with one month
notice.
France
Tenant and Landlord Obligations:
Germany
Tenant obligations are for internal
repair and maintenance whilst Greece
landlord obligations are for
external and structural repairs. Hungary
There are no standards for
insurance clauses so most lease Ireland

law only recognising the first ten
10 years. In practice negotiation of
10 years lease is difficult as most
landlords do not feel secure and
prefer leasing for a shorter period.
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the Harmonized Index of
landlord.
Break Options and Terminations:
Break options and termination of
lease contracts for a definite term
have to be negotiated between
the parties along with
compensation. Lease contracts for
indefinite term may be terminated
contracts do not deal with it. But
Italy
it is common, especially for big
landlords with mostly office
Latvia
space, to oblige the tenant to
obtain full property insurance for Lithuania
the premise.
Luxembourg
Subletting: Full subletting is
allowed only with the written Netherlands

Consumer Prices (HICP) published
by the Bulgarian National Statistic
Institute. The basis of rent
escalation is freely negotiable and
in the past escalation using the
EUROSTAT index of consumer
prices was not uncommon.
However, over the last few years
the accepted norm is for
by any of the parties with one
month pre-notice.
In case of transfer of the leased
property on part of the landlord
(sale, liquidation, foreclosure,
inheritance) the lease contract
shall be valid and binding the new
owner if it is registered in the Real
consent of the landlord. Such
Norway
consent may be given in general
form as a clause of the lease
Poland
contract. Partial subletting is
allowed without consent of the Portugal
landlord unless the lease contract
explicitly prohibits it. Romania
Russia

escalation is the Bulgarian HICP Estate Register with the

with a minimum of 10%. It is not
uncommon, especially for big
companies with mostly office
space, to have rental adjustments
after 5 years on the basis of a
market survey of rents.
Serbia
Recordation Agency. If the lease
contract is not registered but has a
Slovakia
notary authenticated date of
signing, it shall be valid and Spain
binding on the new owner until
either the expiry date or one year Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 16

United Kingdom
 Austria

Belgium

Bulgaria

bulgaria Cyprus

Legal Environment Concerning
Brokerage Law
There is no law or regulation of
the activities of real estate
complexes that have
arrangements with a property
management company. For flats
in other residential buildings
Czech Republic
There are three ways of
determining the garbage fee for Denmark
non-residential property of
companies: (i) on the basis of the Estonia

brokers in Bulgaria. Law is under
preparation and it will introduce
licensing of the brokers based on
educational and professional
experience requirements.
Unless the agent has signed
brokerage service agreement with
the client in advance, there is no
guarantee of payment by the
client if the latter signs a lease or
service charge is not paid to the
landlord but there is a common
space maintenance fee collected
by the building chairperson that is
substantially lower.
Local Property Taxes and
Municipal Garbage Fee: The lease
contracts usually commit tenants
to paying the garbage fee for the
property. Payment of the local
number of garbage collection bins
Finland
used; (ii) through direct
negotiation with a company
France
contracted for garbage collection
and, (iii) on the basis of the tax
Germany
assessment value of the property..
For year 2009 the garbage fee for Greece
non-residential property of
companies in Sofia 12 per Hungary
thousand and for property of
individuals and for residential Ireland

sale-purchase agreement for
property introduced by the agent.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are usually quoted in
Euros per square metre per month
property tax by the tenant is rare. property of companies – 4 per
Italy
The property tax and the garbage thousand.
fee are determined by the
Latvia
municipal council of the Acquisition Costs
respective city at the end of Typical acquisition costs that a Lithuania
February each fiscal year. The company will have to pay when
property tax and the garbage fee buying or leasing new premises Luxembourg
are charged for non-residential include:
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.
Service Charge: Building service
charges for commercial leases
vary between 1 to 3 Euros per
square metre per month, and in
some cases like Malls it may
and for residential property of
companies, the charge is based on
the tax assessment value of the
property. That is determined by
the municipal body on a yearly
basis and is lower than market
value. For 2009 the property tax
1 month’s net rent plus VAT.
Poland
• Freehold – Fees are usually
between 2.5% and 3%. For Portugal
reasonably large transactions
lower fees are negotiated, Romania
depending on the size of the
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

bulgaria
It should be noted that it is
not uncommon in Bulgaria for
agents to get paid by both parties
in a transaction.
Property Transfer Tax: For
purchases of property, the
transfer tax depends on the
municipality and ranges between
1.3% to 2.6% of the purchase price
or the tax assessment value of the
property exchanged, whichever is
higher. The exact percentage is
determined by the municipal
council of the respective city. For
Sofia the property transfer tax for
year 2009 is 2.5%. The law states
that purchaser is liable for the
property transfer tax unless other
terms are negotiated between the
parties. It is common for this tax
as well as the other expenses for
the transfer to be shared between
the parties.
If the tax assessment value of the
property is substantially lower
than its market price, it is usual for
schemes that avoid payment of the
property transfer tax on the real
price to be applied. For
transactions between individuals
and for sale of property from
construction companies to
individuals, the prices defined in
the notary deeds for the property
transfer are usually equal to the
tax assessment value. In such
cases other agreements or legal
schemas are used for protection of
the parties with respect to the
payment of the real price. It is not
uncommon for owners to hide the
real price, not just for the property
transfer expenses but also for
avoiding payment of income tax.
VAT: VAT in Bulgaria is currently
20%. VAT is applicable on regulated
land owned by legal entities
registered for VAT. Rents for
residential needs are excluded of
VAT. Individuals, who offer
property for lease, do not accrue
VAT in case the income from leases
does not exceed BGL 50,000 per
year (circa EUR 25,000).
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Other Taxes/Costs: To finalise the
purchase of a property a notary Denmark
fee is paid, determined on a scale
based on the purchase price, but Estonia
not exceeding BGL 6000 (circa
Finland
EURO 3,000). The other cost is the
fee for registration of the deal in
France
the Real Estate Register with the
Recordation Agency, which is 0.1%
Germany
on the purchase price. Usually the
purchaser assumes these costs, Greece
but it is common to be shared
between the parties. Hungary
There is also an obligatory Ireland
minimum of legal fee for
Italy
transactional assistance, which is
BGL 700 for the first BGL 100,000
Latvia
of the purchase price and 0.1%
over the excess amount. Legal Lithuania
due diligence fees are separate
and usually determined on Luxembourg
hourly bases.
Netherlands
General Market Practices
Norway
Basis of Measurement: There is
no standard basis of
Poland
measurement in Bulgaria. For
leases, the premises are typically Portugal
measured based upon the built up
area stated on architectural plans Romania
for planning approval. For
property purchases construction Russia
companies imposed Gross Area as
Serbia
basis of measurement, which
includes the built up area and the
Slovakia
proportional part of all common
space areas of the building, which Spain
may reach even 30% of the built
up area of the premises. Sweden
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

tenant has a legal responsibility affected by holidays in August

to remove improvements from the
premises at the expiry of the
lease, in practice this is rarely
required as the majority of
landlords prefer the
improvements to remain. Tenant
is responsible to repairing any
dilapidations, unless it is proven
that the damages are caused a
way that tenant may not be held
Finland
and from Christmas till mid
January. Part this is because the
France
Real Estate Register with the
Recordation Agency does not
Germany
provide the full range of services
over these periods. Greece
Acknowledgement Hungary
We would like to thank
Konstantinos Markogiannakis Ireland

responsible by law or contract. and Anna Nazou of Danos &

Italy
Associates for their assistance in
Use of Space: Traditionally older the preparation of this country
Latvia
offices in Bulgaria have tended to review.
be constructed as cellular offices. Lithuania
Recently, in newer buildings,
offices are predominantly Luxembourg
open plan.
Netherlands

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 19 20 21 21
GDP Annual % 4.1 4.4 3.7 0.7 Italy

Net direct foreign investment (US$ millions) 975 1018 364 342
Labour Force (millions) 0.4 0.4 0.4 0.4 Latvia

Unemployment Rate % 4.5 3.9 3.6 4.8

Inflation Rate Annual % 2.5 2.4 4.7 1.0
Lithuania

Average Real Wages Annual % 3.4 1.0 1.1 2.8

Luxembourg
GDP per head ($ at PPP) 22,610 27,100 28,420 28,490
Lending Interest Rate 6.7 6.8 7.2 8.0
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

Hours of Business Netherlands

Businesses usually open around 08:30am and close

Norway
around 18:00pm.

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

unlimited time. Citizens of the United States of

Serbia
America do not require a visa for entry. Foreigners
who stay or intend to stay longer than three months
Slovakia
must acquire a residency permit from the Civil
Registry & Migration Department. Spain

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
commercial leases are 5 years
minimum although office leases
are usually between 2 to 5 years
long. Residential leases are most
1-4 years and are negotiable.
Rent Escalation/Rent Review:
Residential rental amounts are
based on number of bedrooms
and the condition of premises.
2 months notice.
Break Options and Terminations:
These are agreed between the
parties, usually with a penalty
amount.
Tenant and Landlord Obligations:
The tenant is usually responsible
for internal repairs and the
landlord for structural works
Rents: Rents are quoted in Euros
Finland
per square metre per month and
are paid monthly in advance.
France
Service Charge (Koinohrista):
Germany
Building service charges are
quoted in Euros per month and Greece
are paid monthly in advance with
the rent. Utility charges Hungary
(electricity, water, telephone) and
any charges related to common Ireland

With commercial properties the
rent is usually agreed at market
rate on a per square meter basis
per month. According to Tenancy
Law, landlords cannot request
more than a 14% increase every
2 years.
Guarantee and Security Deposit:
and the maintenance of any
common areas.
Subletting: Specifically prohibited
unless agreed by both parties.
Legal Environment Concerning
Brokerage Law
Real estate agents need to be
areas of building are payable by
Italy
the tenant. Common charges are
billed according to square meters
Latvia
occupied. Annual garbage fee as
imposed by the local Municipality Lithuania
is payable by the tenant.
Luxembourg
Local Property Taxes: Payment is
the responsibility of the landlord. Netherlands

The standard amount is a one licensed and registered in Cyprus.

month rental, but other options are
available. For example if tenant is a
company, the landlord may request
the personal guarantee of a Cypriot
resident or a bank guarantee for an
agreed amount.
Norway
It is common practice that the
agent’s commission is paid by the
Poland
landlord. Therefore if a landlord
accepts the services of an agent Portugal
and rental is agreed, he is
obligated to pay the commission. Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 22

United Kingdom

Cyprus
Acquisition Costs
The tenant does not incur any
charges for rental of premises,
unless the tenant has hired the
services of an agent and a search/
find fee has been agreed.
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually
1 month’s net rent for a 2 year
lease, if a longer lease period
then it is a percentage of the
annual rent; 6% on first year
rent, 3% on second year, and
1% on each year thereafter.
• Freehold – 3% of purchase
price
• Sublease – Same as leasing
fees above.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Property Transfer Tax: For the Holidays
purchase of a property the There is no particular period Denmark
purchaser will be responsible for during the year when the speed of
paying a property transfer tax of transactions is significantly Estonia
3-8% on the declared purchase affected by holidays. Peak holiday
Finland
price, to the Land Registry of the periods tend to be during
Republic of Cyprus. midsummer (mid-August) and
France
between Christmas and New Year.
VAT: VAT in Cyprus is currently
Germany
15%. Professional fees are subject Acknowledgement
to VAT. However, it is not We would like to thank Greece
applicable on the lease or sale of Konstantinos Markogiannakis
commercial property. and Anna Nazou of Danos & Hungary
Associates for their assistance in
Use of Space: Traditionally older the preparation of this country Ireland
offices in Cyprus have tended to review.
Italy
be constructed as cellular offices.
Latvia
General Market Practices
Basis of Measurement: Lithuania
Measurement is based on actual
square meters and age/condition Luxembourg
of the total physical structure
of building. Netherlands
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 Prague

Cyprus

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 222 235 242 235
GDP Annual % 6.8 6.0 3.2 -3.0 Italy

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

Unemployment Rate % 8.1 6.6 5.4 8.7

Inflation Rate Annual % 2.5 2.9 6.3 1.9
Lithuania

Average Real Wages Annual % 3.8 4.3 2.1 0.1

Luxembourg
GDP per head ($ at PPP) 22,360 24,340 25,690 25,080
Lending Interest Rate 5.6 5.8 6.3 6.5
Netherlands
Exchange Rate to US$ 22.5956 20.2937 17.0711 19.9623

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 Cyprus

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
(Poslanecka Snemovna) is effectively a continuation
of the federal parliament of Czechoslovakia. The
president is elected by parliament and serves for
a five-year term.
The Czech Republic has an extensive rail and bus
Finland
system. Travel details around Prague can be
obtained from the transport operators for Prague
France
(www.dpp.cz/en) and Czech Republic
(http://jizdnirady.idnes.cz/vlakyautobusy/spojeni)
Germany

Legal Structure International Dialling code Greece

The legal system of the Czech Republic is based on The country code is + 420
civil law system but incorporates old Austro- Hungary
Hungarian legal codes. The Czech court system Coordinated Universal Time (UTC) + 1 hour
consists of district, regional, and high courts. The Eastern Standard Time + 6 hours Ireland

Supreme Court is the highest court of appeal.

Italy
Invest in bureau
Hours of business Further country information can be obtained from
Latvia
The main business hours are Monday to Friday the Invest in the Czech Republic bureau:
08:00am – 17:00pm. www.czechinvest.org Lithuania

Visas Luxembourg
The Czech Republic is a member of the Schengen
area agreement. Holders of an EEA (EU Member Netherlands

States, Iceland, Liechtenstein and Norway) or Swiss

Norway
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein
Poland
may remain for an unlimited time. Citizens of the
United States of America do not require a visa for Portugal
entry. A residence permit is required if intending to
stay for a period exceeding 3 months. Foreign Romania
nationals whose stay in the Czech Republic will
exceed 30 days are obliged to register within 30 days Russia

on their arrival in the Czech Republic with the Alien

Serbia
and Border Police.

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 25

United Kingdom
 Austria

Belgium

Bulgaria

CZECH REPUBLIC Cyprus

Typical Lease Terms
Legislation: The law that governs
commercial leases is based on the
Rent Act.
Guarantee and Security Deposit:
Landlords usually require a credit
rating or a deposit of 3 months
rent including VAT or a bank
Czech Republic
Tenant and Landlord Obligations:
The landlord is normally Denmark
responsible for building
maintenance, insurance, and Estonia

guarantee to complete the lease. technical installations and the

Lease Length: 5 year and longer
term leases are usual in Czech
Republic for A-class offices. The
lower the standard of property is,
the higher the flexibility in terms
of lease length so certain B-class
projects can offer shorter leases.
Rent Escalation/Rent Review:
Typically rents are indexed
Some developers require a deposit
or bank guarantee equal to
6 months including VAT.
Rights of Renewal: If an option to
renew was not previously agreed
the lease will terminate and must
be renegotiated.
Break Options and Terminations:
Finland
tenant is responsible for
maintenance and insurance
France
within the premises.
Germany
Subletting: The subletting of
premises is allowed but only with Greece
the prior written consent of the
landlord. The landlord is not Hungary
required to approve the proposed
sublease but must give Ireland

annually (upwards only) based on
the Consumer Price Index (HCPI
EU 25 published by Eurostat) or
whenever the index has increased
by a predetermined amount
specified in the lease. Rent
increases can sometimes be
pre-determined in leases.
Break options are negotiable. reasonable grounds for denying
Italy
However, tenants should be aware a sublease so in practice they are
of notice periods as options will generally accepted.
Latvia
expire and become null and void if
notice is not delivered on time. Lithuania
Some lease agreements allow for
the termination of the lease prior Luxembourg
to the break option under the
condition of a penalty, subject Netherlands

to negotiations and current

Norway
market conditions.

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 Cyprus

Legal Environment Concerning
Brokerage Law
There is no legal requirement to
have a license in order to trade as
Czech Republic
Acquisition Costs General Market Practices
Typical acquisition costs that a Basis of Measurement: There are Denmark
company will have to pay when two standard measuring
buying or leasing new premises practices: Estonia

an agent in the Czech Republic. include:

Each party typically pays their • Net Lettable Area or Building Finland

respective agent. On occasion the Agents Fees Owner’s and Manager’s

landlord’s agent may sometimes
earn a fee of half a month’s net
rent from the tenant or the
landlord. The tenant’s agent only
earns fees directly from the
tenant.
Occupancy Costs
• Leasing – Fees are generally
2 months’ net rent.
• Freehold – Fees, paid by the
seller, are negotiable but are
typically equal to 1.5–2.5% of
the purchase price.
• Subletting – Subletting is the
same as leasing.
France
Association Standard (BOMA).
This is the most commonly
Germany
used area calculation and is
used for calculating the rent. Greece
BOMA includes main usable
space, ancillary space such as Hungary
toilets, kitchens, separating
walls, and circulation space. Ireland

The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
or US Dollars per square metre
per month and are paid monthly
or quarterly in advance.
Service Charge: Building service
Property Transfer Tax (Stamp
Duty): For the purchase of a
property a property transfer tax of
5% will be levied, based on the
purchase price of the property plus
VAT. The responsibilities of the
costs are usually negotiated and
very often the costs are split 50:50
Areas used for technical use,
Italy
structural walls and elevators
are excluded. A “gross-up”
Latvia
factor of 5–12% may be
applied to the Net Lettable Lithuania
Area, particularly if the
building is new. Luxembourg
• Gross Base Area or BGF
(Brutto Geschossfläche). This Netherlands

charges are quoted in Euros or US
Dollars per month or quarter and
are paid monthly or quarterly in
advance along with the rent.
Sometimes service charges are
charged in the local currency.
Local Property Tax: Paid directly
by the landlord and billed to the
between seller and purchaser. area is measured from
Norway
internal wall to internal wall
Value Added Tax: The VAT rate in and includes all the gross
Poland
the Czech Republic is currently area within.
22% and payable on all forms of Portugal
transactions including rent,
building service charge, agents Romania
fees, notary costs, and property
transfer tax. Russia

tenant via the service charge.

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 27

United Kingdom
 Austria

Belgium

Bulgaria

CZECH REPUBLIC 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 is reduced due to Estonia

partitioning as a standard. holidays. August and January tend

Finland
Upgrading space to full air to generally be the main holiday
conditioning is the responsibility period.
France
of the tenant. When letting
second generation space, the Acknowledgement
Germany
landlord will assume the costs of We would like to thank Natalia
installing partitioning according Trihob and Richard Lemon of Greece
to a space plan provided by the Dr Max Huber & Partners for
tenant. When vacating premises, assistance in the preparation of Hungary
the tenant is responsible for this country review.
reinstating the space to the Ireland

condition in which they had first

Italy
occupied the space, allowing for
standard wear and tear. Tenant
Latvia
improvements that were
undertaken during occupancy Lithuania
cannot be sold to the landlord
unless otherwise stipulated in the Luxembourg
lease. The landlord has the option
of leaving the premises in their Netherlands

current condition.
Norway

Use of Space: Cellular and open

Poland
plan space are both common.

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 187 191 188 182
GDP Annual % 3.3 1.6 -1.1 -3.5 Italy

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

Unemployment Rate % 3.9 2.8 1.9 4.3

Inflation Rate Annual % 1.9 1.7 3.4 0.9
Lithuania

Average Real Wages Annual % 1.9 2.9 0.7 2.7

Luxembourg
GDP per head ($ at PPP) 35,491 36,267 36,420 35,210
Lending Interest Rate 5.4 6.3 6.9 5.5
Netherlands
Exchange Rate to US$ 5.9468 5.4437 5.0981 5.6196

Norway

Major Cities
Poland
City Core Population
Copenhagen 499,148 Portugal
Aarhus 286,668
Odense 183,691 Romania
Aalborg 161,661
Russia

Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division

Serbia

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)
and a supreme court for appeals not resolved by
the two high courts.
Hours of Business
The main business hours are Monday to Friday
around 08:00am – 17:00pm.
Visas
Denmark is a member of the Schengen area
agreement. Holders of an EEA (EU Member States,
international airports at Århus, Aalborg and Billund.
Finland
Greater Copenhagen is served by the “S” train under/
France
overground suburban rail system. Denmark’s rail
service connects Copenhagen with the towns of
Germany
Jutland, Funen and Zealand. Danske Statsbaner –
Danish State Railways (DSB) – runs the service and Greece
travel information can be found at their website
www.dsb.dk/Rejseplan/bin/query.exe/en. Hungary
International Dialling Code Ireland

Iceland, Liechtenstein and Norway) or Swiss The country code is + 45

Italy
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein Coordinated Universal Time (UTC) + 1 hour
Latvia
may remain for an unlimited time. Citizens of the Eastern Standard Time + 6 hours
United States of America do not require a visa for Lithuania
entry. A residence permit is required if intending to Invest in Bureau
stay for a period exceeding 3 months. Further country information can be obtained from Luxembourg
the Invest in Denmark bureau:
www.investindk.com Netherlands

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

Typical Lease Terms
Legislation: The legislation that
governs commercial leases
(Erhverslejeloven) is new and
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
Czech Republic
Tenant and Landlord Obligations:
Maintenance and insurance Denmark
obligations are not regulated by
law and can be divided freely Estonia

came into effect in 2000.
Lease Length: Typically the term
of a lease is not specified and is
expected to be ongoing. Generally
the tenant and the landlord will
agree to an interminable period
whereby the lease will be
guaranteed for that period of
time, for example, in new
buildings the tenant is guaranteed
access to company information. A
bank guarantee of 6 months gross
rent is necessary to complete the
lease although a deposit may
sometimes be paid.
Rights of Renewal: Tenants do
not have a legal right to renew
the lease. As most leases in
Denmark are for an unspecified
length of time it is uncommon for
between the tenant and landlord.
Finland
Normally the landlord is
responsible for building
France
maintenance, insurance, and
technical installations and the
Germany
tenant is responsible for
maintenance and insurance Greece
within the premises.
Hungary
Subletting: The tenant has, by
law, no right to transfer the lease Ireland

a 10 year lease with the
possibility of early termination by
the tenant after 5 years.
Rent Escalation/Rent Review:
Rents are indexed annually to the
Consumer Price Index but may
also be adjusted automatically
whenever the CPI changes by a
leases to contain a right to renew agreement or sublease space
Italy
the lease. For leases that have without the landlord’s consent.
specified terms the lease may be Generally subletting is allowed
Latvia
renewed after renegotiation with with the prior written consent of
the landlord. the landlord. Lithuania
Break Options and Terminations: Luxembourg
There is a possibility to break/
renegotiate the agreement if this Netherlands

predefined amount. clause is included in the

Norway
agreement. In situations where
the lease term is not specified,
Poland
the lease term is considered to be
ongoing until either the tenant or Portugal
landlord gives notice of
termination. The landlord is not Romania
allowed to terminate an ongoing
lease unless the tenant has not Russia

performed its covenants. If the

Serbia
landlord terminates the lease
prematurely he is liable for
Slovakia
compensation to the tenant.

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
transactions. Typically brokers
represent the landlord, but
recently some corporations have
started to use consultants during
negotiations to protect their
interests. There are no limitations
to advice given by agent, on legal
or financial matters.
The common method for sales of
Rents: Rents are quoted in Danish
Kroner (DKK) per square metre
per annum and are paid in
advance on a quarterly basis.
Service Charge: Building service
charges are quoted in Danish
Kroner (DKK) per square metre
per annum and are paid in
advance on a quarterly basis
along with the rent. All service
premises include:
Finland
Agents Fees
France
• Leasing – Fees are usually
approximately 15 % of the first
Germany
year’s annual net rent. Each
party typically pays the fee of Greece
their contracted agent.
• Freehold – Fees are paid by Hungary
the seller and are negotiable
but are usually between 1 – Ireland

properties are options for selected
buyers to place an offer and
“closed bidding”. “Open bidding”
sales are primarily used when a
public property is being sold. As
the name implies, all offers after
the deadline are openly known by
all interested parties.
charges must be agreed upon 3% of the agreed purchase
Italy
separately in the lease agreement. price depending on
The tenant normally pays for transactions size.
Latvia
heating and electricity themselves • Subletting – Same as leasing.
via separate agreements with Lithuania
distributors (power company). Property Transfer Tax (Stamp
The landlord typically invoices Duty): During the purchase of a Luxembourg
building insurance through the property the purchaser will be
service charge. responsible to pay a transfer tax Netherlands

equal to 0.6% of the agreed

Norway
Local Property Tax: Paid by the purchase price. The payment of
landlord directly but this is the transfer tax on properties
Poland
typically invoiced to the tenant located in Jutland is split between
through the service charge. buyer and seller. Portugal

Value Added Tax: The VAT rate in Romania

Denmark is 25% and is payable on
all forms of transactions including Russia

rent, building service charges and

Serbia
agents fees.

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

Fit Out/Reinstatement/ Hungary

Dilapidations: Premises are
typically built out to tenant Ireland

specifications and financed by the

Italy
landlord. The cost of the fit out is
charged to the tenant as
Latvia
additional rent dependant on the
structure of the transaction. The Lithuania
tenant’s obligation, to return the
premises to the condition it was Luxembourg
originally in when they took
possession of the premises. This is Netherlands

dependant upon the structure of

Norway
the original transaction with the
landlord and can vary from
Poland
property to property.

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 25 26 25 22
GDP Annual % 10.4 6.3 -3.6 -13.0 Italy

Net direct foreign investment (US$ millions) 673 1,115 1,050 950
Labour Force (millions) 0.7 0.7 0.7 0.7 Latvia

Unemployment Rate % 5.9 4.7 5.7 12.4

Inflation Rate Annual % 4.4 6.6 10.4 0.0
Lithuania

Average Real Wages Annual % 11.6 13.0 3.3 -15.0

Luxembourg
GDP per head ($ at PPP) 18,995 20,780 20,480 18,560
Lending Interest Rate 5.0 6.5 8.6 8.2
Netherlands
Exchange Rate to US$ 12.4729 11.4368 10.6945 11.7865

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

Riigikogu. St Petersburg and Moscow. Outside of Tallinn there

Finland
is an extensive bus service. Public transport
Legal Structure information can be obtained from the Tallinn city
France
The legal system in Estonia is based on civil law but council website (www.tallinn.ee/eng) and
has been influenced by the German legal system. (http://soiduplaan.tallinn.ee)
Germany
Estonia has a three-level court system consisting of
four county courts that are divided into regional International Dialling Code Greece
courthouses and two courts of appeal that includes The country code is + 372
the highest court, the Supreme Court. Hungary
Coordinated Universal Time (UTC) + 2 hours
Hours of Business Eastern Standard Time + 7 hours Ireland

The main business hours are Monday to Friday

Italy
09:00am – 17:00pm. Invest in Bureau
Further country information can be obtained from
Latvia
Visas the Invest in Estonia bureau:
Estonia is a member of the Schengen area www.investinestonia.com/ Lithuania
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss Luxembourg
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein Netherlands

may remain for an unlimited time. Citizens of the

Norway
United States of America do not require a visa for
entry. A residence permit is required if intending to
Poland
stay for a period exceeding 3 months.

