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Doing business in the Netherlands 143. Finding anoffice location3.1 The Dutch office marketThe office market in the Netherlandsis decentralized, which results in eachcity having a more or less specific officemarket. Amsterdam (approx. 6.6 million sq.m.office stock) focuses on finance and internationaltrade, The Hague (approx. 4.1 million sq.m.) isthe national administration centre where the governmentand public departments are the main users ofthe local office buildings. Rotterdam (approx. 3.4 millionsq.m.) has one of the largest ports in the world, asa result of which the office market has a traditionalfocus on insurance and trade. Utrecht (approx. 2.6 millionsq.m.) is located in the heart of the country with afocus on transport and domestic commercial services.In Eindhoven (approx. 1.4 million sq.m.) andArnhem (approx. 1.1 million sq.m.) occupiers of officespace have strong ties with electronics, chemicals andenergy supply.although this has also changed over the past 10years as a result of sale-and-lease back transactions.Leasing has advantages, such as a positive impact onthe company’s cash flow, flexibility, the possibility ofoff-balance presentation and negotiation on incentiveswith landlords. Lease contracts can be subjectto VAT; which may result in VAT savings in specificsituations. Depreciation is an important considerationwith respect to the ownership of real estate. Since thebeginning of 2007, the tax depreciation on real estateis limited, both for BVs and for IB entrepreneurs (naturalpersons). Depreciation for tax purposes is exclusivelypermitted where and in as far as the book valueof the building exceeds the so-called base value. Thelevel of the base value depends on the intended useof the building.LocationPrime rent (Jan. 2014) Euro/sq.m./yrAmsterdam - Zuidas 370Amsterdam - Central 270Amsterdam - South-East 195Rotterdam 180The Hague 175Utrecht 195Eindhoven 1203.2 Town planningThe Netherlands has applied strict regulations withrespect to the development of offices, retail, industrialand residential schemes since 1950. The municipalsystem of zoning plans determines in detail whatcan and cannot be built. In general, developers areonly granted building permits if their plans fit in withthe zoning plans or if an exemption has been granted.The zoning plans also apply to all redevelopmentprojects. It is therefore not easy to change the use ofthe building without the cooperation of the localauthorities. Municipal approval is mandatory withrespect to zoning plan changes. Procedures forobtaining permits are scheduled according to stricttimetables. It can take several years to obtainapproval for complex building plans in which publicauthorities have a dominant role.3.3 Lease or buyThe general practice in the Netherlands is to leaseoffice space: approx. 65% of all office buildings areowned by investors. Owner-occupier situations aremore common in the industrial real estate market,