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

Typical Lease Terms
Lease Length: Leases between
3 and 5 years are typical, but an
unlimited lease may be agreed.
Czech Republic
Break Options and Terminations: Legal Environment Concerning
The tenant has no right by law to Brokerage Law Denmark
prematurely terminate the lease. There are no certain laws on
Break options can be agreed in brokerage. There are brokers Estonia

Older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
Rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer Prices
Index (or a percentage of CPI) and
are adjusted annually. Rent
rental agreements. A typical associations that grant
Finland
break option is the termination of certificates based on exams.
the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
landlord and tenant to agree to The following charges are payable
Germany
an early termination depending by the tenant:
on the market conditions and the Greece
specific nature of the lease. Rents: Rents are quoted in local
currency on a square metre per Hungary
Tenant and Landlord Obligations: month basis and are paid on a
The landlord is usually monthly basis. Typically Ireland

reviews are upward adjustment
only.
Guarantee and Security Deposit:
Rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. The landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
agreements contain exchange
Italy
rate protection clauses against
currency devaluation risks.
Latvia
Service Charge: Building service Lithuania
charges are quoted in local
currency, on square metre per Luxembourg
month basis and are paid monthly
with the rent. These charges Netherlands

Rights of Renewal: The tenant is the property. include heating, water/sewage,

afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Norway
electricity and maintenance.
Subletting: The tenant is not
Poland
permitted to sublet the premises Local Property Tax: Local
without the prior written consent property tax is paid by the Portugal
of the landlord. landlord directly but in some
cases this cost is invoiced back to Romania
the tenant through a service
charge. Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 36

United Kingdom
 Austria

Belgium

Bulgaria

Estonia Cyprus

Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
Czech Republic
General Market Practices Holidays
Basis of Measurement: For office Peak holiday season is during the Denmark
premises, the normal summer months from mid-June to
measurement of area used to mid-August, when transaction Estonia

include: calculate rent is the Net Base times might be affected.

Agents Fees
• Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. Each party
typically pays the fee of their
contracted agent.
• Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
Finland
Area. This is the net leasable area
and does not include areas used Acknowledgement
France
for technical use such as vertical We would like to thank Helén
penetrations (elevator shafts, Silverstolpe and Max Barclay of
Germany
stairs) or structural walls. Newsec Advice AB for their
assistance in the preparation of Greece
Fit Out/Reinstatement/ this country review.
Dilapidations: Fit out is Hungary
completed to tenant specifications
and is typically financed by the Ireland

depending on the purchase landlord. This cost is then usually

price. Fees are usually
between 1–4% of the agreed
purchase price.
• Subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): There is no property
Italy
charged to the tenant as a rental
surcharge depending upon the
Latvia
transaction agreement.
Lithuania
Use of Space: Cellular offices
dominate the market, but open Luxembourg
plan offices are gaining popularity
in Baltic countries. Netherlands

transfer tax in Estonia.

Norway

Value Added Tax: The current VAT

Poland
rate in Estonia is 18% and most
tenants pay VAT on rent, service Portugal
charges and notary costs.
Romania

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 168 174 176 166
GDP Annual % 4.9 4.2 0.9 -5.7 Italy

Net direct foreign investment (US$ millions) 2,313 55 -3,442 -256

Labour Force (millions) 2.6 2.7 2.7 2.7 Latvia

Unemployment Rate % 7.7 6.9 6.4 9.0

Inflation Rate Annual % 1.6 2.5 4.0 0.3
Lithuania

Average Real Wages Annual % 1.4 1.3 0.6 2.8

Luxembourg
GDP per head ($ at PPP) 32,879 35,520 36,470 34,480
Lending Interest Rate 4.1 5.0 5.3 2.8
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

Hours of Business Lithuania

Hours of business vary between summer and winter.
Summer hours are 08:00am – 17:00pm and winter Luxembourg
hours are 08:00am to 16:00pm.
Netherlands

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

required if intending to stay for a period exceeding

Serbia
3 months. Citizens of other Nordic countries are
excluded from this requirement.
Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 39

United Kingdom
 Austria

Belgium

Bulgaria

finland Cyprus

Typical Lease Terms
Legislation: The Real Property
Code governs commercial lease
contracts in Finland. While this is
Rent Escalation/Rent Review:
Rent escalations apply to leases
longer than 3 years or for an
indefinite term, and are typically
Czech Republic
Tenant and Landlord Obligations:
Typically the landlord is Denmark
responsible for external building
maintenance and technical Estonia

primarily intended to govern
residential transactions, it does
include mandatory regulations for
commercial leases. The
association of property owners
have published standard
contracts for different types of
properties (hotels, shopping
centres, offices) that are
approximately 2-4 pages with
appendices covering indexation of
linked to the Consumer Prices
Index and are adjusted annually.
Upward adjustment only is most
common.
Guarantee and Security Deposit:
Rent deposits and/or bank
guarantees of 3 – 6 months rent
are usually required from
prospective tenants.
installations and the tenant is
Finland
responsible for internal
maintenance. The landlord is
France
responsible for insurance of the
building but in single tenant
Germany
properties, the tenant may
sometimes be required to insure Greece
the property.
Hungary
Subletting: The tenant is not
permitted to sublet the premises Ireland

rent and service charges and so
on. It is not compulsory to use the
standard contracts and any form
of contract is acceptable as long
as it conforms to the Real
Property Code. While most
companies utilise the standard
leases they tend to have their own
standard appendices. As most
Rights of Renewal: The tenant is without the prior written consent
Italy
afforded no security of tenure by of the landlord.
law but commonly may negotiate
Latvia
rights of renewal with the
landlord. Lithuania
Break Options and Terminations: Luxembourg
The tenant has no right by law to
prematurely terminate the lease. Netherlands

companies are familiar with the It is possible however for the

standard leases the negotiation
process tends to be shorter than
in many other countries in Europe.
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
Norway
landlord and tenant to agree to
an early termination depending
Poland
on the market conditions and the
specific nature of the lease. In Portugal
these instances, a termination
penalty is generally required. For Romania
unlimited term leases the tenant
may terminate the lease at any Russia

time with appropriate notice, but

Serbia
the landlord must provide a valid
reason to terminate the lease and
Slovakia
then he is liable to pay
compensation to the tenant. Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 40

United Kingdom
 Austria

Belgium

Bulgaria

Finland Cyprus

Legal Environment Concerning
Brokerage Law
An agency must have a person
possessing an authorization for
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
Czech Republic
General Market Practices
Basis of Measurement: For office Denmark
premises, the normal measurement
of area used to calculate rent is the Estonia

brokerage (LKV) who also acts as
the responsible person for
documenting all transactions.
Individual agents must possess a
brokerage licence provided by the
magistrate of local municipality
(Lääninhallitus/Länsstyrelsen).
Occupancy Costs
The following charges are payable
by the tenant:
include:
Agents Fees
• Leasing – Fees are typically
15-20% of the first year’s
gross annual rent. Each party
typically pays the fee of their
contracted agent.
• Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
Net Base Area. This is the net
Finland
leasable area and does not include
areas used for technical use such
France
as vertical penetrations (such as
elevator shafts and stairs) or
Germany
structural walls.
Greece
Fit Out/Reinstatement/
Dilapidations: Fit out is completed Hungary
to tenant specifications and is
financed by the landlord. The cost Ireland

depending on the purchase is then usually charged to the

Rents: Rents are quoted in Euros
on per square metre per month
basis and are paid in advance on a
quarterly basis.
Service Charge: Building service
charges are quoted in Euros on
per square metre per month basis
price. Fees are usually
between 1-4% of the agreed
purchase price.
• Subletting – Same as leasing
but in some instances
subletting fees may be higher
than leasing fees.
Italy
tenant as a rental surcharge
depending upon the transaction
Latvia
agreement.
Lithuania
Use of Space: While cellular
offices, open plan, and mixed plan Luxembourg
offices are all common in Finland,
the most popular form of Netherlands

and are paid in advance on a
quarterly basis with the rent.
These charges include heating,
water/sewage, and maintenance.
Tenants usually pay their own
electricity.
Local Property Tax: Local
property tax is paid by the
Property Transfer Tax: During
the purchase of a property the
purchaser will be responsible for
paying a transfer tax equal to 4%
of the purchase price.
Value Added Tax: The current VAT
rate in Finland is 22% and most
tenants pay VAT on rent. In some
premises today is open plan for
Norway
cost effective reasons.
Poland
Holidays
Peak holiday season is during the Portugal
summer months of June to August
(July is high season) but Romania
transaction times do not
necessarily become significantly Russia

landlord directly but ultimately
this cost is invoiced back to the
tenant through a service charge.
cases where the landlord is not effected.
Serbia
VAT registered, the VAT is not
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 1.914 1.957 1.964 1.896
GDP Annual % 2.4 2.3 0.3 -3.5 Italy

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

Unemployment Rate % 8.8 8.0 7.4 9.7

Inflation Rate Annual % 1.7 1.5 2.8 -0.1
Lithuania

Average Real Wages Annual % 1.1 1.3 0.3 2.6

Luxembourg
GDP per head ($ at PPP) 32,230 33,800 34,470 33,310
Lending Interest Rate 3.7 4.3 4.8 4.2
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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 bicameral parliament that is comprised of the
Senate and the National Assembly. The Senate’s
powers are limited compared to the National
Assembly that has primacy in legislative matters.
Legal Structure
The French legal structure is a civil law system that
includes concepts that developed out of the
Napoleonic period to form the basis of the highly
influential French Civil Code. The French judiciary
The other major airport in Paris is Paris Orly.
Finland
France’s other international airports are found in
Bordeaux, Lille, Lyon, Marseilles, Nice and Toulouse.
France
France has a very well developed public transport
Germany
network. As well as buses Paris is served by the
Regional Express Railway (RER) for suburban rail Greece
services and the efficient underground system, the
Metro. The Paris Transport Company provides Hungary
timetables for travel for both services (www.ratp.fr).
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

stay for a period exceeding 3 months.

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 43

United Kingdom
 Austria

Belgium

Bulgaria

France Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is based on the regulations
of article L.145.1 and subsequent
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
Czech Republic
Tenant and Landlord Obligations:
Tenant obligations are internal Denmark
repair while landlord obligations
are main structural repairs and to Estonia

articles of the new “Code de
Commerce” and the non-
abrogated parts of Decree N° 53–
360 of 30 September 1953 and
subsequent amendments.
Lease Length: A lease can be 3
years although 6 or 9 fixed year
leases are frequently used.
Rent Escalation/Rent Review:
access to company information. A
deposit of 3 months net rent must
be paid when the lease is signed.
The landlord may accept a bank
guarantee to replace the deposit.
Rights of Renewal: On lease
expiry the tenant has no security
of tenure. In the 9th year of the
lease, with 6 months notice, the
landlord may either renew the
keep the roof watertight.
Finland
Maintenance and insurance is
paid by the landlord and re-
France
invoiced to the tenant.
Germany
Subletting: The tenant is not
permitted to sublet the premises Greece
without written consent from
the landlord, or unless it has Hungary
otherwise been authorised in
the lease. Ireland

Rent is adjusted annually based lease at an adjusted rent or refuse

on the Construction Costs Index
(INSEE index) but the index used
should change in 2009 for new
leases. Should the automatic
indexation from the start exceed
25 % during the lease, the tenant
can demand a rent review.
Landlord and tenant can also
Italy
renewal. Should he refuse to
renew, he is obliged to pay
Latvia
compensation to the tenant.
Lithuania
Break Options and Terminations:
The tenant has the right to break Luxembourg
the lease at the end of the 3rd
and 6th year subject to 6 months Netherlands

agree to cap the escalation rate. written notice delivered by a

Norway
bailiff. The landlord does not have
the right to break the lease before
Poland
the end of the 9 year period. The
tenant does not have the right to Portugal
cancel the lease before the break
option dates unless prior Romania
agreement from the landlord has
been obtained. If granted, this will Russia

typically be subject to a penalty,

Serbia
the amount of which will depend
on market conditions.
Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 44

United Kingdom
 Austria

Belgium

Bulgaria

france Cyprus

Legal Environment Concerning
Brokerage Law
To be a property consultant, no
specific qualifications are required
Land Property Tax: Land Tax
(Impôt Foncier) is assessed on a
percentage of the notional value
of the building and is paid by the
Czech Republic
• Subletting – Fees are typically
based on the time that the Denmark
main tenant’s lease still had
to run (usually 10% of the Estonia

but each agent must be registered
to get a “transaction card” in
order to be paid. In a company
there is usually one “transaction
card” for the manager (it is a
nominal card). The manager then
delegates his card to the other
members of the company. To be
registered a warrant is needed.
In accordance with the law
landlord on an annual basis. This
cost is passed on to the tenant.
Other Taxes/Costs: Office Tax
(Taxe Bureaux) specific to the Ile-
de-France region is assessed on
the size of the premises based on
an annual fixed price per square
metre and paid by the landlord on
an annual basis. This cost is
passed on to the tenant.
year’s net rent for terms of
Finland
one year or less and 20% for
terms of two years or more),
France
or on a percentage (to be
negotiated) of the savings
Germany
made through the early
surrender. Greece
Property Transfer Tax: For the Hungary
purchase of a property, the
purchaser will be responsible for Ireland

“Hoguet” (n°70-09 of 2 January paying transfer tax, typically 4.8 –

1970) the service provider must
have a registered listing (mandate)
in order to be able to offer a
property to a client. By virtue of
this listing, the landlord/main
tenant authorises the service
provider (who becomes the
Authorised Service Provider) to sell
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are typically
Italy
5% of the purchase price.
Latvia
Value Added Tax: The current VAT
rate in France is 19.6% and Lithuania
payable on all forms of
transactions including rent, Luxembourg
service charges and agents fees
but is not paid on the property Netherlands

or let the property on their behalf.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per annum and
are paid quarterly in advance.
30% of the first year’s net
rent. The fees are usually split
50:50 between the tenant and
landlord. Sometimes a
different fee-split is agreed,
for example, 2/3 may be paid
by one party and 1/3 by the
other and occasionally one
party may pay all the fees.
transfer tax.
Norway
Other Taxes/Costs: Notary fee
Poland
(0.825% if it is over 16,770 Euros),
and other small expenses (stamps, Portugal
mortgage costs). The notary is
responsible for collecting all taxes Romania
and extra costs, which is
approximately 6.5% – 7% of the Russia

• Freehold – Fees are paid by purchase price (including the

Service Charge: Service charges
are quoted in Euros per square
metre per annum and are paid
quarterly in advance, based on a
provisional amount, which is then
adjusted once the actual cost is
known at the end of the year.
Serbia
the seller and negotiated on a property transfer tax).
case-by-case basis depending
Slovakia
on the purchase price. Fees
are usually between 3-5% of Spain
the agreed purchase price.
Sweden
Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 45

United Kingdom
 Austria

Belgium

Bulgaria

France Cyprus

General Market Practices
Basis of Measurement: In France,
the following terms are used to
define floor areas:
• SUB (Surface Utile Brute ou
Surface locative) – Gross
Usable or Lettable Areas. This
is the area normally used in
Czech Republic
All works, decorations,
installation, additions, and Denmark
furnishings which the tenant may
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 shell of the building. The
SHOB is equal to the sum of
the areas of each floor of a
building, taking into account
the bare exterior of the walls
and the finished floors. It
includes basements and attic
spaces, whether they are
The SUB is equal to the sum of
the office areas and common
areas, corridors (but not the
vertical circulations), toilets,
social areas and landings.
• SUN (Surface Utile Nette) –
Net Lettable Areas (used for
space planning) – The SUN is
equal to the SUB after having
belong to the landlord, unless the
France
latter should demand the return
of the premises to their original
Germany
state.
Greece
Use of Space: Companies occupy
office space usually as cellular Hungary
offices mixed with open spaces
(for projects team or commercial Ireland

fitted out or not, balconies, deducted corridors, toilets departments).

and accessible roof verandas
(excluding street-level
verandas).
• SHON (Surface Hors Oeuvre
Nette) – Net Areas excluding
the shell of the building. The
SHON takes into account the
bare exterior of the walls and
and landings. Common space
such as entrance halls or
cafeteria are added to the
lease as a proportion of the
tenant’s leased space of the
total building.
Fit Out/Reinstatement/
Italy
Holidays
Latvia
There are certain times of the year
in which the speed of transactions Lithuania
are reduced due to holidays. In
France, the period from mid-July Luxembourg
(after Bastille Day on 14 July)
through until the end of August is a Netherlands

is equal to the SHOB after
having deducted basements
and attic spaces not fitted out
for residential or professional
activities (the attic spaces to
be deducted are considered to
be areas of which the ceiling
height is less than 1.80 m),
roof verandas, balconies,
Dilapidations: Office buildings peak holiday period. Many of the
Norway
are usually delivered carpeted, smaller companies close down in
with suspended ceilings, lighting August whilst larger firms operate
Poland
and wiring (except data wiring), with only a skeleton staff.
and mechanical and electrical Portugal
servicing. Raised floors and air
conditioning are standard in new Romania
buildings. In a tenant’s market the
landlord may assume the cost of Russia

loggias, and open areas partitioning or a part of the cost.

Serbia
located on the ground floor In a landlord’s market, these
(eg parking areas). costs are borne by the tenant.
Slovakia

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 2,588 2,651 2,685 2,543
GDP Annual % 3.0 2.5 1.3 -5.3 Italy

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

Unemployment Rate % 10.8 9.0 7.8 10.1

Inflation Rate Annual % 1.6 2.3 2.7 0.0
Lithuania

Average Real Wages Annual % -0.4 -1.2 -0.5 0.6

Luxembourg
GDP per head ($ at PPP) 32,333 33,510 34,610 32,930
Lending Interest Rate 9.2 10.1 10.4 8.0
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

parliamentary in nature but the exercise of power (www.flughafen-duesseldorf.de), Cologne/Bonn

occurs in a federal structure. The federal republic
consists of 16 states (Länder). Each state has its own
mostly autonomous parliament so some regulations
may vary between states. The federal government is
headed by the chancellor who leads the executive in
the German government. The federal legislature is
bicameral and consists of a lower house, the
Bundestag and an upper house the Bundesrat.
Legal Structure
Finland
(www.airport-cgn.de), Hamburg (www.hamburg-
airport.de), Berlin (www.berlin-airport.de),
France
Hannover (www.hannover-airport.de), Bremen
(www.flughafen-bremen.de) and Stuttgart
Germany
(www.flughafen-stuttgart.de).
Greece
Germany has a well-developed public transport
infrastructure consisting of buses, regional and Hungary
intercity trains. The InterRegio-Express (IRE)
connects cities across Germany, the Regionalbahn Ireland

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

Hours of Business The country code is + 49

Norway
Works hours vary between states but the main office
hours are generally Monday to Friday 9:00am – Coordinated Universal Time (UTC) + 1 hour
Poland
18:00pm. Eastern Standard Time + 6 hours

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

passport do not require a visa. Nationals from EU-

Serbia
countries as well as Switzerland and Liechtenstein
may remain for an unlimited time. Citizens of the
Slovakia
United States of America do not require a visa for
entry. A residence permit is required if intending to Spain
stay for a period exceeding 3 months that should be
applied for at the local Aliens Office (Ausländeramt). Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 48

United Kingdom
 Austria

Belgium

Bulgaria

Germany Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is based on the German
Civil Code (BGB or Bürgerliches
Rights of Renewal: Options to
renew can be granted annually,
biannually, or for a further five
years. The length and terms of
Czech Republic
Tenant and Landlord Obligations:
Tenant obligations are internal Denmark
repair and building and liability
insurance, while landlord Estonia

Gesetzbuch), on statutory orders
(Rechtsverordnung) or case law.
Lease Length: 5 years with an
additional 5 years renewal or
10 year leases are typical in
Germany.
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the Consumer Price Index (VPI)
options are subject to negotiation.
Break Options and Terminations:
Options are negotiable but
tenants should be aware of notice
periods to terminate otherwise
leases can continue automatically.
In most cases, if notice is not
given either 6 or 12 months in
advance, the lease will
automatically continue for an
obligations are typically external
Finland
repairs, structural repairs,
maintenance and loss of rent
France
insurance.
Germany
Subletting: Generally subletting
is allowed with the written Greece
consent of the landlord. The
landlord must accept the Hungary
subtenant if they have an average
covenant, but is allowed to Ireland

or compounded annually. In either
case, the terms and type of
indexation are negotiable.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details
or access to company information.
additional year or in some cases 5
years. Some lease agreements
allow for the premature exit of a
lease with the condition of a
penalty. In some cases, the
penalty is set out in the lease
agreement. If a penalty clause is
not included in a lease agreement,
then the lease term is usually
prohibit subletting if the use of
Italy
the premises by a subtenant
substantially deviates from the
Latvia
original use by the main tenant. If
not explicitly mentioned in a lease Lithuania
agreement, tenants are able to
charge higher rents to subtenants Luxembourg
then what they pay to the
landlord. Netherlands

Either a deposit of 3 months considered as fixed with the

Norway
gross rent or a bank guarantee tenant obligated to pay rent for
is typical. the remaining term.
Poland

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

in Germany. German brokerage Rents: Rents are quoted in Euros include:

law is governed by the German
Civil Code. In general, if a property
is introduced to a prospective
tenant, and the tenant views the
property with the introducing
agent, then the tenant is legally
obligated to pay the agent a fee if
the tenant signs a lease
agreement on that property.
per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in Euros per
square metre per month and are
paid monthly in advance. Usually
they include costs of insurance,
caretakers, cleaning,
maintenance, public taxes and
Finland
Agents Fees
France
• Leasing – Fees are usually 3 to
4 months gross rent (including
Germany
parking) for a lease
agreement for 5 years with a Greece
5 year extension or 10 year
lease term. A fee of 2.5 to 3.5 Hungary
months gross rent will be
charged for a lease length Ireland

In many cases local management consumption costs. under 5 years. Traditionally,

may have already been active in
the market and have received
offers and viewed with other
agents before they were notified
of an existing instruction with
another sole agent. It can then be
a problem to identify which
brokerage firm has a legal right to
Local Property Tax
(Grundsteuer): These taxes are
assessed on a percentage of the
notional value of the building and
paid by the landlord on an annual
basis. These costs are passed on
to a tenant at generally 10-15% of
Italy
tenants pay fees although in
some cases, depending on the
Latvia
market, landlords are willing
to pay some of the fees. Lithuania
• Freehold – Market fees for the
sale of freeholds, usually paid Luxembourg
by the seller are 3-5% of the
purchase price. Netherlands

receive fees and to determine the
total brokerage fee of the
transaction.
This can be avoided if the real
estate department of the tenant is
aware of this environment and
notifies local management not to
go to market unless instructed at
the monthly building service
charges. The monthly service
charge includes the local property
tax.
• Subletting – In a landlord’s
Norway
market, a subtenant would
pay fees to the agent
Poland
instructed by the main tenant
equivalent to 2.5 to 4 months Portugal
gross monthly rent (including
parking) as set out above. Romania
However, in tenant friendly
markets, subtenants will use Russia

the appropriate time. If a tenant their leverage to ask for rent

Serbia
has received offers but have not free periods, costs for
viewed the property, they can improvements to be assumed
Slovakia
release their obligations to pay a by the main tenant and have
fee if they send back the offers to the main tenant assume Spain
the agent who made the offer by commission fees.
formally rejecting them in writing. Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 50

United Kingdom

germany
Property Transfer Tax
(Grunderwerbsteuer): For the
purchase of a property, the
purchaser will be responsible for
paying a property transfer tax of
3.5 – 4.5 % depending on German
federal states.
Value Added Tax: The current VAT
rate in Germany is 19% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs and property
transfer tax.
Other Taxes/Costs: To finalise the
purchase of a property, a
registered notary must be
instructed who will charge a fee
of 1% of the purchase price.
Generally, the purchaser assumes
the notary costs.
General Market Practices
Basis of Measurement: There are
three standard measuring
practises:
• Net base area or NGF (Netto
Grundfläche) – This includes
main usable space; ancillary
space such as toilets, kitchens
and parking spaces;
separating walls; circulation
space; and area used for
technical uses and elevators.
• Gross base area or BGF
(Brutto Grundfläche) – This
includes the net base area
calculation (NGF) including
the calculation of the area of
the shell and core of the
building.
• GIF (Gesellschaft für
Immobilienwirtschaftliche
Forschung, translate as
Society for Real Estate
Research) – This is the most
tenant friendly calculation
as it excludes the calculation
of areas used for technical
uses and elevators and the
calculation of the shell and
core of the building. The
difference in spatial
calculation between the
GIF and BGF methods is
between 20-30%. This is
the most commonly used
area calculation for rent
in Germany.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
In addition, a pro-rata share of
common areas may be added by Denmark
landlords to gain rent for
entrance halls, etc. Alternatively, Estonia
a higher unit rate may be quoted
on true useable areas to Finland
compensate.
France
Fit Out/Reinstatement/
Germany
Dilapidations: New office
developments generally include Greece
raised floors, carpeting and
partitioning as a standard and Hungary
such costs are borne by the
landlord. Usually a top cooling/ Ireland
fan pipe system is installed in
Italy
new office developments. Full air
conditioning is only installed in
Latvia
high class buildings sometimes.
When letting second generation Lithuania
space, the landlord will generally
assume the costs of installing Luxembourg
partitioning according to a space
plan provided by the tenant. Netherlands
When vacating premises, the
Norway
tenant is responsible for
reinstating the space in the
Poland
condition that they had first
occupied the space. Tenant Portugal
improvements that were
undertaken during occupancy can Romania
be sold to the landlord. Often,
leases will stipulate that the Russia
landlord has a right of first
Serbia
refusal to purchase the
improvements from the tenant.
Slovakia
Spain
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
space is subject to ceiling height.
The use and density of space must
be in accordance with the
Arbeitsstättenrichtlinienverordnung
or Federal Workspace Guidelines
that are administered by the Trade
Supervisory Office. These
guidelines govern the distance
from natural light, position of a
desk, position of a PC on the desk
reduced due to holidays. Different
Finland
federal states in Germany have
summer school holidays of six
France
weeks beginning as early as the
end of June and the latest from
Germany
the end of August. There are also
a number of public holidays Greece
during the middle of the week in
May and June, when many people Hungary
will take holidays for a number of
days. Easter school break is Ireland

and so on that must be taken into generally around mid of March

account when drafting a
workspaces plan.
Italy
and mid of April. Many people in
Germany begin their Christmas
Latvia
holidays one week before
Christmas and return on the Lithuania
second week of January.
Luxembourg

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 294 306 315 305
GDP Annual % 4.5 4.0 2.9 -3.1 Italy

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

Unemployment Rate % 8.9 8.3 7.6 8.9

Inflation Rate Annual % 3.2 2.9 4.1 0.4
Lithuania

Average Real Wages Annual % 1.3 1.2 4.6 6.3

Luxembourg
GDP per head ($ at PPP) 27,610 29,400 30,910 30,140
Lending Interest Rate 6.3 7.0 7.4 7.2
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

Hours of Business Coordinated Universal Time (UTC) + 2 hours

Italy
The main business hours are Monday to Friday Eastern Standard Time + 7 hours
09:00am – 17:00pm.
Latvia
Invest in Bureau
Visas Further country information can be obtained from Lithuania
Greece is a member of the Schengen area the Invest in Greece bureau:
agreement. Holders of an EEA (EU Member States, www.investingreece.gov.gr Luxembourg
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from EU- Netherlands

countries as well as Switzerland and Liechtenstein

Norway
may remain for an unlimited time. Citizens of the
United States of America do not require a visa for
Poland
entry. A residence permit is required if intending to
stay for a period exceeding 3 months that should be Portugal
applied for at the Consulate General of Greece.
Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 54

United Kingdom
 Austria

Belgium

Bulgaria

Greece Cyprus

Typical Lease Terms
Legislation: Commercial leases
are governed by the Greek Civil
Code and Presidential Decree
Rights of Renewal: Options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may
Czech Republic
Tenant and Landlord Obligations:
Tenant obligations are internal Denmark
repair, maintenance and content
insurance whilst landlord Estonia

34/1995. automatically renew for an obligations are external repairs,

Lease Length: The minimum
initial lease length is legally
prescribed at 12 years. It is
generally advisable that the lease
contract bears what is legally
known as a “certified date” (the
date of registering the lease
contract with the relevant tax
authority or notary public).
indefinite period if the tenant
continues to use the property
after the end of the original lease
if there is no objection by the
landlord.
Break Options and Terminations:
The tenant has the right to
terminate the lease 2 years after
its commencement. Prior written
Finland
structural repairs, maintenance
and building insurance.
France
Subletting: Subletting is allowed
Germany
with the written consent of
the landlord as long as the Greece
subtenant agrees to accept all
responsibilities initially accepted Hungary
by the main tenant.
Ireland

Special lease contracts may also
be agreed on the basis of
alternative legal arrangements.
Rent Escalation/Rent Review:
Rent is adjusted annually based on
the Cost of Living Index. The basis
of rent escalation is freely
negotiable and in the past,
notice must be served to the
landlord 6 months after the end
of the 2 year period and a
compensation of 4 months rent
must be paid to the landlord.
Upon expiry of a 12-year lease the
landlord may terminate the lease
provided that 9 months prior
written notice is served and that
Legal Environment Concerning
Italy
Brokerage Law
Agents need to be registered to
Latvia
practice in Greece if they are to
enjoy the privileges provided to Lithuania
them by Greek law, but private
contracts to pay an agency fee to Luxembourg
a non-registered agent are still
enforceable. Netherlands

escalation clauses of inflation plus the landlord pays the tenant

5% were not uncommon. Over the
last few years the accepted norm
for escalation clauses is inflation
or inflation plus 1% or 2%.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
compensation equal to 24 months
rent. If such notice is not served,
then the lease is automatically
renewed for another 4 years.
Upon completion of 16 years from
the commencement of the initial
lease the landlord may terminate
the lease without paying
Norway
If a property is introduced to a
prospective tenant and is viewed
Poland
with the introducing agent, then
the tenant is obligated to pay the Portugal
agent a fee if the tenant signs a
lease agreement on that property. Romania
Russia

tenants such as banking details or compensation at all. If the lease is

access to company information.
Generally a deposit of 2 or 3
months gross rent is payable
upon the signing of the lease
contract.
Serbia
not renewed for another definite
duration after the completion of
Slovakia
16 years, then it is considered to
be of indefinite period and may Spain
therefore be terminated by either
party with appropriate notice Sweden
(generally one month).
Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 55

United Kingdom
 Austria

Belgium

Bulgaria

Greece Cyprus

Occupancy Costs Acquisition Costs
The following charges are payable Typical acquisition costs that
by the tenant: a company will have to pay
when buying or leasing new
Czech Republic
Property Transfer Tax: Two
systems exist. For land and Denmark
properties with permits prior to
Jan 2006 has the purchaser Estonia

Rents: Rents are quoted in Euros
per square metre per month and
are paid monthly in advance.
Service Charge (Koinohrista):
Building service charges are
quoted in Euros per square metre
per month and are paid monthly
in advance with the rent.
Local Property Taxes: These
premises include:
Agents Fees
• Leasing – Fees are usually
1 month’s net rent plus VAT or
10% to 12% per annual rent
plus VAT.
• Freehold – Fees are
negotiable and depend on the
size of the property involved
and the particular market
responsible for paying a property
Finland
transfer tax of 9-11% on the
value of the property exchanged
France
(as quoted on the relevant SPA).
For properties with permits post
Germany
Jan 2006, transactions are subject
to VAT. Greece
VAT: VAT in Greece is currently Hungary
19%. Professional fees are subject
to VAT. Ireland

consist of municipal taxes and characteristics at the time.

municipal duties and are
generally levied through payment
of electricity bills. They may vary
significantly per geographic
region. The maximum charges are
publicised by the mayor’s office,
but informal negotiations with
local authorities to obtain lower
The standard fee is 2%. It is
uncommon to find fees below
1% of the transaction value for
a reasonably large deal (over
€ 5 million). Fees can also be
up to 3% of purchase price.
• Sublease – Same as leasing
fees.
Italy
Other Taxes/Costs: To finalise the
purchase of a property, a
Latvia
registered notary must be
instructed who will charge a fee Lithuania
of approximately 1.2 % of the
purchase price. Generally, the Luxembourg
purchaser covers for notary costs.
There are also obligatory Netherlands

rates do exist (particularly for minimum legal fees that typically

sizeable or important buildings).
It is common in Greece for agents
to get paid by both parties in a
transaction. In these cases
separate instructions from both
parties are required to be signed.
Norway
equate to 1.2 – 1.5% of the
purchase price. A number of other
Poland
supplementary taxes are
applicable depending on the Portugal
transaction and a local tax
consultant should be utilised. Romania

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

premises are typically measured affected by holidays. Peak holiday

based upon the Gross Area
(including external walls but not
common space unless solely
utilized by tenant) stated on
architectural plans for planning
approval.
Fit Out/Reinstatement/
Dilapidations: The tenant is
typically responsible for all costs
Finland
periods tend to be during
midsummer (mid-August) and
France
between Christmas and New Year.
Germany
Acknowledgement
We would like to thank Greece
Konstantinos Markogiannakis
and Anna Nazou of Danos & Hungary
Associates for their assistance in
the preparation of this country Ireland

associated with fit out. While the review.

Italy
tenant has a legal responsibility
to remove improvements from the
Latvia
premises at the expiry of the
lease, in practice this is rarely Lithuania
required as the majority of
landlords prefer the Luxembourg
improvements to remain.
Netherlands

Use of Space: Traditionally older

Norway
offices in Greece have tended to
be constructed as cellular offices.
Poland
Recently in newer buildings,
offices are designed to be Portugal
predominantly open plan.
Romania

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 179 181 182 171
GDP Annual % 4.0 1.2 0.4 -6.0 Italy

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

Unemployment Rate % 7.5 7.3 7.8 10.5

Inflation Rate Annual % 3.9 8.0 6.1 3.3
Lithuania

Average Real Wages Annual % 4.1 -0.1 1.2 -2.8

Luxembourg
GDP per head ($ at PPP) 18,460 19,240 19,800 18,750
Lending Interest Rate 8.1 9.1 10.2 11.0
Netherlands
Exchange Rate to US$ 210.3900 183.6258 172.1133 218.4557

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

Assembly (Orszaggyules) is unicameral and consists

Finland
of 386 members are elected who serve four Budapest’s public transportation system consists of
year terms. buses, trams and suburban railways. It is connected
France
to other cities in Hungary by a national railway
Legal Structure system. Information can be obtained from BKV
Germany
The Hungarian judiciary is based on the German- (www.bkv.hu)
Austrian legal system and is comprised of a tiered Greece
structure of local municipal district courts, country International Dialling Code
courts, the Court of the Capital City and the Supreme The country code is + 36 Hungary
Court.
Coordinated Universal Time (UTC) + 1 hour Ireland

Hours of Business Eastern Standard Time + 6 hours

Italy
The main business hours are Monday to Friday
08:00am – 16:30pm. Invest in Bureau
Latvia
Further country information can be obtained from
Visas the Hungarian government investment bureau: Lithuania
Hungary is a member of the Schengen area www.itd.hu
agreement. Holders of an EEA (EU Member States, Luxembourg
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from EU- Netherlands

countries as well as Switzerland and Liechtenstein

Norway
may remain for an unlimited time. Citizens of the
United States of America do not require a visa for
Poland
entry. A residence permit is required if intending to
stay for a period exceeding 3 months applied for at Portugal
the local regional agency of the Hungarian
Immigration and Nationality Office. Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 59

United Kingdom
 Austria

Belgium

Bulgaria

Hungary Cyprus

Typical Lease Terms
Legislation: The Hungarian Civil
Code and specifically, the Leases
Act 1993, governs commercial
Czech Republic
Rights of Renewal: The tenant Legal Environment Concerning
has no security of tenure by law. Brokerage Law Denmark
Leases will terminate at the date There is no legal requirement to
of expiry, and must be have a license in order to trade as Estonia

leases in Hungary. renegotiated. If an option to an agent in Hungary. Generally,

Lease Length: There are no set
limits for lease terms so they can
be indefinite although in practice
3 and 5 year leases are typical. 5
years tends to be more typical of
class A buildings whereas class B
have leases between 1 to 3 years.
Hungarian law makes a
distinction between commercial
extend was previously agreed,
then the current lease terms and
rent will continue for the new
lease, as detailed in the lease.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
Either a deposit of 3-4 months net
Finland
each party is responsible to pay
their respective agents. On
France
occasions however the landlord’s
agent may sometimes be
Germany
permitted to earn a fee of 0.5
months rent from the tenant. The Greece
tenant agent will only earn fees
from the tenant directly. Hungary
Occupancy Costs Ireland

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:

Break Options and Terminations:
Options are negotiable, however,
tenants should be aware of notice
periods as options will expire and
become null and void if notice is
not delivered on time. In most
Latvia
Tenant and Landlord Obligations: Rents: Rents are quoted in Euros
Normally the landlord is or US Dollars per square metre Lithuania
responsible for building per month (also Forints) and are
maintenance, insurance, and paid monthly or quarterly in Luxembourg
technical installations and tenant advance.
are responsible for small Netherlands

cases, the penalty for early lease
termination is subject to
negotiations and depends on
current market conditions.
Termination notice periods for
landlords are one year and 15
days for tenants.
Rent Escalation/Rent Reviews:
maintenance and insurance
within the premises. Maintenance
obligations should be clearly spelt
out in the lease agreement.
Subletting: Generally subletting
is allowed, but only with the prior
written consent of the landlord.
The landlord is not obliged to
Service Charge: Building service
Norway
charges are quoted in Euros or US
Dollars per month or quarter and
Poland
are paid monthly or quarterly in
advance. Service charges are Portugal
sometimes charged in the local
currency. Romania
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

Hungary
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Leasing – Fees are
usually equal to 2 months net
rent for a lease agreement.
• Freehold – Fees are
negotiable but are typically
1.5–2.5% of the purchase
price, and are paid by the
seller.
• Subletting – Same as leasing.
Property Transfer Tax: For the
purchase of a property, a property
transfer tax of 10% will be levied,
based on the purchase price of
the property plus VAT. The VAT
will be normally refunded after
approximately 3 months. The
responsibilities of the costs are
usually negotiated and very often
the costs are split 50:50 between
vendor and purchaser.
Value Added Tax: The VAT (ÁFA)
rate in Hungary is 20% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs, finance tax and
property transfer tax.
Other Taxes/Costs: For the
purchase of a property legal and
notary costs of approximately 0.5-
1% in total, based on the purchase
price of the property plus VAT are
payable. The responsibilities of
these costs are usually negotiated
and very often the costs are split
50:50 between vendor and
purchaser.
General Market Practices
Basis of Measurement: There are
two standard measuring
practises:
• Net Lettable Area or Building
Owner’s and Manager’s
Association Standard (BOMA)
– This is the most commonly
used area calculation and is
used for calculating the rent.
BOMA includes main usable
space, ancillary space such as
toilets, kitchens, separating
walls, and circulation space.
Areas used for technical use,
structural walls and elevators
are excluded. A “gross-up”
factor of 5 – 12 % may be
applied to the Net Lettable
Area, particularly if the
building is new.
• Gross Base Area or BGF
(Brutto Geschossfläche) – This
area is measured from
internal wall to internal wall
and includes all the gross
area within.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Fit Out/Reinstatement/
Dilapidations: New office Denmark
developments generally include
raised floors, carpeting and Estonia
partitioning as a standard and
Finland
such costs are borne by the
landlord. Upgrading space to full
France
air conditioning is generally the
responsibility of the tenant as
Germany
only a top cooling/fan pipe system
is normally installed in new Greece
buildings. When letting second
generation space, the landlord Hungary
will generally assume the costs of
installing partitioning according Ireland
to a space plan provided by the
Italy
tenant. When vacating premises,
the tenant is responsible for
Latvia
reinstating the space to the
condition that they had first Lithuania
occupied the space. Tenant
improvements that were Luxembourg
undertaken during occupancy
cannot be sold to the landlord, Netherlands
unless otherwise stipulated in the
Norway
lease. If the landlord wishes, they
may ask for the premises to
Poland
remain in their existing condition.
Portugal
Use of Space: Both open plan and
cellular offices are predominantly Romania
used in Hungary.
Russia
Holidays
Serbia
August and January tend to
generally be the main holiday
Slovakia
periods when the speed of
transactions may be affected. Spain
Sweden
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 168 178 174 161
GDP Annual % 5.7 6.0 -2.3 -7.5 Italy

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

Unemployment Rate % 4.5 4.6 6.1 13.0

Inflation Rate Annual % 3.9 4.9 4.1 -3.5
Lithuania

Average Real Wages Annual % -0.7 -0.0 0.3 -2.0

Luxembourg
GDP per head ($ at PPP) 41,315 44,259 43,891 40,620
Lending Interest Rate 5.3 6.4 7.0 3.9
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

tiered court system consists of district courts at the

Italy
local level, circuit courts, high courts, the court of Invest in Bureau
criminal appeal and the highest court, the Supreme Further country information can be obtained from
Latvia
Court. the Invest in Ireland bureau:
www.idaireland.com Lithuania
Hours of Business
The main business hours are Monday to Friday Luxembourg
09:00am – 17:00pm.
Netherlands

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

period exceeding 3 months.

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 63

United Kingdom
 Austria

Belgium

Bulgaria

Ireland Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is the Landlord and Tenant
Act 1980 together with various
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as accounting/
Czech Republic
Tenant and Landlord Obligations:
When the building is entirely Denmark
occupied by one tenant, the
tenant will normally take on full Estonia

ancillary legislation.
Lease Length: 20-25 year leases
incorporating break options
(depending on the covenant on
offer) are typical in Ireland. Break
options are more likely to be
granted in a depressed market.
Lease lengths have shortened in
recent years and break options
are commonplace (particularly
banking details and access to
company information. Either a
deposit of 3 months rent or a bank
guarantee are necessary to
complete the lease depending on
strength of covenant.
Right of Renewal: On the basis
that tenants occupy premises for
a period in excess of 5 years, they
have an automatic right of
repairing and insuring obligations
Finland
(FRI) for the interior and exterior
of the space. In buildings that are
France
in multiple occupational, the
tenant obligations are generally
Germany
internal repair, maintenance and
insurance (IRI) while landlord Greece
obligations are external repairs,
maintenance and insurance. Hungary
The landlord will charge these
costs to the tenant through the Ireland

for office & industrial/logistic
lettings) in the current market.
Rent Escalation/Rent Review:
Rent will be subject to an upward
only review. This clause is usually
every 5 years but in rare
instances can be other periods
such as every 7 years, although
renewal by law on expiry of the
lease and can apply for a new
lease on similar terms as the
original one. Under new
legislation, both parties can now
agree to contract out of this
protection by signing a Deed of
Renunciation.
service charge.
Italy
Subletting: Generally subletting
Latvia
is allowed with the written
consent of the landlord, such Lithuania
consent not to be unreasonably
withheld or delayed. The Luxembourg
subtenant is normally required to
sublet at a rent not less than the Netherlands

this tends to be a historic feature
of the market. The new rent will
be agreed between the parties
and is based primarily on open
market lettings and secondly, on
rent review evidence. If
agreement cannot be reached, an
arbitrator or independent expert
will be appointed to set the new
Break Options and Terminations: passing rent, however can sublet
Norway
Options are negotiable depending at a rent higher than the passing
on market circumstances and the rent.
Poland
quality of the tenant’s covenant.
In other instances breaks at Portugal
intervals of 5 years can be
negotiated, these are subject to Romania
written notice and may be subject
to payment of monetary penalties. Russia

rent. There is usually a provision

Serbia
for referral to third party
contained within the lease.
Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 64

United Kingdom
 Austria

Belgium

Bulgaria

Ireland Cyprus

Legal Environment Concerning
Brokerage Law
Commercial agents need to be
registered to practice in Ireland
Service Charge: Building service
charges are quoted in Euros per
square metre per annum and are
paid quarterly in advance along
Czech Republic
• Freehold – Fees for the sale or
purchase of freeholds are Denmark
based on 1.5% of the purchase
price. This percentage may be Estonia

and must hold an auctioneers
licence. The Auctioneers and
House Agents Acts 1947-1973
govern brokerage in Ireland.
Agents are normally appointed by
both sides (landlord and tenant)
in a transaction and each side will
pay their own agents fees. Agents
will generally act in an advisory
capacity initially and then
with the rent.
Local Property Tax (Commercial
Business Rates): These municipal
taxes are assessed on a
percentage of the notional rental
value of the space and paid
directly to the local council by the
tenant, normally on a semi-
annual basis.
increased for small properties
Finland
or reduced for larger
instructions. Fees will also
France
depend on the location of the
property, with regional
Germany
properties sometimes
commanding higher fees. Greece
• Subletting – Same as leasing.
Hungary
Property Transfer Tax (Stamp
Duty): For the purchase of a Ireland

negotiate on behalf of the client,
on the client’s instructions. It is
considered to be a conflict of
interest if the same broker
represents both the landlord and
the tenant. The Royal Institution
of Chartered Surveyors (RICS)
regulations require that both
parties must be notified if a
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually 10%
– 15% of the first year’s rent.
property, the buyer will be
Italy
responsible for paying a property
transfer tax of 6%, which is based
Latvia
on the purchase price of the
property. Lithuania
Value Added Tax: The current Luxembourg
VAT rate in the Ireland is 21.5%
and is payable on rent, building Netherlands

conflict exists.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per annum and
are paid quarterly in advance.
For larger or higher value service charge, agents fees and
Norway
instructions this percentage legal costs.
can be negotiated as
Poland
appropriate and are subject to
written agreement. Fees will Portugal
also depend on the location of
the property, with regional Romania
properties sometimes
commanding higher fees. Russia

Ireland generally uses calendar

Serbia
quarter (gale) days, which are;
1 January, 1 April, 1 July and
Slovakia
1 October.

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 65

United Kingdom
 Austria

Belgium

Bulgaria

Ireland Cyprus

General Market Practices
Basis of Measurement: The
measurement of buildings in
Ireland is governed by the SCS
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: New office August and December are the only Denmark
developments are provided by the periods in the year when holidays
landlord with raised floors, floor will affect the speed of projects. Estonia

Code of Measuring practice
(currently under review). This
document defines what should
and should not be included.
• Office Accommodation – City
centre properties are
measured on a net internal
basis (NIA). This is the “carpet
area” and excludes ancillary
space such as toilets,
boxes to a ratio of 1:10 square
metre, suspended ceilings,
recessed light fittings and air
conditioning. The tenant will
typically be responsible for
providing internal partitioning,
cabling, carpeting, security and
facilities such as reception areas,
post rooms and kitchens. When
vacating premises, the tenant is
responsible for reinstating the
There are also a number of Bank
Finland
holidays. These fall on Mondays,
and are in May, June, August,
France
October and the Friday and
Monday at Easter. Some
Germany
professionals also take holidays
around the Easter weekend as Greece
most schools are on holidays (Mid
Term break). Hungary
Ireland

staircases, elevators, plant space to the condition it was at

areas and parking spaces.
• Suburban office properties
are measured on a gross
internal (GIA) basis and not
on a NIA basis.
• Industrial Accommodation –
Measured on a gross external
basis (GEA). This includes
Italy
the start of the lease.
Latvia
The tenant will have to remove all
improvements made to the Lithuania
property and reinstate the
premises to the original condition Luxembourg
on handover from the landlord. If
the tenant chooses not to do this Netherlands

everything within the external work themselves, a dilapidations

walls of the building.
• Retail Accommodation –
Measured on a NIA basis.
Norway
estimate will be agreed between
building surveyors acting for both
Poland
sides. This will be the amount to
be paid by the tenant in lieu of the Portugal
reinstatement works.
Romania
Use of Space: Companies typically
occupy office space as open plan Russia

space with a small number of

Serbia
executive offices and meeting
rooms. Retail premises are
Slovakia
generally let on a shell and core
basis with services brought to a Spain
point within the unit, for
connection by the tenant. Sweden

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 1,668 1,693 1,675 1,597
GDP Annual % 2.1 1.5 -1.0 -4.6 Italy

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

Unemployment Rate % 6.8 6.1 6.8 8.2

Inflation Rate Annual % 2.1 1.8 3.4 0.5
Lithuania

Average Real Wages Annual % 1.4 0.8 0.4 0.5

Luxembourg
GDP per head ($ at PPP) 29,620 30,590 30,930 29,670
Lending Interest Rate 5.6 6.3 6.8 4.9
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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
Sardinia, Sicily, Trentino-Alto Adige, Valle d’Aosta,
and Friuli-Venezia Giulia have some degree of
autonomy. In practice the Italian state remains
highly centralised with legislative power remaining
with parliament. The parliament is bicameral and
consists of the Chamber of Deputies (Camera dei
Deputati) and the Senate (Senato della Repubblica).
Legislation can be issued by either house but to gain
assent must pass in both houses.
26 kilometres south west of the city centre. There is
Finland
an express rail service direct to Termini central
station that takes 15 minutes to reach the city
France
centre. Details can be obtained at www.
ferroviedellostato.it
Germany
Milan has two airports. Milan Linate International Greece
Airport (www.sea-aeroportimilano.it) that is located
7 kilometres east of Milan. The airport is connected Hungary
to the city via bus and taxi services. Milan Malpensa
International Airport (www.sea-aeroportimilano.it) is Ireland

Legal Structure located 45 kilometres north west from central

Italy
The Italian legal system is a civil law system based Milan. Malpensa is connected by express train that
on Roman law and modified with the Napoleonic run every half-hour to Milan’s Stazione Nord,
Latvia
code. The judiciary consists of the courts who deal Cadorna.
with ordinary civil and criminal cases, administrative Lithuania
issues, accounting, military, and taxation. Jurisdiction Italian State Railways (Ferrovie dello Stato)
over civil and criminal matters is by the Judicial (www.ferroviedellostato.it) provide an effective Luxembourg
Order. The order is divided into judges and means of transport through a high-speed inter City
magistrates of the public prosecutor’s office who and European train network that is undergoing Netherlands

perform the function of investigators and judge. expansion in Italy.

Norway

Hours of Business International Dialling Code

Poland
The main business hours are Monday to Friday The country code is + 39
08:00/09.00am – 12.00/13.00pm and 14.00/15.00 – Portugal
18.00/19.00pm Coordinated Universal Time (UTC) + 1 hour
Eastern Standard Time + 6 hours Romania
Visas
Italy is a member of the Schengen area agreement. Invest in Bureau Russia

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

Typical Lease Terms
Legislation: The statue law that
governs leases is based on Italian
Law ex lege 392/78 and
Czech Republic
Rights of Renewal: According to Legal Environment Concerning
Italian law leases are Brokerage Law Denmark
automatically renewable for In Italy the agents of real estate
additional 6 year terms at the consultants must be registered by Estonia

subsequent amendments.
Lease Length: Leases must legally
be at least 6 years in length.
Leases are therefore generally for
6 year terms with an automatic
renewal period for the tenant of
an additional 6 years.
Lease contract: There is no
standard form of lease contract in
same rent (plus ISTAT increases).
Longer renewal periods can be
negotiated.
Break Options and Terminations:
This does not legally have to be
provided but it can be agreed
upon between the landlord and
tenant. In this case, the tenant
can have the right to terminate
the lease with 12 months prior
the local trade chamber after
Finland
passing its examination. After
registration the agent obtains the
France
official licence to operate that is
essential in order to be paid. In a
Germany
real estate company the licence
belongs to the manager who then Greece
delegates the other members of
the company to operate. Hungary
Agents work in several different Ireland

Italy. The form of lease is typically
dictated by the landlord and will
often be specific to each
individual landlord (with some
general articles required by laws).
Rent Escalation/Rent Review:
Rents are linked to the ISTAT Cost
of Living Index and will be
written notice as long as it is
specified in advance in the lease
contract.
Tenant and Landlord Obligations:
Tenant obligations are usually the
ordinary maintenance and annual
services charges. The landlord
provides the extraordinary
ways with clients:
Italy
a) having an “exclusive
instruction” (incarico in esclusiva)
Latvia
from the landlord who authorises
the service provider to sell or let Lithuania
a property. In this case the agent/
company is paid by the landlord. Luxembourg
Every other agent who wants to
fill the building with a client Netherlands

increased annually based upon maintenance. cannot contact the landlord

75% of the index, although in
some cases it is 100%.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating. A
deposit of 3 months or more
Subletting: The subletting of
property is allowed but only if it is
stated in the lease contract and
with the prior written consent of
the landlord.
Norway
directly but must go through the
company who has the “incarico”.
Poland
b) having an instruction for a new Portugal
space search. In this case the
company has to be paid by the Romania
client who is looking for space and
act as a “filter” for those agents Russia

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

Italy
c) without instruction. In this case
agents have to ask the “official”
agent in charge of the building or
the client for the right to co-
operate. This leaves the possibility
that the building will be offered
directly to any clients of the
asking agent.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per annum and
paid quarterly in advance. Value
Added Tax and services charges
are never included in the rate
price. In the contract areas are
specified as rooms rather than
square metres.
Service Charge: Building service
charges are quoted in Euros per
annum and paid quarterly in
advance. They are based on an
estimated budget that will be
adjusted with the effective costs
at the end of the year.
Local Property Tax: Paid by the
landlord (Imposta Comunale sugli
Immobili). Some other local taxes
have to be paid directly by the
tenant (ex. “tassa rifiuti”).
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents’ fees
• Leasing – Fees are 10% up to
12% of the net annual rent
(“canone a regime”) to be paid
by the two parties (Tenant
and Landlord), except where
the agent receives an
exclusive instruction from the
client the fee from the other
party is not given.In this case,
the agents’ fees come only
from the client.
• Freehold – usually for a
property acquisition the fees
are paid by both parties
(vendor and purchaser) with a
percentage from 1% to 2% of
the sale price from each party.
In case of a larger purchase
the percentage can decrease
below 1%. In case of “co-
operation” with another
agency each will be paid by
their client.
• Subletting – subject to
agreement with the first
tenant (10–12% of annual year
rent or a percentage of the
savings obtained).
• Renewals – usually renewed
lease contracts are signed
directly by the landlord with
the tenant without agency
involvement.
• Lease Renegotiation – 5% of
the net annual rent (“canone a
regime”) plus an incentive fee
connected to results agreed
with the client.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Property Transfer Tax (Stamp
Duty): Asset deal: Sales of Denmark
commercial real estate carried
out by VAT-taxable persons are Estonia
exempt from VAT unless: (a) the
Finland
seller is a construction company
that built or renovated the
France
relevant property not more than
four years prior to the sale; (b) the
Germany
buyer is a VAT-taxable person
with a limited right to reclaim VAT Greece
(e.g. banks or insurance
companies with a VAT Hungary
deductibility percentage equal to
or below 25%); (c) the buyer is a Ireland
consumer; (d) the seller expressly
Italy
elected to subject the transaction
to VAT in the sale and purchase
Latvia
agreement. VAT can be reclaimed.
Lithuania
Value Added Tax: The VAT rate in
Italy is 20% and is due on all Luxembourg
forms of transactions including
rent, building service charge, Netherlands
agents fees. It is never included in
Norway
the price.
Poland
Other Taxes/Costs: Transactions
subject to VAT are also liable for Portugal
the following additional transfer
taxes: (a) registration tax at a Romania
fixed amount of EUR 168; (b) 1%
cadastral tax; and (c) 3% Russia
mortgage tax. Taxes are reduced
Serbia
to 2% (one-half) for transactions
involving real estate funds, or for
Slovakia
those transactions which involve
leasing companies, banks and Spain
financial intermediaries.
Registration, mortgage and Sweden
cadastre taxes are not
recoverable. The cost for the Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 70
United Kingdom

Italy
notary deed is the responsibility
of the purchaser. The fee of the
Notary has to be agreed with the
purchaser with regard to the
transaction. To finalise a
transaction both parties will
generally appoint a registered
solicitor to agree the final
contract. Often tenants will utilise
the services of a financial/fiscal
consultant and/or a lawyer who
specialises in real estate. The fee
for these services will be based
on a pre-agreed charge.
General Market Practices
Basis of Measurement: Office
premises are usually measured on
a “carpetable” basis. Basically
this measurement will exclude
ancillary space such as
staircases, elevators, plant areas,
and parking spaces. In most
buildings the core of the building
does not contain lavatories so
they are included in the
measurement of the premises.
Outdoor terraces are not included
in the measurement of the
premises for the calculation of
rent for offices. Often office
buildings in the center of cities
have limited parking places, but
they (and their cost) are not
included in the building area.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Fit Out/Reinstatement/
Dilapidations: New office Denmark
developments include suspended
ceilings, fluorescent lighting, Estonia
carpeting, central heating, air
Finland
conditioning and raised floors as
standard with the costs borne by
France
the landlord. Landlords do not
provide for fit out or moving costs
Germany
but they will sometimes offer a
free rent period if these costs are Greece
extensive. Upgrading space is a
responsibility of the incoming Hungary
tenant. All works, additions and
furnishings made by the tenant Ireland
will belong to the landlord who
Italy
may decide at the end of the
contract to keep them. If not when
Latvia
vacating premises the tenant is
responsible for reinstating the Lithuania
space to the condition it was in at
initial occupation. Tenant Luxembourg
improvements that were
undertaken during occupancy may Netherlands
be required to be removed if
Norway
requested by the landlord, unless
otherwise stipulated in the lease.
Poland
Use of Space: Companies occupy Portugal
office space usually as cellular
offices mixed with open space (for Romania
projects team or commercial
departments) and meeting rooms. Russia
Serbia
Holidays
In Italy there are limited holidays
Slovakia
during the year. They are mostly
concentrated in summertime Spain
(especially in August) and at
Christmas. Sweden
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 34 38 36 30
GDP Annual % 12.2 10.0 -4.6 -17.0 Italy

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

Unemployment Rate % 7.0 5.7 5.3 13.0

Inflation Rate Annual % 6.5 10.1 15.4 2.5
Lithuania

Average Real Wages Annual % 15.4 19.6 4.3 -8.0

Luxembourg
GDP per head ($ at PPP) 15,348 17,435 17,076 14,680
Lending Interest Rate 7.3 10.9 11.9 11.0
Netherlands
Exchange Rate to US$ 0.5597 0.5135 0.4781 0.5294

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

Supreme Court. Coordinated Universal Time (UTC) + 2 hours

Italy
Eastern Standard Time + 7 hours
Hours of Business
Latvia
The main business hours are Monday to Friday Invest in Bureau
08.30am – 17:30pm. Further country information can be obtained from Lithuania
the Investment and Development Agency of Latvia:
Visas www.liaa.gov.lv Luxembourg
Latvia is a member of the Schengen area agreement.
Holders of an EEA (EU Member States, Iceland, Netherlands

Liechtenstein and Norway) or Swiss passport do not

Norway
require a visa. Nationals from EU-countries as well
as Switzerland and Liechtenstein may also enter
Poland
without a visa. Citizens of the United States of
America do not require a visa for entry. A residence Portugal
permit is required if intending to stay for a period
exceeding 3 months obtained the Office of Romania
Citizenship and Migration Affairs.
Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 73

United Kingdom
 Austria

Belgium

Bulgaria

latvia Cyprus

Typical Lease Terms
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
Czech Republic
Break Options and Terminations: Legal Environment Concerning
The tenant has no right by law to Brokerage Law Denmark
prematurely terminate the lease. There are no certain laws on
Break options can be agreed in brokerage. There are brokers Estonia

Older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
Rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer Prices
Index (or a percentage of CPI) and
are adjusted annually. Rent
rental agreements. A typical associations that grant
Finland
break option is the termination of certificates based on exams.
the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
landlord and tenant to agree to The following charges are payable
Germany
an early termination depending by the tenant:
on the market conditions and the Greece
specific nature of the lease. Rents: Rents are quoted in local
currency on a square metre per Hungary
Tenant and Landlord Obligations: month basis and are paid on a
The landlord is usually monthly basis. Typically Ireland

reviews are upward adjustment
only.
Guarantee and Security Deposit:
Rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. The landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
agreements contain exchange
Italy
rate protection clauses against
currency devaluation risks.
Latvia
Service Charge: Building service Lithuania
charges are quoted in local
currency, on square metre per Luxembourg
month basis and are paid monthly
with the rent. These charges Netherlands

Rights of Renewal: The tenant is the property. include heating, water/sewage,

afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Norway
electricity and maintenance.
Subletting: The tenant is not
Poland
permitted to sublet the premises Local Property Tax: Local
without the prior written consent property tax is paid by the Portugal
of the landlord. landlord directly but in some
cases this cost is invoiced back to Romania
the tenant through a service
charge. Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 74

United Kingdom
 Austria

Belgium

Bulgaria

latvia Cyprus

Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
Czech Republic
General Market Practices Holidays
Basis of Measurement: For office Peak holiday season is during the Denmark
premises, the normal summer months from mid-June to
measurement of area used to mid-August, when transaction Estonia

include: calculate rent is the Net Base times might be affected.

Agents Fees
• Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. Each party
typically pays the fee of their
contracted agent.
• Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
Finland
Area. This is the net leasable area
and does not include areas used Acknowledgement
France
for technical use such as vertical We would like to thank Helén
penetrations (elevator shafts, Silverstolpe and Max Barclay of
Germany
stairs) or structural walls. Newsec Advice AB for their
assistance in the preparation of Greece
Fit Out/Reinstatement/ this country review.
Dilapidations: Fit out is Hungary
completed to tenant specifications
and is typically financed by the Ireland

depending on the purchase landlord. This cost is then usually

price. Fees are usually
between 1–4% of the agreed
purchase price.
• Subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): There is property transfer
Italy
charged to the tenant as a rental
surcharge depending upon the
Latvia
transaction agreement.
Lithuania
Use of Space: Cellular offices
dominate the market, but open Luxembourg
plan offices are gaining popularity
in Baltic countries. Netherlands

tax in Latvia of roughly 2% of

Norway
market value of the property to a
set maximum of 30,000 LVL.
Poland

Value Added Tax: The current VAT Portugal

rate in Latvia is 18% and most
tenants pay VAT on rent, service Romania
charges and notary costs.
Russia

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 52 57 58 51
GDP Annual % 7.8 8.9 3.0 -13.0 Italy

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

Unemployment Rate % 5.6 4.3 5.8 13.0

Inflation Rate Annual % 3.7 5.7 10.9 5.0
Lithuania

Average Real Wages Annual % 14.9 17.7 9.8 -20.0

Luxembourg
GDP per head ($ at PPP) 15,734 17,694 18,730 16,490
Lending Interest Rate 5.1 6.9 7.5 6.0
Netherlands
Exchange Rate to US$ 2.7520 2.5240 2.3570 2.6010

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

The main business hours are Monday to Friday

Italy
08:00am – 17:00pm. Invest in Bureau
Further country information can be obtained from
Latvia
Visas the Investment in Lithuania bureau:
Lithuania is a member of the Schengen area www.lda.lt Lithuania
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss Luxembourg
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein Netherlands

may also enter without a visa. Citizens of the United

Norway
States of America do not require a visa for entry. A
residence permit is required if intending to stay for a
Poland
period exceeding 3 months.

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

Typical Lease Terms
Lease Length: Leases between 3
and 5 years are typical, but an
unlimited lease may be agreed.
Czech Republic
Break Options and Terminations: Legal Environment Concerning
The tenant has no right by law to Brokerage Law Denmark
prematurely terminate the lease. There are no certain laws on
Break options can be agreed in brokerage. There are brokers Estonia

Older agreements contain early
termination clauses with a typical
6 month announcement time.
Rent Escalation/Rent Review:
Rent escalations apply to leases
longer than 2 years, or for an
indefinite term, and are typically
linked to the Consumer Prices
Index (or a percentage of CPI) and
are adjusted annually. Rent
rental agreements. A typical associations that grant
Finland
break option is the termination of certificates based on exams.
the agreement in 6 months prior
France
notice. It is possible for the Occupancy Costs
landlord and tenant to agree to The following charges are payable
Germany
an early termination depending by the tenant:
on the market conditions and the Greece
specific nature of the lease. Rents: Rents are quoted in local
currency on a square metre per Hungary
Tenant and Landlord Obligations: month basis and are paid on a
The landlord is usually monthly basis. Typically Ireland

reviews are upward adjustment
only.
Guarantee and Security Deposit:
Rent deposits and/or bank
guarantees of 3–6 months rent
are usually required from
prospective tenants.
responsible for external building
maintenance and technical
installations and the tenant is
responsible for internal
maintenance. The landlord is also
responsible for insurance of the
building and land tax but in single
tenant properties the tenant may
sometimes be required to insure
agreements contain exchange
Italy
rate protection clauses against
currency devaluation risks.
Latvia
Service Charge: Building service Lithuania
charges are quoted in local
currency, on square metre per Luxembourg
month basis and are paid monthly
with the rent. These charges Netherlands

Rights of Renewal: The tenant is the property. include heating, water/sewage,

afforded no security of tenure by
law, but commonly rights of
renewal are agreed in contracts.
Norway
electricity and maintenance.
Subletting: The tenant is not
Poland
permitted to sublet the premises Local Property Tax: Local
without the prior written consent property tax is paid by the Portugal
of the landlord. landlord directly but in some
cases this cost is invoiced back to Romania
the tenant through a service
charge. Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 78

United Kingdom
 Austria

Belgium

Bulgaria

Lithuania Cyprus

Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
Czech Republic
General Market Practices Holidays
Basis of Measurement: For office Peak holiday season is during the Denmark
premises, the normal summer months from mid-June to
measurement of area used to mid-August, when transaction Estonia

include: calculate rent is the Net Base times might be affected.

Agents Fees
• Leasing – Fees are typically
10–15% of the first year’s
gross annual rent. Each party
typically pays the fee of their
contracted agent.
• Freehold – Fees are paid by
the seller and are negotiated
on a case-by-case basis
Finland
Area. This is the net leasable area
and does not include areas used Acknowledgement
France
for technical use such as vertical We would like to thank Helén
penetrations (elevator shafts, Silverstolpe and Max Barclay of
Germany
stairs) or structural walls. Newsec Advice AB for their
assistance in the preparation of Greece
Fit Out/Reinstatement/ this country review.
Dilapidations: Fit out is Hungary
completed to tenant specifications
and is typically financed by the Ireland

depending on the purchase landlord. This cost is then usually

price. Fees are usually
between 1–4% of the agreed
purchase price.
• Subletting – similar to leasing
fees.
Property Transfer Tax (Stamp
Duty): There is no property
Italy
charged to the tenant as a rental
surcharge depending upon the
Latvia
transaction agreement.
Lithuania
Use of Space: Cellular offices
dominate the market, but open Luxembourg
plan offices are gaining popularity
in Baltic countries. Netherlands

transfer tax in Lithuania.

Norway

Value Added Tax: The current VAT

Poland
rate in Lithuania is 18% and most
tenants pay VAT on rent, service Portugal
charges and notary costs.
Romania

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

Country Statistics Luxembourg

France
Population (thousands) 469
Surface area (km²) 3,000
Germany
Density (per km²) 180
Local currency Euro Greece

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 35 37 36 35
GDP Annual % 6.4 5.2 -0.9 -5.0 Italy

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

Unemployment Rate % 4.4 4.4 4.5 6.8

Inflation Rate Annual % 2.7 2.3 3.4 0.5
Lithuania

Average Real Wages Annual % 1.2 1.4 0.4 0.7

Luxembourg
GDP per head ($ at PPP) 76,870 84,770 85,360 81,080
Lending Interest Rate 4.0 4.8 4.9 1.6
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

Norway

Major Cities
Poland
City Core Population
Luxembourg City 77,400 Portugal

Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division Romania

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

Iceland, Liechtenstein and Norway) or Swiss

Norway
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein
Poland
may also enter without a visa. Citizens of the United
States of America do not require a visa for entry. A Portugal
residence permit is required if intending to stay for a
period exceeding 3 months. Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 81

United Kingdom
 Austria

Belgium

Bulgaria

LUXEMBOURG Cyprus

Typical Lease Terms
Legislation: The law that governs
leases in Luxembourg is the Act of
14 February 1955 and subsequent
Czech Republic
Break Options and Terminations: Occupancy Costs
Many leases contain break The following charges are payable Denmark
options, usually after 3 or 6 years by the tenant:
on longer leases, although this is Estonia

amendments from 1987 and
1992.
Lease Length: The standard term
for regular occupation of leased
premises is 3, 6 or 9 years.
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the Cost of Living Index
published by the local statistic
only market convention. These
options may be for either or both
parties and should generally be
exercised by registered mail at
least between six to twelve
months prior to the lease expiry
date.
Tenant and Landlord Obligations:
The landlord is responsible for
major repairs, the details of which
Rents: Rents are quoted in Euros
Finland
per square metre per month plus
VAT when applicable (15%) and
France
are paid quarterly or monthly in
advance.
Germany
Service Charges: Building service Greece
charges are quoted in Euros per
square metre per month and are Hungary
paid monthly or quarterly in
advance, based on a provisional Ireland

governmental body “STATEC” at
the anniversary date of the lease
contract. The indexation of rents
is never negative so the rental
price will not decrease even if
there is a deflation.
Guarantee and Security Deposit:
Landlords usually require
are foreseen by the legislation.
Building maintenance and
insurance is paid by the landlord
and re-invoiced to the tenant.
Tenants are responsible for
contents insurance and
maintenance of their premises.
(Almost triple net contract.)
amount, which is adjusted once
Italy
the actual cost is known at the
end of the year.
Latvia
Local Property Tax: This tax is Lithuania
assessed on a percentage of the
notional value of the building and Luxembourg
paid by the landlord on an annual
basis. This cost is often passed on Netherlands

information from prospective
clients such as company statutes
and latest balance sheet.
Landlords usually accept a bank
guarantee instead of a deposit
equivalent to either 3 or 6 months
of rent, depending on the quality
of the tenant.
Subletting: The tenant is not to the tenant via the service
Norway
permitted to sublet the premises charges or via separate invoice.
without written consent from the
Poland
landlord unless sublet to a parent
company of the tenant. Consent Portugal
should not to be unreasonably
withheld unless it has been Romania
otherwise specified in the lease.
Russia

Rights of Renewal: On lease

Serbia
expiry the tenant has no security
of tenure. The lease either
Slovakia
automatically expires and
renewals must be arranged Spain
between the parties, or the lease
stipulates that, in absence of Sweden
reaction by the parties, the lease
is automatically renewed for Switzerland

successive periods of one or three

Turkey
years at the same conditions.

Ukraine
BNP par i b as rea l estate 82

United Kingdom

LUXEMBOURG
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are negotiable
with the typical rate being
between 1 month rent to 15%
of the first year’s net rent.
Fees are paid by the landlord
or by the tenant depending on
whom the agent represents.
• Freehold – Fees are usually
paid by the seller and
negotiated on a case-by-case
basis but is typically between
1–3% depending on the sale
price.
• Subletting – Fees are to be
negotiated but are usually the
same as the leasing fees
above or based on a
percentage of the savings
made through the early
surrender of the lease.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property, the purchaser will be
responsible for paying a transfer
tax of 7.5–10.5% depending on the
city the object is located. This
may be recovered if the property
is sold again within 6 months.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Value Added Tax: VAT in Holidays
Luxembourg is currently at 15% There are no times of the year in Denmark
and is payable on all rent which the speed of transactions
payments (when applicable) as are reduced due to holidays. In Estonia
well as professional fees and the period between Christmas
Finland
letting fees. and New Year some offices may
be closed but generally firms will
France
General Market Practices remain open all year round.
Basis of Measurement: Gross
Germany
External Area (GEA) is the area of Letting activity is usually dormant
a building measured externally at during the month of August Greece
each floor level. (official construction work
holiday). Hungary
Gross Area (GA) is the area of a
building measured from the axis Ireland
of the opposite wall (if no windows
Italy
in wall) for each floor level.
Latvia
Fit Out/Reinstatement/
Dilapidations: Office buildings Lithuania
are usually offered with carpet,
suspended ceilings, lighting, and Luxembourg
air conditioning. Partitioning and
upgrading of the office space is at Netherlands
the cost of the tenant. All works,
Norway
installations and additions, which
the tenant may undertake on the
Poland
premises during the lease, shall,
at the end of the lease or at the Portugal
end of renewal, belong to the
landlord, unless the latter should Romania
demand the return of the
premises to their original state, at Russia
the tenant’s cost.
Serbia
Use of Space: Space in
Slovakia
Luxembourg is most commonly
occupied as cellular offices or as a Spain
mixed plan of offices and open
space for team areas. Sweden
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 591 611 624 596
GDP Annual % 3.4 3.5 2.1 -4.5 Italy

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

Unemployment Rate % 5.5 4.5 4.0 5.0

Inflation Rate Annual % 1.2 1.6 2.5 0.9
Lithuania

Average Real Wages Annual % 0.9 0.4 0.9 0.4

Luxembourg
GDP per head ($ at PPP) 37,240 39,220 40,800 39,030
Lending Interest Rate 3.5 4.6 4.6 2.4
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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)
function is to review legislation enacted by the more
powerful Second Chamber (Tweede Kamer).
Legal Structure
Dutch legal structure is based on civil law system
with strong influences from French civil code. Civil
and criminal justice is organised around 61 sub-
district courts, 19 district courts, five Courts of
Appeal, and the Supreme Court of the Netherlands
as ultimate arbiter.
other airports at Rotterdam and Eindhoven.
Finland
The Netherlands has extensive network of buses,
France
trams and underground trains in the main cities plus
a railway system that connects the whole country.
Germany
Amsterdam itself is served by eight stations of the
Nederlandse Spoorwegen (Dutch Railways) and Greece
serves as an international train station for journeys
to Belgium, France, Germany and Switzerland. Hungary
Travel details for rail journeys can be obtained from
Dutch Railways (www.ns.nl). Amsterdam’s internal Ireland

Metro System is run by Gemeentelijk Vervoerbedrijf

Italy
Hours of Business (GVB), a municipal transport company owned by the
The main business hours are Monday to Friday city authorities (www.gvb.nl/english).
Latvia
08.30am – 17:00pm.
International Dialling Code Lithuania
Visas The country code is + 31
The Netherlands is a member of the Schengen area Luxembourg
agreement. Holders of an EEA (EU Member States, Coordinated Universal Time (UTC) + 1 hour
Iceland, Liechtenstein and Norway) or Swiss Eastern Standard Time + 6 hour Netherlands

passport do not require a visa. Nationals from EU-

Norway
countries as well as Switzerland and Liechtenstein Invest in Bureau
may also enter without a visa. Citizens of the United Further country information can be obtained from
Poland
States of America do not require a visa for entry. A the Netherlands Foreign Investment Agency:
residence permit is required if intending to stay for a www.nfia.com Portugal
period exceeding 3 months.
Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 85

United Kingdom
 Austria

Belgium

Bulgaria

Netherlands Cyprus

Typical Lease Terms
Legislation: The legislation
applicable to commercial lease
contracts is Book 7 of the Dutch
The Dutch Council for Real Estate
(ROZ) has issued standard lease
contracts for retail and office
leases which are commonly used
Czech Republic
Guarantee and Security Deposit:
Landlords usually require Denmark
information from prospective
tenants such as banking details Estonia

Civil Code. The law broadly
distinguishes the following three
categories:
• Residential (not being
discussed further)
• Business premises – retail
(shops, canteens, showrooms,
restaurants)
• Business premises – other
(offices, other less-location
by all brokers. These standard
contracts can be extended with
additional articles and clauses
that are either tenant-friendly or
landlord-friendly. Professional
advice on this matter could save
future costs, mainly on
termination of a contract, but also
when the landlord plans
redevelopment activities.
and access to company
Finland
information. A bank guarantee of
(at least) 3 months gross rent
France
plus service charges are usually
required to complete the
Germany
transaction.
Greece
Rights of Renewal: The ROZ
standard contracts are based Hungary
upon a first lease period, which is
to be specified. After expiration of Ireland

bound activities)
Dutch law provides for better
protection mechanisms for retail
tenants compared to offices.
Rationale is that retail activities
are heavily dependent upon their
location. As the law is not 100%
precise on all matters, it is
Lease Length: The usual term for
regular occupation of leased
premises is 5 years. In practice
every duration is possible varying
from an infinite lease that is
cancellable at short notice to a
20-year plus lease.
Rent Escalation/Rent Review:
this lease period, the contract is
Italy
renewed automatically for the
same (or different) period, unless
Latvia
the lease is terminated by the
tenant within a predefined term Lithuania
before the first expiration date.
This termination period is usually Luxembourg
12 months, but could be different.
After the second renewal period, Netherlands

strongly recommended to seek
professional advice in case of
potential disputes on cancellations
or extensions of contracts.
Usually the rent level is adjusted
annually, based on the Consumer
Price Index (CPI), published by
the Dutch Centre for Statistics
(CBS). In practice, deviations
can be agreed upon, such as
fixed rents, capped indexation,
fixed indexation and variable
turnover rent.
the lease can be automatically
Norway
renewed or will have to be
renewed through negotiations.
Poland
Dutch law is very flexible, and the
renewal right can also be Portugal
formulated as an option
exclusively for the tenant. Older Romania
contracts (before the ROZ
standards became widespread) Russia

can have different terms, rights

Serbia
and obligations.

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
it is an exclusive right for the
tenant, or for both parties. This is
especially important if the rent
level is significantly above or
below market level, or if the
property can be redeveloped.
Because of this importance of
formulation, it is advisable to
have the Dutch language contract
prevail in the case of any disputes
Rents: Rents are usually quoted in
Euros per square metre per
annum and are paid in advance on
a monthly, quarterly, or
(bi)annually basis.
Service charges: Building service
charges are quoted in Euros per
square metre per annum and are
prepaid together with the rent in
advance, based on a provisional
include:
Finland
Agents Fees
France
• Leasing – Fees are negotiable
and subject to the length of
Germany
the first lease period and the
height of the annual rent. The Greece
typical rate being between 12
-20% of the first year’s net Hungary
rent for contracts between 5
and 10 years. Fees are paid by Ireland

but this is not mandatory.
Tenant and Landlord Obligations:
The landlord usually is
responsible for external repairs
and the replacement of major
installations such as boilers,
HVAC and elevators. Building
maintenance (not replacements)
amount. Settlement occurs on an
annual basis.
Local property tax (“Onroerende
zaak belasting”): This tax is
assessed on a percentage of the
legal market value (“WOZ-value”)
of the property and paid by the
landlord on an annual basis.
the landlord or by the tenant
Italy
depending on whom the agent
represents.
Latvia
• Transactions – Freehold fees
are usually paid by the seller Lithuania
and negotiated on a case-by-
case basis but is typically Luxembourg
between 1.5 – 2% depending
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
are responsible for insurance and
maintenance of their assets. In
practice, deviations from the
above are possible, from a single-
net to a triple-net contract.
differ per region or municipality.
negotiated but are usually the
Poland
same as the leasing fees
above or based on a Portugal
percentage of the savings
made through the early Romania
surrender of the lease.
Russia

Subletting: Usually the tenant is

Serbia
not permitted to sublet the
premises without written consent
Slovakia
from the landlord. Consent should
not be unreasonably withheld or Spain
unless it has been authorised in
the lease. Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 87

United Kingdom
 Austria

Belgium

Bulgaria

Netherlands Cyprus

Real Estate Transfer Tax
(“Overdrachtsbelasting”): For
the purchase of a property, the
purchaser will be responsible for
Newly constructed properties
need to be leased subject to VAT
for a consecutive period of 10
years in order for the construction
Czech Republic
• VVO (“Verhuurbaar Vloer
Oppervlak”)- This is the most Denmark
commonly used area for
calculating rent. It measures Estonia

paying a transfer tax of 6%. This
may be recovered if the property
is sold again within 6 months.
Constructions to avoid transfer
tax are rare but not impossible,
though usually require a syndicate
of non-related investors.
Value Added Tax (“BTW”): VAT in
the Netherlands amounts to 19%.
Leases are exempt from VAT, but
VAT to be refundable. The tax will
be refunded upfront, but could be
repaid by the landlord if the
property is leased to non-VAT
tenants. This so called revision
period of 10 years revives fully
(for another 10 years) if the
property is sold before the end of
that period. Tax consequences of
this revival can be immense, and
need to be checked for any
to the inside finished surface
Finland
of the outer walls but does
not include core areas (lifts,
France
vertical penetrations, common
landings), atria, or areas with
Germany
less than 1.5 m headroom.
Greece
Fit Out/Reinstatement/
Dilapidations: Office buildings Hungary
are usually offered with carpet,
suspended ceilings, lighting, Ireland

can be voluntarily subject to VAT if
the tenant is a VAT-paying
business. Usually it is in the
interest of both the tenant and
landlord to apply for VAT-subject
lease, as the VAT on all property
related expenses and investments
is tax deductible for the landlord.
Banks and government
potential transaction where this
issue could be apparent.
Provisions can be in place to
prevent revival from occurring.
General Market Practices
Basis of Measurement: In the
Netherlands standard (“NEN
2580”) is applicable to define the
heating and mechanical and
Italy
electrical installations.
Partitioning and upgrading of the
Latvia
office space usually is at the cost
of the tenant, but this can be Lithuania
negotiated.
Luxembourg
Retail properties usually
are leased bare, without any Netherlands

institutions are non-VAT floor area of a property. interior provisions.

organisations and as such cannot
apply for VAT-lease. In those
cases, the lease generally is
increased with a certain
percentage for “VAT-damage”,
relating to historic investments,
maintenance expenses or both.
Norway
• BVO (“Bruto Vloer Oppervlak”)
Poland
– Measures to the outside of
the finished surface of the Portugal
outer walls and includes
everything within the walls. Romania
• NVO (“Netto Vloer Oppervlak”)
– Measures to the inside Russia

finished surface of the outer

Serbia
walls core areas.

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 225 232 237 232
GDP Annual % 2.3 3.1 2.1 -2.0 Italy

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

Unemployment Rate % 3.5 2.5 2.6 4.0

Inflation Rate Annual % 2.3 0.8 3.8 2.0
Lithuania

Average Real Wages Annual % 5.3 4.9 2.3 2.0

Luxembourg
GDP per head ($ at PPP) 50,105 54,614 56,255 54,940
Lending Interest Rate 4.2 6.1 7.4 4.6
Netherlands
Exchange Rate to US$ 6.4133 5.8617 5.6400 6.5085

Norway

Major Cities
Poland
City Core Population
Oslo 505,167 Portugal
Bergen 228,386
Trondheim 148,023 Romania
Stavanger 108,418
Russia

Sources: Economist Intelligence Unit, OECD, Eurostat, UN Statistics Division

Serbia

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
is divided into two chambers, the Odelsting and the
Lagting. The Lagting’s acts as an upper chamber to
the Odelsting lower chamber, where legislation
originates, but in practice the passage of legislation
is a combined act.
Legal Structure
Norway’s legal structure is a mixture of civil law
system and common law traditions. The hierocracy
of Norway’s regular courts starts with the district
public owned by the state operator Avinor. The main
Finland
international airport is Oslo Airport Gardermoen
(www.osl.no/en/osl) that is located around 50
France
kilometres northeast of the city centre. Access to
the airport is by taxi, bus or by express train
Germany
(www.flytoget.no/eng).
Greece
The Norwegian National Rail Administration
(www.jernbaneverket.no) operates the network of Hungary
trains that connect the principle cities of Norway.
Timetables for passenger travel can be obtained Ireland

courts at the bottom, city and county courts, the
appellate courts, labour courts (for industrial
disputes) and the conciliation councils (for mainly
civil disputes). The highest court is the Supreme
Court.
from state owned passenger company Norges
Italy
Statsbaner (NSB) (www.nsb.no/home). Oslo itself
operates a network of tramways (www1.trafikanten.
Latvia
no/) and a rapid transit system called the Oslo
T-bane (www.tbane.no). Lithuania

Hours of Business International Dialling Code Luxembourg

The main business hours are Monday to Friday The country code is + 47
08:00am – 16:00pm. Netherlands

Coordinated Universal Time (UTC) + 1 hour

Norway
Visas Eastern Standard Time + 6 hour
Norway is not a member of the EU but is a member
Poland
of the Schengen area agreement and the European Invest in Bureau
Economic Area. Holders of an EEA (EU Member Further country information can be obtained from Portugal
States, Iceland, Liechtenstein and Norway) or Swiss the Norwegian Trade Portal and Innovation Norway:
passport do not require a visa. Nationals from EU- www.nortrade.com Romania
countries as well as Switzerland and Liechtenstein www.innovasjonnorge.no
may also enter without a visa. Citizens of the United Russia

States of America do not require a visa for entry. A

Serbia
residence permit is required if intending to stay for a
period exceeding 3 months that is applied for the
Slovakia
local police station in Norway.

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 90

United Kingdom
 Austria

Belgium

Bulgaria

Norway Cyprus

Typical Lease Terms
Legislation: Commercial
contracts are governed by the
Real Property Code, which mainly
Czech Republic
Break Options and Terminations: Legal Environment Concerning
In leases where the term is Brokerage Law Denmark
specified, the lease automatically There is no requirement in
expires and requires Norway for agents to be licensed Estonia

aims to protect the rights of
residential tenants but it also
stipulates regulations for
commercial properties.
Lease Length: Typically the term
of a lease is not specified and is
expected to be ongoing. Generally
the tenant and the landlord will
agree to an interminable period
whereby the lease will be
renegotiation. In situations where
the lease term is not specified,
the lease term is considered to be
ongoing until either the tenant or
landlord gives notice of
termination as set out in the lease
terms. The landlord is not
allowed to terminate an ongoing
lease unless the tenant does not
meet its covenants. If the
landlord terminates the lease
or authorized in order to negotiate
Finland
real estate transactions.
Historically agents have
France
represented landlords only, but
recently corporate occupiers have
Germany
begun to utilize consultants to
protect their interests in Greece
negotiations. It is always
advisable when dealing with Hungary
agents in Norway to enter into a
written contract defining the Ireland

guaranteed. However, specified
terms of 5 and 10 years are
increasingly common.
Rent Escalation/Rent Review:
Rents are indexed annually to the
Consumer Price Index.
Guarantee and Security Deposit:
prematurely he is liable for
compensation to the tenant.
Tenant and Landlord Obligations:
Landlords are responsible for
external repairs and building
maintenance including technical
installations, surface of floors,
walls, and ceilings. The tenant is
duties to be carried out by the
Italy
agent, including fees, deadlines
and scope of work.
Latvia
“Open bidding” sales are common Lithuania
when a property is being sold. As
the name implies, all offers are Luxembourg
openly known by all interested
parties. This process is very Netherlands

Landlords usually require
information from prospective
tenants such as banking details
or access to company information.
A deposit of 3 – 6 months gross
rent is typically necessary to
complete the lease.
Rights of Renewal: The tenant
responsible for maintenance and similar to an open auction. Other
Norway
insurance of the internal less common methods used to
premises. sell property is a “closed bidding”
Poland
process and options for select
Subletting: Generally, subletting buyers to place offers. Portugal
is allowed with the written
consent of the landlord and it Occupancy Costs Romania
should not be unreasonably The following charges are payable
withheld or delayed. by the tenant: Russia

has no right by law to renew the

Serbia
lease but it is common to Rents: Rents are quoted in NOK
negotiate an option to renew in Norwegian Kroner on per square
Slovakia
the lease. metre per month basis and are
paid in advance on a quarterly Spain
basis.
Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 91

United Kingdom
 Austria

Belgium

Bulgaria

Norway Cyprus

Service Charge: Sometimes this is
quoted within the rental figure.
This includes heating, water,
electricity, cleaning of common
Property Transfer Tax (Stamp
Duty): During the purchase of a
property the purchaser will be
responsible for paying a Stamp
Czech Republic
Use of Space: In buildings
refurbished or constructed in the Denmark
‘70’s – ‘80’s premises utilize
cellular offices. Recent demand Estonia

areas and snow removal based
upon a provisional amount, which
is adjusted once the actual cost is
known at the end of the year.
Local Property Tax: The local
property tax depends on the
geographical location of the
building. It is normally paid by the
landlord, but in some cases the
tenant covers this cost.
Duty equal to 2.5% of the purchase
price.
Value Added Tax: The VAT in
Norway is 25 percent. Most
industries have a VAT duty; the
exceptions are the bank/finance
and the public sector. Landlords
should make sure that they are
registered for leasing and that the
tenants are VAT registered.
however has been for open
Finland
concept office premises or
premises containing demountable
France
partitioning systems.
Germany
Holidays
Summer holidays, which are taken Greece
from July to the second week of
August, create a period of slowed Hungary
activity and few transactions are
completed in this time. Other Ireland

significant holiday periods where

Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually
Other Taxes/Costs: A fixed price
of NK 1,850 is required to be paid
on all mortgages regardless of
the size of the mortgage.
General Market Practices
Basis of Measurement: In Norway
office premises are measured
Italy
transactions may become slowed
are over Christmas (2 weeks) and
Latvia
during Easter (8 days).
Lithuania
Acknowledgement
We would like to thank Helén Luxembourg
Silverstolpe and Max Barclay of
Newsec Advice AB for their Netherlands

equal to 15% of the first year’s
net annual rent. Typically
each party pays their
respective contracted agent.
• Freehold – Fees are usually
paid by the seller and are
negotiated depending on the
size of the property. Typically
fees will be between 0.5% –
from the exterior of the building assistance in the preparation of
Norway
to the midpoint of subdividing this country review.
walls. The area used to calculate
Poland
rent will also typically include a
share of common areas such as Portugal
entrances, staircases, elevators,
and corridors. Romania
Fit Out/Reinstatement/ Russia

2.5%. Dilapidations: Unless otherwise

• Sublease – Same as leasing agreed, when a tenant moves
Serbia

fees above, however, in some from premises at the expiry of a

Slovakia
cases sublease fees may be lease they are obligated to return
increased. the premises to their original Spain
condition.
Sweden

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 550 587 615 624
GDP Annual % 6.2 6.7 5.0 -0.8 Italy

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

Unemployment Rate % 16.9 12.7 9.8 12.3

Inflation Rate Annual % 1.0 2.5 4.2 2.5
Lithuania

Average Real Wages Annual % 3.8 6.0 5.1 0.9

Luxembourg
GDP per head ($ at PPP) 14,879 16,312 17,500 17,460
Lending Interest Rate 7.3 8.1 9.1 9.8
Netherlands
Exchange Rate to US$ 3.1032 2.7680 2.4092 3.3500

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
higher chamber called the Senate and the lower
chamber called the Sejm where legislation
originates. Poland also has influential regional
governments (Sejmik) that administer the country’s
16 regions (Voivodships).
Legal Structure
Poland’s legal structure is based on a mixture of civil
law (influenced by French Civil Law) and some
legacy Communist legal theory that is being altered.
Connections to the city are via bus service and taxi.
Finland
Warsaw has an extensive bus and tram service that
France
is run by the Warsaw Transport Authority (www.ztm.
waw.pl). There are some suburban lines and rail
Germany
lines that connect Warsaw to other Polish cities such
as Krakow and Gdansk. Warsaw’s rail strength is as Greece
international rail terminus that connect routes
between western and eastern Europe. Many rail Hungary
services European destinations to Poland via the
railways run by the Polish State Railway (PKP) Ireland

The Polish court system is a four tiered structure (http://rozklad-pkp.pl).

Italy
that are based on regional (lowest level of the
judiciary), provincial and appellate divisions plus a International Dialling Code
Latvia
Supreme Court The country code is + 48
Lithuania
Hours of Business Coordinated Universal Time (UTC) + 1 hour
The main business hours are Monday to Friday Eastern Standard Time + 6 hours Luxembourg
08:00am – 16:00pm.
Invest in Bureau Netherlands

Visas Further country information can be obtained from

Norway
Poland is a member of the Schengen area the Invest in Poland bureau:
agreement. Holders of an EEA (EU Member States, www.paiz.gov.pl/index
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

period exceeding 3 months.

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 94

United Kingdom
 Austria

Belgium

Bulgaria

Poland Cyprus

Typical Lease Terms
Legislation: The Civil Code
governs leases in Poland.
Rights of Renewal: Leases will
terminate at the date of expiry
and usually must be renegotiated.
If the option to extend was
Czech Republic
Subletting: It is stated in the Civil
Code that the tenant may sublet Denmark
part or the whole premise to a
third party if the lease agreement Estonia

Lease Length: Typical leases used
in Poland are 3 years (20% of all
contracts), 5 years (70% of all
contracts) and 10 years (5% of all
contracts)
Rent Escalation/Rent Review:
Rents are usually indexed
annually based on the European
Union Consumer Price Index (CPI)
if the rent is stated in Euros or the
previously agreed, then the
existing lease terms and rent will
continue for the new lease.
Break Options and Terminations:
Options are negotiable but a
period of at least 3 years length is
generally asked for. Tenants
should be aware of notice periods
as options will expire and become
null and void if notice is not
allows and the landlord agrees in
Finland
writing. If the subletting is agreed,
the tenant and the third party are
France
both responsible to the landlord
for using the premises as detailed
Germany
in the lease agreement. The
sublet will terminate at the date Greece
of expiry of the lease agreement
between the tenant and the Hungary
landlord.
Ireland

inflation index published by delivered on time. In most cases

Central Statistical Office of
Poland if the rent is in Polish
Zloty. Sometimes the rent is
quoted in US Dollars and is
indexed by US CPI but rents in this
currency are not common
anymore.
Italy
the penalty for early lease
termination is subject to
Latvia
negotiations and depends on
current market conditions. Lithuania
Tenant and Landlord Obligations: Luxembourg
Usually the landlord is responsible
for building maintenance, Netherlands

Guarantee and Security Deposit: insurance and technical

Norway
Cash deposit or a bank guarantee installations. The tenant is
of 2 to 3 months (sometimes 6 responsible for maintenance and
Poland
months bank guarantee) of the insurance within the premises.
gross rent of the lease. Portugal

Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 95

United Kingdom

Poland
Legal Environment Concerning
Brokerage Law
It is a legal requirement to have a
license in order to trade as a real
estate broker in Poland.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros,
Polish Zloty or US Dollars per
square metre per month and are
paid monthly in advance in local
currency.
Service Charge: Service charges
are quoted in Euros, Polish Zloty
or US Dollars per month per
square metre in advance in local
currency. The parties usually
settle accounts every quarter or
half of a year.
Local Property Tax: Paid directly
by the landlord and included in
the service charges paid by
tenant.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are negotiable.
The usual rate paid by the
landlord is between 1 to 3
months rent. The fees paid by
the tenant are usually
between 0.5 to 1 month rent.
• Freehold – Fees are
negotiable and are typically 1
to 2.9% of the purchase price.
• Subletting – Same as leasing.
Property Transfer Tax (Stamp
Duty): For the purchase of a
property, the purchaser will be
responsible for paying a property
transfer tax of 2%, which is based
on the purchase price of the
property. In case of acquiring
shares of the company which
owns an estate, the buyer is
obliged to pay tax of 0.5% of the
value of the conveyance of shares.
Value Added Tax: The VAT rate in
Poland is 22% and payable on all
forms of transactions including
rent, building service charges,
agents fees and notary costs. The
exception is the 7% VAT for
transactions real estate classed
as residential investments.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
General Market Practices
Basis of Measurement: Net Denmark
Lettable Area or Building Owner’s
and Manager’s Association Estonia
Standard (BOMA). This is the most
Finland
commonly used area calculation
and is used for calculating the rent.
France
BOMA includes main usable space,
ancillary space such as toilets,
Germany
kitchens, separating walls, and
circulation space. Areas used for Greece
technical use, structural walls and
elevators are excluded. A “gross- Hungary
up” factor of 5 to 12% may be
applied to the Net Lettable Area, Ireland
particularly if the building is new.
Italy
Tegova – TEGoVA is a European
Latvia
non profit making association
composed of 39 valuers’ Lithuania
associations from 24 countries
representing about 120,000 Luxembourg
valuers in Europe. It has published
European Valuation Standards, at Netherlands
present under the 5th edition,
Norway
referred to as EVS 2003. It
includes material on valuations
Poland
for securitisation purposes, the
effect of market shock, corporate Portugal
governance and much expanded
sections of the valuation of Romania
agricultural properties.
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 96
United Kingdom
 Austria

Belgium

Bulgaria

Poland Cyprus

The valuation report includes: the
instructions, time period,
identification, basis of valuation,
compliance statement, condition
Czech Republic
When letting second generation
space, the landlord will generally Denmark
assume the costs of installing
partitioning according to a space Estonia

of the property, environmental plan provided by the tenant.

issues, risk assessment, valuation
schedules, the treatment of
process plant and machinery, the
currency or currencies in which
the valuations are to be reported,
publication and confidentiality
clauses, third party liability,
taxation, financial liabilities,
model clauses for the valuation
certificate.
Finland
When vacating premises, the
tenant is responsible for
France
reinstating the space to the
condition it was in when they first
Germany
occupied the space. Tenant
improvements that were Greece
undertaken during occupancy
cannot be sold to the landlord Hungary
unless otherwise stipulated in the
lease. If the landlord wishes they Ireland

may ask for the premises to

Italy
Fit Out/Reinstatement/ remain in their existing condition.
Dilapidations: New office
Latvia
developments generally include Use of Space: Both open space
carpeting and partitioning as plan and cellular offices are used Lithuania
standard and occasionally raised in Poland.
floors with costs are borne by the Luxembourg
landlord. Finishing of the Holidays
premises is limited by a budget of The main holiday periods are the Netherlands

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 214 218 218 209
GDP Annual % 1.4 1.9 -0.0 -4.1 Italy

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

Unemployment Rate % 7.6 8.0 7.6 9.6

Inflation Rate Annual % 3.1 2.4 2.6 -0.7
Lithuania

Average Real Wages Annual % -0.2 3.4 0.7 0.0

Luxembourg
GDP per head ($ at PPP) 20,840 21,850 22,270 21,410
Lending Interest Rate 5.2 6.1 6.8 5.1
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

Norway

Major Cities
Poland
City Core Population
Lisbon 563,210 Portugal
Porto 273,060
Amadora 188,450 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 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
unicameral. Mainland Portugal is organised around
municipalities and districts that have limited powers
but the islands of Madeira and Azores operate as
autonomous regions and have their own parliament
and administration.
Legal Structure
The Portuguese legal system is based on civil law
with strong influence from French and German civil
law. The Portuguese court system begins with courts
Francisco Sá Carneiro Airport, Oporto that is located
Finland
11 kilometres north west of the city and Faro Airport
4 kilometres west of the city. Funchal in Madeira and
France
the Azores are also connected via air.
Germany
Lisbon has a well developed bus and tram system
plus a metro system Metro de Lisboa for Greece
transportation around the city. The Lisbon metro
consists of four lines that radiate out to the north, Hungary
northeast and northwest of the city. The metro is
run by Metropolitano de Lisboa (www.metrolisboa. Ireland

of first and second instance (to deal with civil and
criminal matters) and a Supreme Court of Justice for
final appeals.
Hours of Business
The main business hours are Monday to Friday
09:00am – 13.00pm, 15.00pm – 19.00pm.
Visas
pt). General transport detail about Lisbon can be
Italy
obtained from Transporlis (www.transporlis.sapo.
pt).Oporto also has a bus, tram and 5 line metro
Latvia
system that connects to the airport and is run by
Metro do Porto (www.metrodoporto.pt) Lithuania
The majority of the Portuguese railway system is run Luxembourg
by the state operator Caminhos de Ferro Portuguese
(CP) (www.cp.pt) under the name Comboios de Netherlands

Portugal is a member of the Schengen area
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss
passport do not require a visa. Nationals from EU-
countries as well as Switzerland and Liechtenstein
may also enter without a visa. Citizens of the United
States of America do not require a visa for entry. A
residence permit is required if intending to stay for a
period exceeding 3 months from a Portuguese
Portugal. The Portuguese train system has express
Norway
links between Lisbon and Oporto and to the Algarve
during the peak tourist season. CP also operates a
Poland
regional train system that links other cities in
Portugal. A regional train system operates Portugal
throughout the rest of the country linking up the
other major towns and there are international Romania
connections to France and Spain.
Russia

consulate or embassy in the country of origin. International Dialling Code

Serbia
The country code is + 351

Slovakia
Coordinated Universal Time (UTC)
Eastern Standard Time + 5 hours Spain

Invest in Bureau Sweden

Further country information can be obtained from
the Portuguese Business Development Agency: Switzerland

www.investinportugal.pt
Turkey

Ukraine
BNP par i b as rea l estate 99

United Kingdom
 Austria

Belgium

Bulgaria

Portugal Cyprus

Typical Lease Terms
Legislation: The “new law” that
governs leases is based on the
law N° 321-B/90 of 15 October
Right of Renewal: On lease expiry
the tenant has no security of
tenure. At expiry of the term both
parties can terminate the lease. If
Czech Republic
Tenant and Landlord Obligations:
Tenant obligations are internal Denmark
repair, maintenance and
insurance while landlord Estonia

1990 and the “old law” that
covered older leases cannot be
utilized anymore.
Lease Length: The new regulation
does not specify a lease term per
se and considers leases to be
ongoing. There tends to be two
standard options of short term
with a minimum 6 months and
long term with a minimum of 5
neither party terminates the lease
it shall continue for a further
period of one year.
Break Options and Terminations:
Under the “new law” the tenant
had the right to terminate the
lease subject to 90 days prior
written notice at any time. The
landlord did not have the right to
terminate the lease before the
obligations are main structural
Finland
repairs. Maintenance and
insurance is paid by the landlord
France
and re-invoiced to the tenant.
Germany
Subletting: The tenant is not
permitted to sublet the premises Greece
without written consent from the
landlord, not to be unreasonably Hungary
withheld, or unless otherwise
stated in the lease. Ireland

years (3 years if signed through end of the 5 year period. Under

investment funds).
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the official inflation index (the
state registered index published
in October).
Italy
the “old law” the tenant was able
to terminate the lease with 6
Latvia
months prior written notice but
the landlord could not terminate Lithuania
the lease at any time unless the
tenant has breached the Luxembourg
covenants of the lease. The new
legal framework makes an Netherlands

Guarantee and Security Deposit: obligation for both tenant and

Norway
Landlords usually require landlord to fulfil the contract
information from prospective until its end without any
Poland
tenants such as banking details or possibility to break before its end.
access to company information. A Portugal
deposit of 2 months net rent must
be paid when the lease is signed Romania
and a bank guarantee is required
(usual value of 6 months rent). Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 100

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 Austria

Belgium

Bulgaria

Portugal Cyprus

Legal Environment Concerning
Brokerage Law
Each agent must be registered
and have a formal license from
Local Property Tax (Autarquica):
This tax is assessed on a
percentage (1.1-1.3%) of the
notional value of the building and
Czech Republic
Value Added Tax: The current VAT
rate in Portugal is 20% and is Denmark
payable on all forms of
transactions including service Estonia

AMI (association of property
developers). In accordance with
the law, an agent must have a
registered listing in order to be
able to offer a property to a
tenant. By virtue of this listing,
the landlord authorises the agent
to sell or let the property.
There is no standard listing
document, however, some of the
is paid by the landlord on an
annual basis.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are typically
charges and agents fees, but is
Finland
not paid on the sale or purchase
of freeholds. It can be possible to
France
elect to not charge VAT on rent.
This will vary from property to
Germany
property and will depend on the
legal status of the landlord. Greece
Other Taxes/Costs: For the Hungary
purchase of a property, the
purchaser will be responsible for Ireland

issues that need to be included in
each listing include a description
of the property, the job task, price
or rent, duration of the listing
(usually 6 months with 3 month
renewal periods) and agency fees.
Occupancy Costs
The following charges are payable
between 1 month net rent and notary fees.
Italy
10% of the first year’s net
rent. The landlord typically
Latvia
pays the agents fees.
• Freehold – Fees are paid by Lithuania
the seller and negotiated on a
case-by-case basis depending Luxembourg
on the purchase price. Fees
are typically between 3-5% of Netherlands

by the tenant: the agreed purchase price.

• Subletting – Same as leasing
Norway

Rents: Rents are quoted in Euros fees.

per square metre per month and
are paid monthly in advance.
Service Charge: Building service
charges are quoted in Euros per
square metre per annum and are
Poland
Property Transfer Tax: For the Portugal
purchase of a property, the
purchaser will be responsible for Romania
paying a property transfer tax
(“IMT”) of 6%, and the Stamp Tax Russia

paid quarterly in advance based of 0.8%, both of which are based

Serbia
on a provisional amount, which is on the purchase price of the
then adjusted once the actual cost property.
Slovakia
is known at the end of the year.

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 101

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 Austria

Belgium

Bulgaria

Portugal Cyprus

General Market Practices
Basis of Measurement: In
Portugal there is no official basis
of measurement. The following
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: Premises are There are certain times of the Denmark
typically provided to tenants with year in which the speed of
raised floors, mechanical and transactions are reduced due to Estonia

terms are typically used to define
floor areas:
• Construida – Measures gross
area including the shell of the
building. The “construida” is
equal to the sum of the areas
of each floor of a building,
taking into account the bare
exterior of the walls and the
finished floors. It encompasses
electrical, and lighting but
tenants are responsible to
perform their own fit out. Upon
lease expiry, the tenant is
obligated to return the premises
to the original condition it was in
upon initial occupancy. In
practice, if the improvements are
of good quality and are in good
condition, the landlord will
request they are left in the
holidays (Christmas, Easter and
Finland
summer holidays). In Portugal, the
period from July through until the
France
end of August is a peak holiday
period. Many of the smaller
Germany
companies close down in August
whilst larger firms operate with Greece
only a skeleton staff.
Hungary
Acknowledgement
We would like to thank Jean Freval Ireland

everything including, all premises. of Fenalu for assistance in the

Italy
basements and attic spaces, preparation of this country
balconies, loggias and Use of Space: Office premises in review.
Latvia
accessible roof verandas. This Portugal tend to be utilised as
is most common basis for cellular offices. Lithuania
calculating rentable area in
leases. Luxembourg
• Util – Measures net area
excluding the shell of the Netherlands

building. The “util” is equal to

Norway
the sum of the office areas
excluding parking areas,
Poland
basements, attic spaces not
fitted out for residential or Portugal
professional activities, and
corridors. Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
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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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 219 232 248 238
GDP Annual % 7.9 6.0 7.1 -4.0 Italy

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

Unemployment Rate % 5.2 4.1 4.4 7.6

Inflation Rate Annual % 6.6 4.8 7.8 5.2
Lithuania

Average Real Wages Annual % 11.6 16.9 14.6 0.8

Luxembourg
GDP per head ($ at PPP) 10,481 11,430 12,520 12,100
Lending Interest Rate 14.0 13.3 15.3 17.6
Netherlands
Exchange Rate to US$ 2.8090 2.4383 2.5189 3.1300

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

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 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
(Camera Deputatilor) and the 137 seat Senate
(Senat).
north of Bucharest. The other major airport is Traian
Finland
Vuia International Airport (www.aerotim.ro) located
in Timişoara in the west of the country.
France

Legal Structure Bucharest is the only city with a well developed

The Romanian legal system is based on civil law
with influences from the French civil code. The court
system is hierarchical consist of local and around 40
county courts, 15 courts of appeal and ultimately
with the Supreme Court, the Court of Cassation and
Justice.
Germany
metro and suburban system. The Metro system is
run by Metronex (www.metrorex.ro) with other Greece
public transport such as buses and trams run by the
semi-public Regia Autonomă de Transport Bucureşti Hungary
(RATB) (www.ratb.ro) corporation.
Ireland

Romania has an extensive rail network connecting

Italy
Hours of Business across the country and internationally with train
The main business hours are Monday to Friday service to Budapest, Vienna and Munich. The
Latvia
08:00am – 17:30pm. principle rail operator is the state owned Căile
Ferate Române (www.cfr.ro/) who also provide Lithuania
Visas travel details (www.mersultrenurilorcfr.ro).
Romania is not a member of the Schengen area Luxembourg
agreement. Holders of an EEA (EU Member States, International Dialling Code
Iceland, Liechtenstein and Norway) or Swiss The country code is + 40 Netherlands

passport do not require a visa. Nationals from EU-

Norway
countries as well as Switzerland and Liechtenstein Coordinated Universal Time (UTC) + 2 hours
may also enter without a visa. Citizens of the United Eastern Standard Time + 7 hours
Poland
States of America do not require a visa for entry. A
residence permit is required if intending to stay for a Invest in Bureau Portugal
period exceeding 3 months from the Romanian Further country information can be obtained from
Authority for Aliens. the Romanian Agency for Foreign Investment: Romania
www.arisinvest.ro
Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 104

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Romania
Typical Lease Terms
Legislation: The law that governs
lease contracts is based on the
Romanian Civil Code. Registration
of a lease contract to the
authorities of the Ministry of
Finance is mandatory. Leases
longer than 3 years should be
registered with the Land Registry.
It is not compulsory to use
standard contracts; any form of
contract is acceptable as long as
it corresponds to Romanian
legislation.
Lease Length: The average lease
is 5 years, although 7-10 year
leases are more common for
larger occupiers.
Rent Escalation/Rent Review:
Typically, rents are indexed
annually (upwards only) with the
European Union Consumer Price
Index published by EUROSTAT,
both for Class A and B office
buildings. Alternatively the
parties can agree to increase the
rent by a predetermined amount.
The rent is reviewed if stipulated
in the initial lease.
Guarantee and Security Deposit:
Landlords typically require a
guarantee equivalent to 3 month
rent (cash deposit or bank
guarantee letter) from
prospective tenants upon signing
of the lease contracts.
Rights of Renewal: Most
contracts include renewal
options. Unless an option to
renew was previously agreed,
leases will terminate at the date
of expiry. If an option to renew
was agreed, then the current
lease terms and rent will be
renegotiated.
Break Options and Terminations:
Break options are uncommon
practices. Tenants who
prematurely exit out a lease are
subject to heavy penalties.
The penalty for early lease
termination is subject to
negotiation and depends on
current market conditions.
Exceptional lease agreements
allow the tenant to terminate the
lease without penalties under
very specific circumstances.
The landlord is not allowed to
terminate an ongoing lease unless
the tenant fails to meet its
covenants. If the landlord
terminates the lease prematurely
he is liable for compensation to
the tenant.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Tenant and Landlord Obligations:
Normally the landlord is Denmark
responsible for building
maintenance, structural and Estonia
common area repairs, electro-
Finland
technical installation repairs
inside the lease premises, as well
France
as other interior repairs not
caused by the tenant. Usually the
Germany
maintenance expenses and
additional services, such as Greece
security, central reception are
paid by the landlord and then re- Hungary
invoiced to the tenant or included
in service charges. The building Ireland
owner is also responsible for the
Italy
payment of insurance and local
property taxes which are passed
Latvia
on to tenants through service
charges. Tenant obligations are Lithuania
internal repairs and general
maintenance within their Luxembourg
premises. The tenant pays for
third-party insurance. Netherlands
Norway
Subletting: The tenant is
permitted to sublet the premises
Poland
without change of use/destination
with the prior written consent Portugal
from the landlord who must not
unreasonably withhold Romania
permission. The landlord is not
obliged to accept the subtenant Russia
but in practice if the subtenant’s
Serbia
covenant is strong, then the
sublet will generally be accepted.
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 105
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 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

Romania. No specific Rents: Rents are quoted in Euros include:

qualifications are required to be a
property agent. Agents may act as
a consultant representative of one
party (owner, tenant/purchaser)
or alternatively act as an
intermediary. Previously signed
contracts are required for the
agent to charge a fee for the
services provided. It is always
advisable when dealing with
per square metre per month and
are paid quarterly or monthly in
advance. Rents are paid in local
currency Romanian New Lei
(RON).
Service Charge: Building service
charges are quoted in Euros per
square metre per month and are
paid together with the rent
Finland
Agents Fees
France
• Leasing – Fees are negotiable
with the usual rate ranging
Germany
between 10-12% of the first
year’s net rent. Fees are paid Greece
by the landlord or by the
tenant depending on whom Hungary
the agent represents. For
larger or higher value Ireland

agents in Romania to enter into a monthly/quarterly in advance. instructions this percentage

written contract defining the
duties to be carried out by the
agent, including fees, deadlines,
and scope of work.
Each party typically pays their
respective agent. On occasion the
landlords’ agent may sometimes
Italy
Service charges are based on a can be reduced as
provisional amount that is appropriate.
Latvia
adjusted once the actual cost is • Freehold – Fees are usually
known at the end of the year. All paid by the seller and are Lithuania
service charges must be agreed negotiated on a case-by-case
upon separately in the lease basis depending on the Luxembourg
agreement. These usually cover purchase price. Fees are
maintenance of common areas usually between 1–3% of the Netherlands

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

agent only earns fees directly conditioning, gardening, building

from the tenant. In general, if a
property is introduced to a
prospective tenant/purchaser and
viewed with the introducing
agent, then the tenant/purchaser
is legally obligated to pay the
utilities, 24 hour security and
daytime concierge. The landlord
typically invoices building
insurance and local property
taxes through the service
charges.
Poland
Property Transfer Tax (Stamp
Duty): In case of asset deals Portugal
performed by individuals, the
seller pays a tax of 1-3% applied Romania
to the value of the transaction,
depending on the value and the Russia

agent a fee if an agreement on ownership period. The highest

that property is signed.
In case of exclusive
representation instructions
agents’ fees are paid exclusively
by the represented client.
Serbia
Local Property Tax: Paid by the percentage of taxes is applied for
landlord and invoiced back to the properties transacted in less than
Slovakia
tenant through the service 3 years from acquisition date.
charge. This tax is assessed on a Spain
percentage of the notional value
of the building and paid by the Sweden
landlord on an annual basis.
Switzerland

Turkey

Ukraine
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Belgium

Bulgaria

Romania Cyprus

In case of asset deals performed
by companies, the income
obtained by the seller after the
dispose of the property becomes
On multi tenant buildings the
space occupied by the entrance
lobby, halls, restrooms and any
other common area are allocated
Czech Republic
provided by landlords. When
letting second generation space, Denmark
the landlord will generally
assume the costs of installing Estonia

part of the total income of the
company quarterly recorded. If
the company obtains a profit after
the deduction of the total
expenses, this will be subject to a
16% tax.
In both cases the parties have to
pay taxes to the National Agency
for Cadastre and Land
Registration and the notary fees.
to all tenants pro-rata along with
the exclusive area occupied by
each tenant. Gross internal area
excludes staircases, elevator
shafts and non-load bearing inner
walls. Outdoor terraces are not
included in the measurement of
the premises for the calculation of
rent for offices being quoted
separately (generally half of the
rent quoted for the usable area).
partitioning according to a space
Finland
plan provided by the tenant.
France
Use of Space: Cellular offices,
open plan floors and mixed plan
Germany
offices are all common in
Romania. The most popular form Greece
of premises is open space floors
for cost reasons and flexibility in Hungary
partitioning and use.
Ireland

Note: Please note that the above
mentioned fiscal obligations are
based on the provisions of the
currently enforced Fiscal Code (as
at January 2009) which is
expected to be amended in the
near future.
Fit Out/Reinstatement/
Dilapidations: Office buildings
usually include: carpet, suspended
ceilings, raised floors, lighting and
wiring, heating, mechanical and
electrical servicing. Raised floors
and centralized cooling systems
are generally standard in new
Holidays
Italy
Summer holidays (mid-June-last
week of August) create a period of
Latvia
slow activity and few transactions
are completed in this time. Other Lithuania
significant holiday periods when
transactions may be affected are Luxembourg
between mid December to early
January and during Easter. There Netherlands

Value Added Tax: VAT (19%) is
payable on rent and service
charges and is recoverable.
General Market Practices
Basis of Measurement: Landlords
use gross internal area (GIA) in
square meters as the most
common method of area
buildings. In a tenants’ market, are also a number of public
Norway
the landlord may assume the cost holidays stipulated in the Labour
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
costs are usually borne by the holydays. Portugal
tenant.
Romania
All works, decorations,
installation, additions, and Russia

determination and for calculating furnishings that the tenant may

the rent. GIA includes main office
usable space, ancillary space such
as toilets, kitchens, separating
walls and circulation space
exclusively located within the
leased premises.
Serbia
undertake on the premises during
the lease shall, at the end of the
Slovakia
lease or at the end of renewal,
belong to the landlord, unless the Spain
latter should demand the return
of the premises to their original Sweden
state. Fit-out costs for tenants’
specific requirements are not Switzerland

Turkey

Ukraine
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 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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 1,828 1,976 2,087 1,982
GDP Annual % 7.7 8.1 5.6 -5.0 Italy

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

Unemployment Rate % 7.2 6.1 6.4 9.6

Inflation Rate Annual % 9.7 9.0 14.1 12.1
Lithuania

Average Real Wages Annual % 14.4 16.2 10.3 -4.0

Luxembourg
GDP per head ($ at PPP) 13,235 14,716 15,940 15,270
Lending Interest Rate 10.4 10.0 12.2 15.0
Netherlands
Exchange Rate to US$ 27.1910 25.5808 24.8529 32.8000

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
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 Austria

Belgium

Bulgaria

Russia Cyprus

Political Structure
Russia is a federal republic that consists of 83
regions. The head of state is the president who is
directly elected to serve a four-year term (this
Czech Republic
and Domodedevo (www.domodedovo.ru), located
34 kilometres to south of the city. Both are connected Denmark
to the centre of Moscow by express railway.
St Petersburg’s Pulkovo Airport (www.pulkovo.ru) Estonia

structure is currently being revised). The president
has considerable executive power including
appointing the prime minister. The Federal Assembly
(Federalnoye Sobraniye) is bicameral. The Upper
House is the Federation Council (Sovet Federatsii)
and the lower house, the State Duma
(Gosudarstvennaya Duma), which is the main
legislative organisation.
Legal Structure
Russia’s legal system is based on civil law. The
is located 17 kilometres to south of the city.
Finland
Both Moscow and St Petersburg have efficient metro
France
systems that are the best way to get around the city.
The state run Moscow metro (http://engl.mosmetro.
Germany
ru) has the most comprehensive coverage and also
operates Moscow’s monorail system. St Petersburg Greece
has a well developed bus and tram system as well
its metro (www.metro.spb.ru in Russian only) Hungary
Business travel around Russia is best undertaken by Ireland

Russian judiciary has three branches that are
headed by the Supreme Court, Supreme Court of
Arbitration and Constitutional Court. The lowest
level of court in general jurisdiction is the municipal
court that exists in each city or rural district and
handles the majority of civil and criminal cases.
Commercial cases are heard in the arbitration court
system under the Supreme Court of Arbitration.
air given the size of the country, although the
Italy
Moscow train to St Petersburg is a high speed link.
Most other transport around Russia is undertaken by
Latvia
train. Moscow has nine major rail termini for
suburban travel and cross country, and it is the Lithuania
western terminus for the Trans-Siberian railway to
Vladivostok on the Pacific east Coast. Moscow has Luxembourg
international connections to the Baltic States,
Eastern Europe, Austria, Germany, Italy and Greece. Netherlands

Hours of Business Saint Petersburg has international railway

Norway
The main business hours are Monday to Friday connections to Finland and Germany.
09:00am – 18.00pm.
Poland
International Dialling Code
Visas The country code is + 7 Portugal
Visas are required to visit Russia that can be
obtained from the consular section of the Russia has 11 time zones. Romania
appropriate Russian foreign embassy representation. Coordinated Universal Time (UTC) + 3 hours
Russia is not a member of the Schengen area (Moscow) to + 10 hours (Vladivostok) Russia

agreement. Eastern Standard Time + 8 hours (Moscow) to

Serbia
+ 15 hours (Vladivostok)
Transport
Slovakia
The principle international airports are at Moscow, Invest in Bureau
St Petersburg and Ekaterinburg. Moscow has two Other information can be obtained from the Russian Spain
main airports for international travel: Sheremetyevo Economic Ministry’s (www.economy.gov.ru/index.
(www.sheremetyevo-airport.ru), located html) Foreign Investment Promotion Centre website: Sweden
29 kilometres to the northwest of Moscow www.fipc.ru/fipc
Switzerland

Turkey

Ukraine
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 Austria

Belgium

Bulgaria

Russia Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is based on the Russian
Civil Code.
Break Options and Terminations:
Premature termination is possible
upon a mutual agreement
between parties and as provided
Czech Republic
The landlord is bound to hand
over the premises to the tenant in Denmark
good condition. The landlord is
obliged to carry out all minor Estonia

by applicable law. If the lease repairs, and if necessary, any

Lease Length: Typically 3-7 years
for offices and for warehouses it is
7-10 years.
Rent Escalation/Rent Review:
Rent increases are usually fixed by
annual rental indexation of
between 3 to 7%. The terms and
type of indexation are negotiable.
Finland
agreement is terminated by the major repairs of structural parts
tenant before lease term expires, and engineering systems as a
France
the lease deposit is taken by the whole.
landlord as a contract penalty.
Germany
Subletting: The tenant has the
Tenant and Landlord Obligations: right to sublease the leased Greece
The tenant is required to use the premises only after having signed
leased premises in accordance an agreement with the Landlord. Hungary
with the lease agreement. This
includes using the equipment, Legal Environment Concerning Ireland

Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
The security deposit guarantees
the execution of the tenant’s
obligations according to the lease
agreement. A deposit of 3 months
engineering and technical systems
in the appropriate manner and not
carrying out modifications to the
structural components of the
premises without a preliminary
written agreement with the
landlord. The tenant is bound to
pay the rent and other dues
according to conditions stated in
Brokerage Law
Italy
No specific qualifications are
required to be a property
Latvia
consultant in Russia. Brokerage
law is governed by the Russian Lithuania
Civil Code. In general, if a property
is introduced to a prospective Luxembourg
tenant who views it with the
introducing agent, then the tenant Netherlands

rent is required. the agreement. is legally obligated to pay the

Rights of Renewal: The length
and terms of renewal are subject
to negotiation. If the tenant plans
to renew the length of lease
contract, the tenant is obliged to
inform the landlord with 6
months notice.
Norway
agent a fee if the tenant signs a
Any adjustment to rights and lease agreement on that property.
Poland
obligations under the lease
agreement must have preliminary Occupancy Costs Portugal
written agreement with the The following charges are payable
landlord. The tenant may not by the tenant: Romania
sublease the premises or transfer
rights and obligations under the Rents: Rents are quoted in US Russia

lease agreement to another party Dollars, Euros or Rubles per

Serbia
without permission. Tenants may square metre per year and are
not offer free use of the premises paid quarterly or monthly in
Slovakia
or mortgage the premises. The advance.
premises may not be used as a Spain
deposit for an authorized capital
fund of companies or as a payment Sweden
of shares for co-operative.
Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 110

United Kingdom
 Austria

Belgium

Bulgaria

Russia Cyprus

Service Charge: Service charges
are quoted in US Dollars per
square metre per year and are
paid quarterly in advance.
Property Transfer Tax (Stamp
Duty): When the real estate deal
is registered the state duty is to
be paid (7,500 rubles for a legal
Czech Republic
Fit Out/Reinstatement/
Dilapidations: Most premises are Denmark
delivered in shell and core
condition i.e. partially finished Estonia

body, 500 rubles for an open space. In some cases

Local Property Tax: Land Tax is
assessed on a percentage of the
notional value of the land plot
and is paid by the landlord on an
annual basis. This cost is passed
on to the tenant.
Acquisition Costs
Usual acquisition costs that a
company will have to pay when
individual). Usually the state
duty is paid by the party that
takes the rights.
Value Added Tax: The current VAT
rate in Russia is 18% and is
payable on all forms of
transactions including rent,
building service charge, agents
fees, notary costs and property
Finland
suspended ceiling with lighting
and floor carpeting are included.
France
Tenant fit out costs are partially
compensated by the granting of a
Germany
rent free period.
Greece
Use of Space: Companies occupy
office space usually as cellular Hungary
offices mixed with open spaces.
Ireland

buying or leasing new premises transfer tax. Holidays

include:
Agents Fees
• Leasing – Conclusion of a
lease arrangement on the
property results in the client
paying the agency a fee in the
amount of 10% of lease rate
General Market Practices
Basis of Measurement: There are
the following measuring
standards:
BTI standards for preliminary
permissions. This standard is also
Italy
There are certain times of the
year when the speed of
Latvia
transactions are significantly
reduced due to holidays. In Russia Lithuania
there are a number of public
holidays from the beginning to the Luxembourg
middle of January and also in
early May. Besides, the period Netherlands

per year. VAT is accounted
separately.
• Freehold – Conclusion of
purchase contracts on the
property results in the client
paying the agency a fee in the
amount of 6% of the total cost
of the property. VAT is
accounted separately.
widely used in regions and for from July until the end of August is
Norway
class C premises. a peak holiday period.
Poland
BOMA (Building Owners and Acknowledgement
Managers Association) We would like to thank Elena Portugal
international standards for high Galanova of ASTERA Group for
quality premises. assistance in the preparation of Romania
this country review.
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 67 72 76 73
GDP Annual % 5.2 6.9 5.4 -4.0 Italy

Net direct foreign investment (US$ millions) 4387 2524 2700 1300
Labour Force (millions) 3.8 3.7 3.7 3.7 Latvia

Unemployment Rate % 20.9 18.1 1.6 20.3

Inflation Rate Annual % 12.7 6.5 10.9 9.7
Lithuania

Average Real Wages Annual % 10.4 14.5 4.3 -0.6

Luxembourg
GDP per head ($ at PPP) 9,388 10,337 11,160 10,810
Lending Interest Rate 18.3 12.6 16.0 17.0
Netherlands
Exchange Rate to US$ 66.8170 58.1513 55.8318 72.8807

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,
is unicameral and called the National Assembly
(Narodna Skupstina).
Legal Structure
Serbia’s civil and criminal law is based on Roman
civil law although the judiciary is independent and
has equal status with the legislative and executive
branches. The judicial system is managed by the
Supreme Judicial Council and consists of regional
courts, district courts, and the supreme courts of
km from the city centre. There is also another civil
Finland
airport “Konstantin Veliki”, located in the city of Nis.
There are no direct rail services between Serbia and
France
Western Europe but there are daily services to
Budapest, Bucharest, Istanbul and Thessalonika. Pan
Germany
European Corridor N° 10 is one of the most important
European highways passing through the country, Greece
leading from Salzburg through Belgrade and Niš and
branching to Athens and Sofia. Another branch of the Hungary
corridor links the Capital with Budapest.
Ireland

cassation for civil and criminal appeals. International Dialling Code

Italy
The country code is + 381.
Hours of Business
Latvia
Businesses usually open around 08:00 and 09:00am Coordinated Universal Time (UT C) + 2 hours
and close around 17:00 and 18:00pm. Eastern Standard Time + 7 hours Lithuania

Visas Invest in Bureau Luxembourg

Serbia is a non – EU member, so it needs a Visa for Further country information can be obtained from
its citizens wishing to travel to EU, but also for major the Invest Serbia bureau (SIEPA): Netherlands

countries in the World. According to the latest www.siepa.sr.gov.yu

Norway
announcements from the Brussels, it is expected for
Serbia to be on “White Schengen List” from the
Poland
January 1st 2010. It doesn’t require Visa’s for an Ex –
Yugoslav countries, except Slovenia. Any foreigner Portugal
wishing to stay on the basis of an employment
contract must acquire a work permit from the local Romania
Labour Office.
Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 113

United Kingdom
 Austria

Belgium

Bulgaria

SERBIA Cyprus

Typical Lease Terms
Legislation: Leases are governed
by the Serbian Law on Obligations
and Contracts / Serbian State
Rights of Renewal: Options to
renew can be negotiated between
the two parties. Lease contracts
agreed for a definite term may be
Czech Republic
Tenant and Landlord obligations:
Tenant obligations are for internal Denmark
repair and maintenance whilst
landlord obligations are for Estonia

Gazette issue No. 29/78, 39/85,
45/89, 57/89 and State Gazette
issue No. 31/93. There is no
special law concerning
commercial leases.
Lease Length: No minimum initial
lease length is legally prescribed
but the maximum lease length is
10 years. In practice, lease period
are negotiable. Negotiation of 10
automatically renewed for an
indefinite period, if the tenant
continues to use the property
after the end of the lease and
there is no objection by the
landlord.
Break Options and Terminations:
Break options and termination of
lease contracts for a definite term
have to be negotiated between
external and structural repairs.
Finland
There are no standards for
insurance clauses so most lease
France
contracts do not deal with it. But
it is common, especially for big
Germany
landlords with mostly office
space, to oblige the tenant to Greece
obtain full property insurance for
the premise. Hungary
Subletting: Full subletting is Ireland

years lease is difficult as most
landlords do not feel secure and
prefer leasing for a shorter period.
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the Harmonized Index of
Consumer Prices (HICP) published
by the Serbian Republic Statistic
the parties along with
compensation. Lease contracts for
indefinite term may be terminated
by any of the parties with one
month pre-notice.
In case of transfer of the leased
property on part of the landlord
(sale, liquidation, foreclosure,
allowed only with the written
Italy
consent of the landlord. Such
consent may be given in general
Latvia
form as a clause of the lease
contract. Partial subletting is Lithuania
allowed without consent of the
landlord unless the lease contract Luxembourg
explicitly prohibits it.
Netherlands

Office. The basis of rent escalation
is freely negotiable and in the
past escalation using the EUROST
AT index of consumer prices was
not uncommon. It is not
uncommon, especially for big
companies with mostly office
space, to have rental adjustments
after 5 years on the basis of a
inheritance) the lease contract Legal Environment Concerning
Norway
shall be valid and binding the new Brokerage Law
owner if it is registered in the Real There is no law or regulation of
Poland
Estate Register with the the activities of real estate
Recordation Agency. If the lease brokers in Serbia. Law is under Portugal
contract is not registered but has public debate it will introduce all
a notary authenticated date of issues regarding real estate in Romania
signing, it shall be valid and Serbia.
binding on the new owner until Russia

market survey of rents.
Guarantee and Security Deposit:
Generally a deposit of 2 to 3
months gross rent is payable
upon the signing of the lease
contract.
either the expiry date or one year Occupancy Costs
Serbia
following the property transfer The following charges are payable
date. If the lease contract is not by the tenant:
Slovakia
registered or notary
authenticated, it is valid and Rents: Rents are usually quoted in Spain
binding on the new owner if the Euros per square meter per month
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

SERBia
Service Charge: Building service
charges for commercial leases is
3 Euros per square meter per
month. Usually service charges
are paid monthly in advance with
the rent. For residential property,
fixed service charge is applied
only for modern buildings or
complexes that have
arrangements with a property
management company.
Local Property Taxes: There is
property tax in amount of 0.4% of
the value of the property and is
payable once a year.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually 1
month’s net rent plus VAT.
• Freehold – Fees are usually
between 2% and 3%. For
reasonably large transactions
lower fees are negotiated,
depending on the size of the
property involved, the
particular market
characteristics at the time
etc., but even in these cases
fees below 1% of the
transaction value are
uncommon.
• Sublease – Same as leasing
fees above.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Property Transfer Tax: For Use of Space: Traditionally older
purchases of property, a property offices in Serbia have tended to be Denmark
transfer tax is 2.5%. constructed as cellular offices.
Recently, in newer buildings, Estonia
VAT: VAT in Serbia is currently offices are predominantly open
Finland
18%. Professional fees are subject space structure, providing the
to VAT. possibility for the leaser to
France
organize the space according to
Other Taxes/Costs: To finalize the their needs.
Germany
purchase of a property a notary
fee is paid, determined on a scale Holidays Greece
based on the purchase price. There are two periods during the
year when the speed of Hungary
General Market Practices transactions are significantly
Basis of Measurement: There is affected by holidays in August and Ireland
no standard basis of from Orthodox Christmas till mid
Italy
measurement in Serbia. For January.
leases, the premises are typically
Latvia
measured based upon the built up Acknowledgement
area stated on architectural plans We would like to thank Jovan Lithuania
for planning approval. For Jovanovic of Danos & Associates
property purchases construction for their assistance in the Luxembourg
companies imposed Gross Area as preparation of this country
basis of measurement, which review. Netherlands
includes the built up area and the
Norway
proportional part of all common
space areas of the building, which
Poland
may reach even 10 – 20% of the
built up area of the premises. Portugal
Fit Out/Reinstatement/ Romania
Dilapidations: The tenant is
typically responsible for all costs Russia
associated with fit out. Tenant is
Serbia
responsible to repairing any
dilapidations, unless it is proven
Slovakia
that the damages are caused a
way that tenant may not be held Spain
responsible by law or contract.
Sweden
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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 93 103 109 105
GDP Annual % 8.5 10.4 6.4 -4.0 Italy

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

Unemployment Rate % 10.4 8.4 7.6 11.5

Inflation Rate Annual % 4.5 2.8 4.6 1.5
Lithuania

Average Real Wages Annual % 4.2 4.3 3.4 -0.7

Luxembourg
GDP per head ($ at PPP) 17,580 19,920 21,630 20,850
Lending Interest Rate 7.7 8.0 5.7 7.5
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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

Political Structure
Slovakia is a parliamentary republic with a president
as head of state who is elected by popular vote to
serve a five-year term. Slovakia’s parliament is the
Czech Republic
Public transport in Bratislava consists of buses,
trolleybus and trams and is managed a the city Denmark
municipal company, Public Transport Company
Bratislava Ltd (Dopravný podnik Bratislava) Estonia

unicameral National Council of the Slovak Republic
(Narodna Rada Slovenskej Republiky).
Legal Structure
Slovakia’s legal system is based on civil law with
influences from Austro-Hungarian codes. The Slovak
judiciary consists of local and regional courts that
are subordinate to the Supreme Court that acts as
the highest court of appeal.
Hours of Business
(www.dpb.sk). Bratislava Integrated Transport
Finland
(Bratislavská integrovaná doprava) acts to link the
services to in the city to the suburbs and elsewhere
France
in the country.
Germany
Bratislava is connected to other cities in Slovakia,
with the larger towns possessing more than one Greece
train station. It also has international rail
connections to the Czech Republic, Austria and Hungary
Hungary. Trains are run by the state owned company
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

known as M. R. Štefánik Airport, and is located 9

Serbia
kilometres north-east of the capital. The other
international airport serving Slovakia is Košice
Slovakia
International Airport (www.airportkosice.sk) located
6 kilometres to the south of Košice. Bratislava Spain
Airport is connected to the city centre by train and
bus while Košice is bus only. Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 117

United Kingdom
 Austria

Belgium

Bulgaria

Slovakia Cyprus

Typical Lease Terms
Legislation: The law that governs
commercial leases is based on the
Rent Act.
Czech Republic
Break Options and Terminations: Legal Environment Concerning
Break options are negotiable but Brokerage Law Denmark
tenants should be aware of notice There is no legal requirement to
periods as the options will expire have a licence to trade as an Estonia

Lease Length: There is no
maximum term limit for leases
but 3 and 5 year leases are typical
in Slovakia.
Rent Escalation/Rent Review:
Indexation of rents is specified in
the lease agreement. The
Consumer Price Index (Index
spotrebiteľských cien) produced
and become null and void if notice
is not delivered on time. Some
lease agreements allow for the
termination of the lease prior to
the break option under the
condition of a penalty, subject to
negotiations and current market
conditions.
Tenant and Landlord Obligations:
Normally the landlord is
agent in Slovakia. Each party
Finland
typically pays their respective
agent. On occasion the landlord’s
France
agent will sometimes earn a fee of
half a month’s net rent from the
Germany
tenant or the landlord. The
tenant’s agent only earns fees Greece
directly from the tenant.
Hungary
Occupancy Costs
The following charges are payable Ireland

by the Slovak Statistical Office is responsible for building by the tenant:

often used although foreign
indices such as the EU Consumer
Price Index may also be used.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as a credit rating.
Italy
maintenance, insurance, and
technical installations and the Rents: Rents are quoted in Euros
Latvia
tenant is responsible for per square metre per month and
maintenance and insurance are paid quarterly in advance. Lithuania
within the premises. Sometimes negotiations result in
rents being paid monthly in Luxembourg
Subletting: The subletting of advance.
property is allowed but only with Netherlands

Either a deposit of 3–4 months’
net rent or a bank guarantee is
necessary to complete the lease.
Rights of Renewal: If an option to
renew was not previously agreed,
the lease will terminate and must
be renegotiated.
the prior written consent of the
landlord. The landlord is not
required to approve the proposed
sublease although must give
reasonable grounds for denying a
sublease.
Service Charge: Service charges
Norway
are quoted in Euros per square
metre per month and are paid
Poland
monthly in advance.
Portugal
Local Property Tax: Paid directly
by the landlord and billed to the Romania
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

Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
General Market Practices
Basis of Measurement: There are
two standard measuring
practices:
Czech Republic
When vacating premises, the
tenant is responsible for Denmark
reinstating the space to the
condition it was in when they first Estonia

include: occupied the space, allowing for

• Net Lettable Area or Building standard wear and tear. Tenant Finland

Agents Fees Owner’s and Manager’s improvements that were

• Leasing – 14 to 15% from one
year’s rent (equates to
approximately 2 months net
rent).
• Freehold – 1.5% to 3% of the
sale price.
• Subletting – same as leasing.
Association Standard (BOMA).
This is the most commonly
used area calculation and is
used for calculating the rent.
BOMA includes main usable
space, ancillary space such as
toilets, kitchens, separating
walls, and circulation space.
France
undertaken during occupancy
cannot be sold to the landlord
Germany
unless otherwise stipulated in the
lease. The landlord has the option Greece
generally of leaving the premises
in their current condition. Hungary
Use of Space: Cellular and open Ireland

Property Transfer Tax (Stamp
Duty): The property transfer tax
was cancelled in 2005. Now it is
only the purchase price plus VAT.
Value Added Tax: The VAT rate in
Slovakia is currently 19% and
payable on all forms of
transactions including rent,
Areas used for technical use, plan space are both common.
Italy
structural walls and elevators
are excluded. A “gross-up” Holidays
Latvia
factor of 5 to 12% may be There are certain times of the
applied to the Net Lettable year when the speed of Lithuania
Area, particularly if the transactions are reduced due to
building is new. holidays. August and January tend Luxembourg
• Gross Base Area or BGF to generally be the main holiday
(Brutto Geschossfläche). This periods. Netherlands

building service charge, agents area is measured from

Norway
fees, notary costs, and property internal wall to internal wall Acknowledgement
transfer tax. and includes all the gross We would like to thank Natalia
Poland
area within. Trihob and Richard Lemon of
Dr Max Huber & Partners for Portugal
Fit Out/Reinstatement/ assistance in the preparation of
Dilapidations: New office this country review. Romania
developments generally include
raised floors, carpeting and Russia

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 1,230 1,275 1,290 1,235
GDP Annual % 3.9 3.7 1.2 -4.2 Italy

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

Unemployment Rate % 8.5 8.3 11.3 18.3

Inflation Rate Annual % 3.5 2.8 4.1 -0.8
Lithuania

Average Real Wages Annual % 0.7 1.5 0.8 1.2

Luxembourg
GDP per head ($ at PPP) 28,398 30,504 31,300 30,000
Lending Interest Rate 5.8 6.6 7.4 6.5
Netherlands
Exchange Rate to US$ 0.7964 0.7306 0.6803 0.7533

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
different levels of autonomy. The supreme legislative
authority is the National Parliament (Cortes
Generales) that is bicameral, consisting of the upper
chamber, the Senate, and the lower chamber, the
Congress of Deputies.
Legal Structure
The Spanish legal system is based on civil law. At the
top of court system is the Supreme Court that is
court of final appeal, followed by the Audiencia
to Madrid via Madrid’s underground system, the
Finland
Metro (www.metromadrid.es). Madrid also has a
light rail system called Cercanías (www.renfe.es/
France
cercanias). All of Madrid’s transport systems are
part of the Consorcio Regional de Transportes (www.
Germany
ctm-madrid.es).
Greece
The two largest operators in Spain are the state
owned Renfe Operadora, the former Spanish Hungary
National Railway Network (http://horarios.renfe.es)
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

Spain
Typical Lease Terms
Legislation: The statue that
governs leases is based on the
Spanish Civil Code and the 1994
Urban Leases Law.
Lease Length: Negotiable, but
typically 5 years.
Rent Escalation/Rent Review:
Rent is adjusted annually based
on the Cost of Living Index.
Indexation clauses in leases
usually include an automatic
adjustment whenever the Cost of
Living Index changes by a
predefined amount.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit of 2 months net rent is
necessary to complete the lease.
In some cases, a bank guarantee
is required.
Rights of Renewal: The tenant
has no guaranteed security of
tenure. Options to renew can be
negotiated with the length and
terms of such options being
subject to negotiations.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Break Options and Terminations: Subletting: Generally, subletting
Break options are negotiable, but is allowed with the written Denmark
tenants should aware of notice consent of the landlord. The
periods otherwise terms can landlord must accept the Estonia
continue automatically. In most subtenant if they have an average
Finland
cases if the either party does not covenant but is allowed to
give notice in advance as agreed, prohibit subletting if the use of
France
the lease will automatically the premises by a subtenant
continue for a previously agreed substantially deviates from the
Germany
period of time. Some lease original use by the main tenant. If
agreements allow for the not explicitly detailed in the lease, Greece
premature exit of a lease under tenants are able to charge higher
the condition of a penalty. The rents to subtenants then what Hungary
penalty for early lease they pay to the landlord.
termination used to be the Ireland
equivalent of the total remaining
Italy
lease liability, but now it is usually
subject to negotiations and
Latvia
depends on current market
conditions. Lithuania
Tenant and Landlord Obligations: Luxembourg
Normally the landlord is
responsible for building Netherlands
maintenance, structural repairs,
Norway
insurance, and technical
installations and the tenant is
Poland
responsible for maintenance and
insurance within the premises. Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 122
United Kingdom
 Austria

Belgium

Bulgaria

Spain Cyprus

Legal Environment Concerning
Brokerage Law
Agents do not need to be
registered to practice in Spain.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
Czech Republic
Value Added Tax: The current
VAT rate in Spain is 16% and Denmark
payable on all forms of
transactions including rent, Estonia

The Spanish Civil Code and the
Spanish Commerce Code govern
Spanish brokerage law. The agent
and tenant, or the agent and
landlord, typically sign a mandate
agreement or formal intermediary
fees recognition for professional
services. Depending on the
structure of the transaction, fees
will be paid by either the tenant
or more usually the landlord.
include:
Agents Fees
• Leasing – Fees are usually
between 8%-12% of the first
year’s net annual rent.
• Freehold – Fees, paid by the
seller are typically 0.5-3% of
the purchase price
• Subletting – In a landlord’s
market, a subtenant would
building service charge, agents
Finland
fees and notary costs.
France
Other Taxes/Costs: To finalise a
purchase of a property, a
Germany
registered notary must be
instructed who will charge a fee Greece
of 0.5-1% of the purchase price.
Hungary
General Market Practices
Basis of Measurement: There are Ireland

pay fees to the agent two standard measuring

Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Euros
per square metre per month and
are paid monthly in advance.
Property Transfer Tax (Impuesto
instructed by the main tenant
equivalent to 15% of the net
annual rent. In tenant friendly
markets, the main tenant
usually assumes part, or all,
of both the commission fees.
Italy
practises:
Latvia
• Net Area (Supeficie Util) –
This includes main usable Lithuania
space together with ancillary
space such as toilets and Luxembourg
kitchens and parking spaces.
• Gross Area (Superficie Netherlands

Service Charge: Building service de Transmisiones y Actos Construida) – This includes

charges are quoted in Euros per
square metre per month and are
paid monthly in advance along
with the rent.
Local Property Tax (Impuesto de
Bienes Immuebles): This tax is
assessed on a percentage of the
Norway
Juridicos Documentados the net area plus separating
(ITPAJD)): The purchaser of a walls, circulation space,
Poland
building will pay VAT of 16% (7% parking spaces and area used
on new construction) of the sales for technical uses and Portugal
price upon first sale of the elevators. This is the most
building. When the building is sold commonly used area Romania
again, if the seller is a legally calculation in leases.
registered company the tax will Russia

notional value of the building and be 16% of the sales price.

paid by the landlord on an annual
basis.
Serbia
Alternatively if it is a private
individual who sells the building
Slovakia
then they will be liable to pay tax
(ITP – Impuesto de Transmisiones Spain
Patrimoniales) at 7% of the
purchase price. Sweden

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

partitioning as a standard and reduced due to holidays. Spanish

Finland
such costs are borne by the summer holidays are typically
landlord. Upgrading space to full taken in August. There are also a
France
air conditioning is generally the number of public holidays during
responsibility of the incoming Easter in April/May, when many
Germany
tenant as only a top cooling/fan people will take holidays for a
pipe system is normally installed number of days. Greece
as standard in new buildings.
When vacating premises, the Hungary
tenant is responsible for
reinstating the space to the Ireland

condition it was in when they had

Italy
first occupied the space. Tenant
improvements that were
Latvia
undertaken during occupancy
belong to the landlord. Lithuania

Use of Space: Companies typically Luxembourg

occupy office space as open plan
space. The use and density of Netherlands

space must be planned in

Norway
accordance to the Ley de
Prevención de Riesgos Laborales,
Poland
which is administered by the
Labour Office. These guidelines Portugal
govern the distance from natural
light, position of a desk, position Romania
of a PC on the desk etc. and must
be taken into account when Russia

drafting a workspaces plan.

Serbia

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

Country Statistics Stockholm

France
Population (thousands) 9,081
Surface area (km²) 450,000
Germany
Density (per km²) 20
Local currency Swedish Krona Greece

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 309 318 316 299
GDP Annual % 4.5 2.7 -0.4 -5.5 Italy

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

Unemployment Rate % 7.0 6.1 6.2 9.3

Inflation Rate Annual % 1.4 2.2 3.5 -0.5
Lithuania

Average Real Wages Annual % 1.6 1.4 0.3 3.5

Luxembourg
GDP per head ($ at PPP) 34,902 36,338 36,770 34,770
Lending Interest Rate 4.3 5.2 4.3 2.2
Netherlands
Exchange Rate to US$ 7.3731 6.7553 6.5958 8.0286

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

four-year terms. Landvetter Airport (www.lfv.se/en/Airports/Goteborg)

Legal Structure
The Swedish legal system is a form of civil law but is
not codified like other countries. There are
significant influences from Germanic law and from
Common Law systems also with indigenous customs.
The Swedish judicial system is composed of three
levels of courts. All criminal and civil cases are
initially held in district courts; followed by a court of
appeals and finally the Supreme Court.
Finland
located 25 kilometres east of Gothernburg.
France
Aralanda airport is connected to Stocklhom by bus
and train service, Arlanda Express (www.
Germany
arlandaexpress.com). Both Stockholm and
Gotherburg have well developed public transport Greece
networks. Stockholm has a light rail and metro
systems as well as buses and is run by Hungary
Storstockholms Lokaltrafik AB, (Stockholm Public
Transport) (www.sl.se) on behalf of the council. Ireland

Gothenburg has a tram system plus light rail and is

Hours of Business
The main business hours are Monday to Friday
08.30am – 17:00pm.
Visas
Sweden is a member of the Schengen area
agreement. Holders of an EEA (EU Member States,
Iceland, Liechtenstein and Norway) or Swiss
Italy
run by Göteborgs Spårvägar AB (www.sparvagen.
goteborg.se) on behalf of by Västtrafik (www.
Latvia
vasttrafik.se/en) the regional transport organiser
who also provide timetable details. Lithuania
The rest of Sweden is well by extensive train service, Luxembourg
although the network is most dense in the south of
country. Flying is an effective means of transport to Netherlands

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

Typical Lease Terms
Legislation: Commercial lease
contracts in Sweden are governed
by the Real Property Code, which
Rent Escalation/Rent Review:
Rents are indexed annually to the
Consumer Prices Index but require
the lease terms to be at least 3
Czech Republic
Break Options and Terminations:
Break options are not common in Denmark
short term leases (3 – 5 years)
but do occur in longer term leases Estonia

stipulates mandatory regulations
for commercial leases. Swedish
lease contracts are short (2-4
pages) with appendices covering
details such as the indexation of
rent and service charges. The
association of property owners
have published standard
contracts for different types of
properties (hotels, shopping
centres, offices). It is not
years long. Rental escalations
typically are adjusted according
to the index each year in October.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit or a bank guarantee is
seldom required to complete the
(7 – 10 years). Tenants should be
Finland
aware that 9 – 12 months notice
has to be served if the tenant
France
wants to change terms or
terminate before the end of the
Germany
lease period. The most common
termination periods are March, Greece
September and December.
Hungary
Tenant and Landlord Obligations:
Tenants are responsible for all Ireland

compulsory to use the standard lease. internal repairs and maintenance,

contracts and any form of
contract is acceptable as long as
it corresponds to Swedish
legislation regarding commercial
properties. Most companies
utilise the standard leases but
have their own standard
appendices. As most companies
Rights of Renewal: The tenant
has a right of renewal, which is
governed by law. If the landlord
wants to terminate the lease
without a “passed” reason the
landlord has to pay damages to
the tenant. “Passed” reasons are
Italy
whilst landlords are responsible
for external repairs, maintenance
Latvia
and insurance. The extent of
tenant responsibility can vary and Lithuania
this is always negotiated when
signing a new lease. Luxembourg
Subletting: Generally subletting Netherlands

are familiar with the standard
leases the negotiation process
tends to be shorter than in many
other countries in Europe.
Lease Length: Typically
commercial leases are for terms
of 3 to 5 years. When signing
leases in new projects or when
reasons considered fair as is allowed, with the written
Norway
compared to normal market consent of the landlord, which is
conditions. If there is dispute not to be unreasonably withheld.
Poland
between the tenant and landlord
the tenant may request a Portugal
judgement from a rent tribunal
(Hyresnamnd) to determine if the Romania
reason given for termination is
fair. The decision is not legally Russia

renting larger spaces the lease binding but is normally agreed to

Serbia
lengths are normally for terms of by both parties.
7 – 10 years.
Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 127

United Kingdom
 Austria

Belgium

Bulgaria

Sweden Cyprus

Legal Environment Concerning
Brokerage Law
The Real Estate Brokers Law
1995:400, with subsequent
Local Property Tax: This is
normally paid by the tenant as a
share of total rents in the
property or as a share of total
Czech Republic
Property Transfer Tax (Stamp
Duty): When purchasing a Denmark
property, the purchaser is
responsible to pay stamp duty Estonia

amendments, governs brokerage
law in Sweden and requires
agents to be university educated,
objective, and licensed by
Fastighetsmaklarnamnden. The
law deals primarily with
residential transactions however,
where agents act for both buyer
and seller, and does not apply
directly to commercial real estate
transactions where both parties
leaseable area in the building.
Acquisition Costs
Typical acquisition costs that a
company will have to pay when
buying or leasing new premises
include:
Agents Fees
• Leasing – Fees are usually
10%-20% of the first years’ net
equal to 3% of the purchase price.
Finland
Value Added Tax: The current VAT
France
rate in Sweden is 25% and is
payable on all forms of
Germany
transactions including rent,
building service charge, agents Greece
fees, and notary costs.
Hungary
Other Taxes/Costs: When
purchasing a property, if the Ireland

typically instruct different agents.
As a result, there are a number of
commercial agents that do not
possess a license.
Occupancy Costs
The following charges are payable
by the tenant:
annual rent (dependant on the
size of the property and the
geographic region). Depending
on the structure of the
transaction, the fees will be
paid by either the tenant or
the landlord. When the fee is
paid by the tenant it is
normally set on an hourly
purchaser requires a mortgage
Italy
deed, a 2% mortgage deed tax is
payable (based upon the value of
Latvia
the deed).
Lithuania
General Market Practices
Basis of Measurement: The Luxembourg
Lettable Area is defined as the
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
a quarterly basis.
Service Charge: This is sometimes
quoted within the rental figure
and includes water, cleaning of
common areas and snow removal,
the seller of the property and
are negotiable dependant on
the value of property. Fees are
typically between 2-3% of the
agreed purchase price for
properties up to SEK 100
million.
projections. When there is a single
Poland
tenant building the normal
measurement is the Gross Portugal
Internal Area, which also includes
stairwells, lobbies, corridors, etc. Romania
Russia

but not electricity. Heating is not • Subletting – Fees are typically

included in the service charges
but is charged à conto.
Serbia
the same as leasing fees
above but in some instances
Slovakia
fees are paid as a percentage
of the savings realised. Spain

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

expect to provide partitioning and holidays, normally activity slows

air-cooling). When vacating
premises the tenant is responsible
for reinstating the space to the
condition that it was in when they
had originally occupied it. Many
leases state that normal wear and
tear does not have to be
reinstated.
Use of Space: The majority of
Finland
after mid-summer in June and is
closed during July. Activity does
France
not particularly start again until
the middle of August.
Germany
Acknowledgement Greece
We would like to thank Helén
Silverstolpe and Max Barclay of Hungary
Newsec Advice AB for their
assistance in the preparation of Ireland

offices built 1970 – 1980 are used this country review.

Italy
as cellular offices. Since the late
1990’s many of those buildings
Latvia
have been renovated and now are
open plan offices. Current demand Lithuania
is for open plan offices as
efficiency and cost per Luxembourg
workstation is further scrutinised.
Netherlands

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 275 284 289 278
GDP Annual % 3.4 3.3 1.6 -3.6 Italy

Net direct foreign investment (US$ millions) -41,898 -8,954 -21 927
Labour Force (millions) 3.9 4.0 4.1 4.1 Latvia

Unemployment Rate % 3.3 2.8 2.6 3.8

Inflation Rate Annual % 1.1 0.7 2.4 -0.7
Lithuania

Average Real Wages Annual % 0.1 0.8 -0.4 0.6

Luxembourg
GDP per head ($ at PPP) 37,834 40,305 41,270 39,810
Lending Interest Rate 3.0 3.1 3.3 2.9
Netherlands
Exchange Rate to US$ 1.2539 1.2004 1.0831 1.1375

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
Switzerland as such although the nearest equivalent
is the President of the Confederation. The Swiss
parliament is bicameral, consisting of the National
Council that represents the whole population and
the Council of States made up of members from the
cantons. Legislation can be enabled by both houses
and is not vetoed by the executive but may be
challenged by citizens. As such citizen led
referendums are important legislative feature of
Swiss democracy.
city and is the largest by volume of air travel.
Finland
Geneva Cointrin International Airport www.gva.ch
is located 5 kilometres north of Geneva and
France
EuroAirport Basel-Mulhouse-Freiburg
(www.euroairport.com) is located 8 kilometres
Germany
north west of Basel.
Greece
Switzerland has a very well developed public
transport network. Zurich canton is extremely well Hungary
connected with trains, buses, trams and boats that
are run by multiple operators under Zürich Transport Ireland

Network (www.zvv.ch/en) umbrella. Geneva’s public

Legal Structure
Switzerland’s legal system is based on civil law
system but is also influenced by local customs. The
judiciary operates at a commune, canton and federal
level, although principle administration of justice is
mainly a function of the canton.
Hours of Business
Italy
transport is operated by Transports Publics Genevois
(www.tpg.ch/fr).
Latvia
Given Switzerland’s position in the Alps and at the Lithuania
centre of Europe it has good international
connections, especially to France, Germany and Luxembourg
Italy. Swiss Federal Railways (www.sbb.ch/en) is the
state operator that runs the railway across Netherlands

The main business hours are Monday to Friday Switzerland.

Norway
08.30am – 12.00pm, 14.00pm – 17:00pm.
International Dialling Code
Poland
Visas The country code is + 41
Switzerland is not currently a member of the Portugal
Schengen area agreement though may join in 2009. Coordinated Universal Time (UTC) + 1 hour
Holders of an EEA (EU Member States, Iceland, Eastern Standard Time + 6 hours Romania
Liechtenstein and Norway) passport do not require a
visa. Nationals from Liechtenstein and the United Invest in Bureau Russia

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

Switzerland
Typical Lease Terms
Legislation: The law that governs
leases is based on the regulations
of the Codes des Obligations/
Obligationenrecht of 1911 as
modified on 15 December 1989
and subsequent amendments.
Lease Length: Typical leases in
Switzerland are for 5 years.
Rent Escalation/Rent Review:
Only in leases of 5 years or more
can the rent be adjusted annually
based on the Federal or Cantonal
Consumer Price Index as specified
in the lease. Leases of 3 or more
years can include fixed increases
at specified dates.
Guarantee and Security Deposit:
Landlords usually require
information from prospective
tenants such as banking details or
access to company information. A
deposit or bank guarantee of 3-6
months rent is generally required
when the lease is signed.
Rights of Renewal: On lease
expiry the lease will automatically
renew only if there is a right of
option. The renewal will be on the
same terms as the original lease
with the rent adjusted by the
Consumer Price Index (if allowed
by the original lease), unless
either the landlord or tenant
notify the other in writing within
the specified notice period. The
notice period is usually 6 or 12
months prior to the end of the
lease. It is possible to include a
clause that specifies that the
lease will automatically expire
unless notice to renew is given by
one party and accepted by the
other.
Break Options and Terminations:
For both the tenant and landlord
a break or early termination can
only be operated in accordance
with the negotiated terms of the
lease. The tenant does not have
the right to cancel the lease
before the break option dates
unless prior agreement from the
landlord has been obtained. If
granted, this may be subject to a
penalty, the amount of which will
depend on market conditions and
agreement between the specific
parties.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Tenant and Landlord Obligations:
Tenant obligations are internal Denmark
repair, maintenance and
insurance within their Estonia
accommodation while landlord
Finland
obligations are main structural
repairs, building insurance and to
France
keep the roof watertight. Land
taxes, maintenance and building
Germany
insurance is paid by the landlord,
but only maintenance (not plant Greece
renewals) and additional services,
such as security, central reception Hungary
are invoiced to the tenant.
Ireland
Subletting: According to
Italy
regulations of the Codes des
Obligations/Obligationsrecht, the
Latvia
tenant is permitted to sublet the
lease with written consent from Lithuania
the landlord. Any profit rent
premium must be offered to the Luxembourg
landlord.
Netherlands
Legal Environment Concerning
Norway
Brokerage Law
No specific qualifications are
Poland
required to be a property
consultant in Switzerland. Portugal
Brokerage Law is strictly
controlled by the Code des Romania
Obligations/Obligationenrecht. Any
introduction made by that agent, Russia
provided that it is first made by an
Serbia
agent and not another, that leads
to a successful transaction will
Slovakia
then result in an obligation by the
client to pay fees. Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 132
United Kingdom
 Austria

Belgium

Bulgaria

Switzerland Cyprus

Occupancy Costs Acquisition Costs
The following charges are payable Typical acquisition costs that a
by the tenant: company will have to pay when
buying or leasing new premises
Czech Republic
Property Transfer Tax: For the
purchase of a property, the Denmark
purchaser will be responsible for
registration cost and land Estonia

Rents: Rents are normally quoted
in Swiss Francs per square metre
per annum and are paid either
monthly or quarterly in advance.
Service Charge: Service charges
are quoted in Swiss Francs per
square metre per annum and are
paid with the rent either monthly
or quarterly in advance, based on
a provisional amount, which is
include:
Agents Fees
• Leasing – Fees are typically
10-15% of the first year’s net
rent. The fees are paid either
by the tenant or landlord
depending on the transaction.
Third party cost such as
brochures, advertising, direct
marketing, banners are
transfer taxes, notary fees, and
Finland
the other small expenses (stamps,
mortgage costs). The notary is in
France
charge of collecting these taxes.
These costs will vary from canton
Germany
to canton.
Greece
Value Added Tax: The current VAT
rate in Switzerland is 7.6 % and Hungary
payable on most forms of
commercial transaction including Ireland

then adjusted once the actual cost
is known at the end of the year.
Local Property Tax (Impôt
Foncier/Liegenschaftssteuer): This
tax is assessed on the basis of
rental value of the building, as
assessed by the Cantonal valuer,
using strict criteria laid down by
incorporated in this cost.
• Freehold – Fees are paid
either by the seller or the
buyer, depending on the
transaction, and negotiated
on a case-by-case basis
depending on the purchase
price. Fees are usually
between 3-5% of the agreed
service charges and agents fees
Italy
but is not paid on property
acquisitions or the tax charged
Latvia
thereon.
Lithuania
General Market Practices
Basis of Measurement: In Luxembourg
Switzerland, whilst general
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
not be passed on to the tenant.
10-15 % of the first year’s net variations from canton to canton.
Poland
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

scales” are published in each

Serbia
canton by the respective
property management agents
Slovakia
association.

Spain

Sweden

Switzerland

Turkey

Ukraine
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 Austria

Belgium

Bulgaria

Switzerland Cyprus

• Gross External (Surface Brute
Externe) – Gross areas
measured to the external face
of the external walls,
• Net (Surface Utile Nette) –
Net Lettable Areas. The net is
equal to the gross internal
after having deducted
Czech Republic
Use of Space: Companies occupy
office space usually as cellular Denmark
offices mixed with open spaces.
Estonia

including the shell of the staircases, lifts, vertical Holidays

building. Where a pitched roof
is constructed there may also
be a proportion of a
theoretical floor included,
depending upon the size and
pitch of the roof. It includes
basements and attic spaces,
whether they are fitted out or
not, balconies, loggias and
accessible roof verandas
ducts, corridors, toilets and
landings. Common areas such
as entrance halls or cafeteria
are added to the lease as a
proportion of the tenant’s
ease space of the total
building. In addition,
verandas, balconies and roof
terraces in the exclusive use
of a single tenant are also
Finland
There are 10 official national
holidays (including Easter and
France
Whit Sunday). In addition to
national holidays, or instead in
Germany
some instances, there are
cantonal holidays. For example Greece
the Canton of Geneva has Jeûne
Genevois that occurs on the Hungary
Thursday following the first
Sunday of September, and Ireland

(excluding street-level normally added back into the Restauration de la République on

verandas).
• Gross Internal (Surface Brute
Interne) – Net areas excluding
the shell of the building. The
gross internal takes into
account the bare exterior of
the walls and is equal to the
gross external after having
net area.
Fit Out/Reinstatement/
Dilapidations: Office buildings
are usually carpeted with
suspended ceilings and
mechanical and electrical
servicing. Lighting and wiring is
Italy
31 December that has replaced
Boxing Day. As a result of the
Latvia
school holiday timetable, business
can be affected during February Lithuania
and October when either one or a
two week break occurs, and in the Luxembourg
period from the beginning of July
to the end of August. Netherlands

deducted basements and attic usually done by tenant. Raised

spaces not fitted out for
residential or professional
activities (the attic spaces to
be deducted are considered to
be areas of which the ceiling
height is less than 1.50 m),
roof verandas, balconies,
loggias, and open areas
Norway
floors and cooling systems are
generally standard in new
Poland
buildings. In a tenants market the
landlord may assume the cost of Portugal
partitioning, or a part of the cost.
In a landlords market, these costs Romania
are usually borne by the tenant.
All works, decorations, Russia

located on the ground floor installation, additions, and

such as parking areas.
Serbia
furnishings that the tenant may
undertake on the premises during
Slovakia
the lease shall, at the end of the
lease or at the end of renewal, Spain
belong to the landlord, unless the
latter should demand the return Sweden
of the premises to their original
state. Switzerland

Turkey

Ukraine
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 Austria

Belgium

Bulgaria

turkey Ankara Cyprus

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 799 836 845 807
GDP Annual % 6.9 4.7 1.1 -4.5 Italy

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

Unemployment Rate % 9.8 9.9 10.7 14.5

Inflation Rate Annual % 9.6 8.8 10.4 6.2
Lithuania

Average Real Wages Annual % 0.5 1.3 -0.4 0.3

Luxembourg
GDP per head ($ at PPP) 11,710 12,460 12,730 12,100
Lending Interest Rate 28.0 27.0 26.5 23.0
Netherlands
Exchange Rate to US$ 1.4285 1.3029 1.3015 1.6243

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
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 Austria

Belgium

Bulgaria

Turkey Cyprus

Political Structure
Turkey is a republic with a president as head of state
who is elected by parliament to serve a 5 year term.
The Turkish parliament, the Grand National
Czech Republic
Istanbul’s public transport system consists of buses,
light rail and newly constructed tram and metro Denmark
system. Details for rail travel can be obtained from
Istanbul Public Transportation Company (www. Estonia

Assembly (Turkiye Buyuk Millet Meclisi), is istanbul-ulasim.com.tr/en). Other details can be

unicameral.
Legal Structure
Turkey’s legal system is based on civil law with
influence from various European countries. The court
system in Turkey is judges only. The lowest levels of
courts are the civil peace courts and the courts of
first instance. The criminal courts are the courts of
first instance and the central criminal courts. The
state security courts deal with organised crime and
Finland
obtained from the municipal transport authority of
Istanbul (www.iett.gov.tr/en/index.php). Anakara is
France
served by buses, light rail and a metro system run by
the Electricity, Gas, Bus General Directorate.
Germany
Most of Turkey’s major cities and towns are Greece
connected by rail services run by Turkish State
Railways (www.tcdd.gov.tr) who are currently in the Hungary
process of building a number of high speed links
between cities. Ireland

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

Airport (www.ataturkairport.com/eng) is located 24

Serbia
kilometres to the south west of the city centre, on
the European side of Istanbul. Esenboğa
Slovakia
International Airport (www.esenbogaairport.com) is
located 28 kilometres to the north west of Anakara Spain
city centre.
Sweden

Switzerland

Turkey

Ukraine
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 Austria

Belgium

Bulgaria

Turkey Cyprus

Typical Lease Terms
Legislation: The laws that
regulate commercial and
residential leases are Civil Code,
Rent Escalation/Rent Review:
Parties are free to pre-determine
annual indexation rate. For Turkish
Lira lease contracts, indexation is
Czech Republic
Break Options and Terminations:
For the tenant a break or early Denmark
termination can be operated in
accordance with the negotiated Estonia

Obligation Law, Condominium Law
and Law Numbered 6570
Governing Real Estate Leases.
General regulatory rules with
regard to validity of a lease
agreement arranged under
Turkish Civil Code numbered 4721
were changed in 2002. The
Turkish Law of Obligations” draft
statute comprises of significant
provisions on lease, has been
generally based on CPI.Foreign
currency payments may also be
subject to indexation, annually by
1-5 % or rates such as LIBOR or US
CPI. Rent review usually happens
at the end of rent term.
Guarantee and Security Deposit:
The amount of deposit money is
not restricted by legislation.
Parties negotiate the deposit
terms of the lease. If granted this
Finland
may be subject to a penalty, the
amount of which will depend on
France
market conditions and agreement
between the specific parties.
Germany
Tenants may not have their leases
ended by the landlord. Greece
Tenant and Landlord Obligations: Hungary
Tenant obligations are internal
repair, maintenance and Ireland

completed and has recently
adopted by parliament.
Lease Length: Most commercial
lease agreements in Turkey are
signed for a 5 year term. For
shopping centers, this term
normally increases to 7 years for
most tenants (but for small sized
amount, taking properties of
leased premises, as well as other
variables into consideration. The
procedure in practice equates to
1-3 months rent. Bank letters or
bills of guarantee may replace
cash deposits in more major
leases.
insurance within their
Italy
accommodation whilst landlord
obligations are main structural
Latvia
repairs and building insurance.
Property taxes are paid by the Lithuania
landlord.
Luxembourg
Subletting: Subject to the lease
terms, the tenant is only Netherlands

units usually 5 years) and
normally not be less than 10
years for anchor tenants.
Rights of Renewal: The option
to renew is usually for one or
more periods.
permitted to sublet the lease with
Norway
written consent from the
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
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 Austria

Belgium

Bulgaria

Turkey Cyprus

Legal Environment Concerning
Brokerage Law
No specific qualifications are
required to be a property
Local Property Tax: This tax is
assessed on the basis of values as
assessed by the Special Valuation
Committees every 4 years and
Czech Republic
• Purchasing – Fees are paid
either by the seller or the Denmark
buyer, depending on the
transaction, and negotiated Estonia

consultant in Turkey. Agents may
act as a representative of one
party or alternatively act as an
intermediary.
Previously signed contracts are
required for the agent to charge a
fee for the services provided. The
Turkish Law of Trade governs the
agents’ activities.
paid by the landlord. The property
tax is charged annually by
municipalities at 0.1–0.6% of value
depending on the nature of
property and is payable in two
instalments (31 May and 30
November). This cost may not be
passed on to the tenant. The
tenant normally pays a minimal
amount of environmental tax to
the local municipality.
on a case-by-case basis
Finland
depending on the purchase
price. Fees are usually
France
between 1.5–2% of the agreed
purchase price.
Germany
• Subletting – Same as leasing
Greece
Property Transfer Tax: The
acquisition of Turkish property is Hungary
subject to 1.5% transfer tax. The
same charge will be applicable, Ireland

Occupancy Costs when the property is sold.

The following charges are payable
by the tenant:
Rents: Rents are normally quoted
in Turkish Lira or in US$ per
square metre per month and are
paid either monthly or quarterly
in advance. There is greater
Withholding tax: Corporate
tenants are normally required to
pay withholding tax in the name
of the individual landlords. In the
case of corporate landlords,
tenants are required to pay VAT
instead of withholding tax. Such
VAT is normally recoverable by
Italy
Value Added Tax: The current VAT
Latvia
rate in Turkey is 18% and payable
on all forms of commercial Lithuania
transactions including rents,
service charges (if applicable), Luxembourg
and agents fees and property
acquisitions where the seller is a Netherlands

tendency towards charging in
Euros in recent years.
Service Charge: Service charges
are quoted in Turkish Lira per
square metre per annum and are
paid with the rent monthly in
advance, based on a provisional
amount, which is then adjusted
most corporate tenants.
Acquisition Costs
Typical acquisition costs that
a company will have to pay
when buying or leasing new
premises include:
Agents’ fees
company. The sale of residential
Norway
units of less than 150 square
metres is subject to VAT at 1%. VAT
Poland
paid for buildings and land may
be recoverable for corporate Portugal
buyers. VAT paid by individuals is
not recoverable. Romania
Russia

once the actual cost is known at
the end of the year. Service
charges are usually 10-15 % of
collected rent.
Fees are agreed beforehand and
Serbia
vary depending upon the
property, time of selling, level of
Slovakia
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
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United Kingdom
 Austria

Belgium

Bulgaria

Turkey Cyprus

General Market Practices
Basis of Measurement: In Turkey,
the following terms are commonly
used to define floor areas:
Czech Republic
works, decorations, installation,
additions, and furnishings that Denmark
the tenant may undertake on the
premises during the lease shall, Estonia

at the end of the lease or at the

• Gross External – Gross areas end of renewal, belong to the Finland

measured to the external face landlord, unless the latter should

of the external walls,
including the shell of the
building. This does not
normally include basements
and attic spaces, whether
they are fitted out or not, but
includes balconies.
France
demand the return of the
premises to their original state.
Germany
Movable furniture (desks, chairs)
may be removed by the tenant. Greece
Use of Space: Companies occupy Hungary
office space usually as cellular
offices mixed with open spaces. Ireland

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

suspended ceiling systems are

Norway
generally standard in a small
number of new buildings. All
Poland

Portugal

Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
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 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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 283 304 313 281
GDP Annual % 7.4 7.7 2.7 -10.0 Italy

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

Unemployment Rate % 2.7 2.3 3.0 4.5

Inflation Rate Annual % 9.1 12.8 25.2 16.5
Lithuania

Average Real Wages Annual % 18.5 15.0 6.8 -9.1

Luxembourg
GDP per head ($ at PPP) 6,280 6,980 7,370 6,700
Lending Interest Rate 15.2 13.9 17.5 17.3
Netherlands
Exchange Rate to US$ 5.0500 5.0500 5.2672 8.2167

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
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 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
(Verkhovna Rada).
Legal Structure
Ukraine’s legal system is based on civil law. The
court system of Ukraine has four levels and begins
with the courts of general jurisdiction that include
local courts and regional courts, regional appeal
courts, specialized high courts (the High Arbitration
Court and High Administration Court), and a Supreme
Court for final appeal.
the city by bus and metro. Within Kiev itself, most
Finland
public transportation is run by the state. The Metro
(www.metro.kiev.ua) [Ukrainian only] is run by the
France
city municipal company Kyivsky Metropoliten. The
other methods of public transport, buses,
Germany
trolleybuses, trams are operated by the
Kyivpastrans. Taxis are also an important means of Greece
transportation in Kiev. Other cities with metros
include Kharkiv and Dnipropetrovsk. Hungary
There are some suburban train links in Kiev run Ireland

by the state train company, Ukrzaliznytsia

Italy
Hours of Business (www.uz.gov.ua) [Ukrainian only]. The Ukrainian rail
The main business hours are Monday to Friday network links the major cities of the country with
Latvia
09:00am – 18.00pm. express links between Kiev and Kharkiv,
Dnipropetrovsk and Lviv. There is also an express Lithuania
Visas train to Moscow.
Holders of an EEA (EU Member States Iceland, Luxembourg
Liechtenstein and Norway) or Swiss passport do not International Dialling Code
require a visa. Nationals from EU-countries (except The country code is + 380 Netherlands

Republic of Bulgaria and Romania), as well as

Norway
Switzerland and Liechtenstein may also enter Coordinated Universal Time (UTC) + 2 hours
without a visa. Citizens of the United States of Eastern Standard Time + 7 hours
Poland
America do not require a visa for entry. A residence
permit is required if intending to stay for a period Invest in Bureau Portugal
exceeding 3 months. Ukraine is not a member of the Further information can be obtained from the Invest
Schengen area agreement. Ukraine bureau: Romania
www.investukraine.org
Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 141

United Kingdom

Ukraine
Typical Lease Terms
Legislation: The law that governs
leases is based on the Ukraine
Civil Code.
Lease Length: 3-5 years were
typical in Ukraine in 2008. Recent
years had seen an increase in
lease duration but the liquidity
crisis has changed this so that
tenants now prefer short-term
agreements of less than 3 years.
Rent Escalation/Rent Review:
The terms and type of indexation
are usually negotiable. The most
common indexation is 3 to 5% per
annum. In international projects,
the rent is adjusted annually
based on one of European or
American indices, but tenants try
to avoid the item in the
agreement.
Guarantee and Security Deposit:
Usually a deposit of 3 months
net rent is paid when the lease
is signed. Current financial
problems mean that tenants pay
for a deposit of 1 month or don’t
pay at all.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
Rights of Renewal: The length Occupancy Costs
and terms of options are subject The following charges are payable Denmark
to negotiation. by the tenant:
Estonia
Break Options and Terminations: Rents: Rents are quoted in US
Finland
Landlords may terminate the dollars per square metre per
lease if there is non payment of month or Euros per square metre
France
rent for three months. per month and are paid monthly
in advance. Quoting rents are
Germany
Tenant and Landlord Obligations: often given in hryvnias.
Tenants are obliged to deal with Greece
internal repairs whilst the Service Charge: Service charges
landlord is obligated to handle are quoted in US dollars per Hungary
main structural repairs. square metre per month or Euros
per square metre per month and Ireland
Subletting: The tenant is not are paid quarterly in advance.
Italy
permitted to sublet the premises
without written consent from the Acquisition Costs
Latvia
landlord. Unless otherwise Typical acquisition costs that a
specified in a lease agreement, company will have to pay when Lithuania
tenants are able to charge higher buying or leasing new premises
rents to subtenants then what include: Luxembourg
they pay to the landlord.
Agents Fees Netherlands
Legal Environment Concerning • Leasing – up to 8% of annual
Norway
Brokerage Law rent net of VAT
Agents are required to have • Freehold – 4-5% of the
Poland
specific qualification for carrying purchase price
out property valuation. Other real • Subletting – the same as Portugal
estate agent activities needn’t any leasing
licenses. Romania
Value Added Tax: The current VAT
rate in Ukraine is 20% and is Russia
payable on all forms of
Serbia
transactions including rent,
building service charge, agents
Slovakia
fees, notary costs and property
transfer tax. Spain
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

professional office buildings. reduced due to holidays. In

Fit Out/Reinstatement/
Dilapidations: New office spaces
are usually partially finished open
space (sometimes including
suspended ceiling with lighting
and carpeting on the floor). Air
conditioning is generally the
responsibility of the landlord. All
works, decorations, installation,
Finland
Ukraine there are a number of
public holidays from the
France
beginning to the middle of January
and also in early May. Besides, the
Germany
period from July until the end of
August is a peak holiday period. Greece
Acknowledgement Hungary
We would like to thank Elena
Galanova of ASTERA Group for Ireland

additions, and furnishings which assistance in the preparation of

Italy
the tenant may undertake on the this country review.
premises during the lease shall,
Latvia
at the end of the lease or at the
end of renewal, belong to the Lithuania
landlord.
Luxembourg
Use of Space: Companies occupy
office space usually as cellular Netherlands

offices mixed with open spaces.

Norway
The trend is that open spaces
become more attractive for
Poland
tenants. Cellular offices are
mainly occupied when small Portugal
spaces are required.
Romania

Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 143

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 Austria

Belgium

Bulgaria

United Kingdom Cyprus

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

Economic Indicators Hungary

2006 2007 2008 2009 Ireland

GDP (PPP US$ billions 2005 prices) 1,985 2,045 2,059 1,977
GDP Annual % 2.8 3.0 0.7 -4.0 Italy

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

Unemployment Rate % 5.4 5.3 5.6 8.1

Inflation Rate Annual % 2.3 2.3 3.6 1.5
Lithuania

Average Real Wages Annual % 1.7 1.5 0.1 -0.1

Luxembourg
GDP per head ($ at PPP) 33,809 35,028 35,787 34,290
Lending Interest Rate 5.0 5.5 2.0 0.5
Netherlands
Exchange Rate to US$ 0.5426 0.4996 0.5399 0.6550

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

United Kingdom Cyprus

Political Structure
The United Kingdom is a parliamentary monarchy.
The monarchy is head of state but executive power
lies with the elected government. The United
Czech Republic
require a visa. Nationals from Liechtenstein and the
United States of America do not require a visa for Denmark
entry. A residence permit is required if intending to
stay for a period exceeding 3 months. Estonia

Kingdom is a combination of 4 countries – England,

Wales and Scotland (Great Britain) and Northern
Ireland. The UK parliament in London legislates for
the entire country on most issues, but Scotland,
Wales and Northern Ireland now have some
governing powers over local policies like education
and health.
The UK parliament is bicameral and consists of a
lower chamber, the House of Commons that enact
legislation and an upper chamber, the House of
Finland
Transport
The key international airports for London are
France
Heathrow (www.heathrowairport.com), the largest
international airport hub in Europe, located 24
Germany
kilometres to the west of central London; Gatwick
(www.gatwickairport.com) located 45 kilometres to Greece
the south and Stansted located 48 kilometres to the
north. All are connected by high speed and Hungary
conventional train links to London.
Ireland

Lords, that reviews legislation.
Legal Structure
The United Kingdom’s legal system is based on
common law tradition with some civil law influences
(in Scotland). There is no single governing law in the
UK because it is a composite state. Separate legal
systems exist for Scotland, Northern Ireland and,
England and Wales. In England and Wales the court
London has an extensive underground metro system,
Italy
suburban rail and bus network that is mostly
operated under the direction of the transport
Latvia
authority, Transport for London (www.tfl.gov.uk).
Lithuania
UK cities are connected by rail network and the
larger cities have suburban rail connections. Luxembourg
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

Hours of Business Eastern Standard Time + 5 hours

Serbia
The main business hours are Monday to Friday
09:00am – 17:30pm. Invest in Bureau
Slovakia
Further information can be obtained from UK Trade
Visas and Investment bureau: Spain
The UK is not a member of the Schengen area www.ukinvest.gov.uk
agreement. Holders of an EEA (EU Member States, Sweden
Iceland, Liechtenstein and Norway) passport do not
Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 145

United Kingdom
 Austria

Belgium

Bulgaria

United Kingdom Cyprus

Typical Lease Terms
Legislation: The law that governs
leases is the Landlord and Tenant
Act 1954 together with various
Right of Renewal: Generally,
tenants have security of tenure by
law on expiry of the lease and can
apply for a new lease on similar
Czech Republic
Subletting: Generally subletting
is allowed with the written Denmark
consent of the landlord and
according to the detailed terms of Estonia

ancillary legislation.
Lease Length: 15 year or 10 year
leases are typical in England,
although 25 year leases that were
common until the early 90’s still
exist.
Rent Escalation/Rent Review:
Rent will be subject to upward
only review. This is usually every
terms. Both parties can agree to
contract out of this protection.
Break Options and Terminations:
Options are negotiable depending
on the quality of the space. Prime
new space will often only be
available on a 15 year lease
although a break at the 10th year
may be offered. In other instances
breaks at 5 year intervals can be
the lease. The tenant is normally
Finland
required to sublet at full market
rent even if this is higher than the
France
rent the tenant pays. Tenants may
be prevented from subletting
Germany
below the rent payable and such
clauses should be avoided when Greece
signing new leases. Tenants may
also assign or sell their lease to Hungary
another tenant. In this situation it
is important to avoid “Privity of Ireland

5 years but can be other patterns,
for example every 3 years, by
agreement. The new rent will be
agreed between the parties. If
agreement cannot be reached,
an arbitrator or independent
expert will be appointed to set
the new rent.
negotiated, but these may be Contract” where there is ongoing
Italy
subject to payment of penalties. obligation for payment of costs
should the purchaser of the lease
Latvia
Tenant and Landlord Obligations: enter into liquidation.
When the building is entirely Lithuania
occupied by one tenant, the tenant
will take on full repairing and Luxembourg
insuring obligations for the interior
and exterior of the building. In Netherlands

Guarantee and Security Deposit: multiple occupation buildings, the

Landlords usually require
information from prospective
tenants such as banking details or
access to company information.
Either a deposit of 3 months rent
or a bank guarantee are
necessary to complete the lease.
Norway
tenant’s obligations are internal
repair, maintenance and insurance
Poland
while landlord’s obligations are
external repairs, maintenance and Portugal
insurance. The landlord will
charge these costs to the tenant Romania
through a service charge.
Russia

Serbia

Slovakia

Spain

Sweden

Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 146

United Kingdom

United Kingdom
Legal Environment Concerning
Brokerage Law
Commercial agents do not need to
be registered to practice in the UK
although most are members of the
RICS (Royal Institution of Chartered
Surveyors). Brokerage in the UK is
governed by the Estate Agency Act
1979 and the Property
Misdescriptions Act 1991.
Brokers are normally appointed
by both sides (landlord and
tenant) in a transaction and each
side will pay their broker who will
generally act in an advisory
capacity. Fees will only be payable
by prior agreement and are only
enforceable by contract.
It is considered to be a conflict of
interest if the same broker
represents both the landlord and
the tenant. RICS regulations
require that both parties must be
notified if a conflict exists.
Occupancy Costs
The following charges are payable
by the tenant:
Rents: Rents are quoted in Pounds
Sterling per square foot per
annum and per square metre per
annum, and are paid quarterly in
advance. Quarter days are
different between England/Wales
and Scotland.
Austria
Belgium
Bulgaria
Cyprus
Czech Republic
England/Wales Acquisition Costs
25 March – Lady Day Typical acquisition costs that a Denmark
29 September – Michaelmas Day company will have to pay when
24 June – Midsummer Day buying or leasing new premises Estonia
25 December – Christmas Day include:
Finland
Scotland Agents Fees
France
2 February – Candlemas Day • Leasing – Fees are usually 10%
1 August – Lammas Day of the first year’s net rent. For
Germany
15 May – Whit-Sunday larger or higher value
11 November – Martinmas Day instructions this percentage Greece
can be reduced as
New Scottish Quarter appropriate. Hungary
28 February • Freehold – Fees are typically
28 August based on 1% of the purchase Ireland
28 May price. The percentage may be
Italy
28 November increased for small properties
or reduced for larger
Latvia
Service Charge: Building service instructions as appropriate.
charges are quoted in Pounds • Subletting – Same as leasing. Lithuania
Sterling per square foot per
annum and per square metre per Property Transfer Tax (Stamp Luxembourg
annum, and are paid quarterly in Duty Land Tax): For the purchase
advance with the rent. of a property, the purchaser is Netherlands
responsible for paying a property
Norway
Local Property Tax (Non- transfer tax of 4%, which is based
Domestic Business Rates): These upon the purchase price of the
Poland
taxes are assessed on a property. For a lease, the tenant is
percentage of the notional rental responsible for paying a tax of 1% Portugal
value of the space and paid of the value of the lease over the
directly by the tenant on a full term of the lease. Leases with Romania
monthly basis. They can equal up a value of less than £150,000 are
to 40% of the overall rental not required to pay this tax. Russia
obligation.
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
BNP par i b as rea l estate 147
United Kingdom
 Austria

Belgium

Bulgaria

United Kingdom Cyprus

Value Added Tax: The current VAT
rate in the UK is 17.5% (reduced to
15% until November 2009) and is
payable on rent, building service
Czech Republic
Fit Out/Reinstatement/ Holidays
Dilapidations: The landlord The only period in the year when Denmark
generally finishes new office holidays will affect the speed of
developments to a ‘Cat A’ projects will be the Christmas Estonia

charge, agents fees and legal
costs. It can be possible to elect to
not charge VAT on rent. This will
vary from property to property
and will depend on the legal
status of the landlord.
General Market Practices
Basis of Measurement: The RICS
Code of Measuring Practice
governs the measurement of
standard. Cat A will generally
include raised floors with floor
boxes, comfort cooling or air
conditioning, carpeting, ceilings
and lighting in place. The tenant’s
fit out is known as finishing the
building to ‘Cat B’. This will
include the provision of internal
partitioning, cabling, security and
facilities such as reception areas,
post rooms, kitchens plus an
period from mid December to
Finland
early January. August is also a
holiday period but offices remain
France
open and operational during this
time. There are also a number of
Germany
Public holidays that fall on
Monday; two are in May, one in Greece
August and the Friday and
Monday at Easter. Hungary
Ireland

buildings in the UK. This upgrading of the air conditioning.

document defines what should
and should not be included.
• Office Accommodation –
Measured on a Net Internal
Area (NIA). Very simply, this is
the “carpet area” and
excludes ancillary area such
Italy
When vacating premises, the
Latvia
tenant is responsible for
reinstating the space to the Lithuania
condition it was at the start of the
lease (known as “dilapidations”), Luxembourg
subject to fair wear and tear. The
tenant will have to remove all Netherlands

as toilets, staircases, improvements made to the

elevators, plant areas and
parking spaces.
• Industrial Accommodation –
Measured on a Gross Internal
Area (GIA). This includes
everything within the external
walls of the building.
Norway
property and reinstate to the Cat
A condition. If the tenants choose
Poland
not to do this work themselves, a
dilapidations estimate can be Portugal
agreed between building
surveyors acting for both sides. Romania
This will be the amount to be paid
by the tenant in lieu of the Russia

reinstatement works.
Serbia

Use of Space: Companies typically

Slovakia
occupy office space either as
cellular offices for one or two Spain
people but most often as open
plan space with a small number Sweden
of executive offices and meeting
rooms. Switzerland

Turkey

Ukraine
BNP par i b as rea l estate 148

United Kingdom
 Austria

Belgium

Bulgaria

Comparison of lease terms Cyprus

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
BNP par i b as rea l estate 150

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 Austria

Belgium

Bulgaria

Comparison of transaction costs Cyprus

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
BNP par i b as rea l estate 151

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 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
BNP par i b as rea l estate 152

United Kingdom
OWNED OFFICES Alliance OFFICES FOR MORE INFORMATION

ABU DHABI ALBANIA Tim Harlow

Senior Director – Client Solutions
BAHRAIN AUSTRIA
Tel: +44 (0) 20 7338 4155
BELGIUM BULGARIA Mobile: +44 (0) 7747 758 289
e-mail: tim.harlow@bnpparibas.com
DUBAI CANADA

FRANCE CYPRUS Elizabeth Wheeler

Senior Surveyor – Client Solutions
GERMANY GREECE
Tel: +44 (0) 20 7338 4491
INDIA JAPAN Mobile: +44 (0) 7825 114 778
e-mail: elizabeth.wheeler@bnpparibas.com
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