Commercial property glossary

230a-business space

Other commercial space such as offices and warehouses, with limited eviction protection for the tenant.

290-business space

Retail and hospitality premises (SME business space) for which tenants enjoy statutory rent protection (often a lease term of 5+5 years).

Buying agent

Real estate agent who searches, evaluates, and negotiates the purchase of a property on behalf of the buyer.

Contract price

The fixed price a contractor charges for building or renovating according to agreed specifications.

Depreciation

Annual reduction in the value of a building (not the land) that can be entered as a cost for tax purposes, within the limits of the floor value (bodemwaarde).

Asbestos survey

Investigation into the presence of asbestos, mandatory before demolition or renovation of properties built before 1994.

BAG

Key Register of Addresses and Buildings: the official government registry of addresses, buildings, year of construction, and designated use.

GIY (gross initial yield)

The annual gross rental income divided by the purchase price including purchasing costs (k.k.), expressed as a percentage. A commonly used metric for comparing investment properties.

Industrial unit

Large, often high-ceilinged space for production, storage, or logistics, usually located on an industrial estate.

Commercial real estate agent

Agent specialised in the sale, purchase, and leasing of commercial real estate such as offices, shops, and industrial units.

Commercial property

Building intended for business use: office, shop, hospitality, workshop, warehouse, or a combination thereof.

Business space

Space within a building used for business purposes. For leasing, a distinction is made between 290-business space and other (230a) business space.

Industrial estate

Area designated in the environment plan (omgevingsplan) for business activities, often with environmental categories per plot.

Investment property

Property purchased to generate rental income and/or capital growth, usually let to one or more tenants.

Specifications

Technical description of how a construction project must be executed, including materials and requirements.

Zoning plan

Municipal plan establishing the permitted use and construction at a location. Under the Environment Act (Omgevingswet), this has been integrated into the environment plan (omgevingsplan).

Site preparation

Making land suitable for construction: demolition, remediation, levelling, and installing sewerage and construction roads.

Building entitlement

The legal right to realize a specific building volume on a plot, for example, a number of dwellings or square metres.

Building permit

Nowadays the 'environment permit for construction activity': permission from the municipality to build or renovate.

Gross Floor Area (GFA)

Total floor area of a building measured to the outside of the facades, including walls and plant rooms.

Commission

The fee a real estate agent receives, usually a percentage of the sale price.

Roof extension

Additional storey on an existing building, often used to create more lettable space or dwellings.

Due diligence

Thorough investigation by a buyer into the legal, technical, fiscal, and financial state of a property prior to purchase.

Energy performance certificate (EPC)

Label indicating the energy efficiency of a building (A++++ to G). Since 2023, offices must have at least label C.

Ground lease

Right to use land belonging to another party (often the municipality) in exchange for an annual ground rent (canon).

Exploitation

The management and leasing of real estate to generate income, including costs such as maintenance and management.

Operating budget

Calculation of expected income and expenses for a real estate project or investment property over several years.

Usable Area (UA)

Usable floor area within the walls according to NEN 2580, excluding load-bearing walls and shafts.

Mixed-use

Property with multiple functions, for example, a shop on the ground floor and dwellings above.

Land development calculation

Calculation of costs and revenues for developing land into building-ready plots.

Land quote

The portion of the total real estate value attributed to the land.

Repurposing

Giving a building a new function, such as converting a vacant office into residential units.

Joint and several liability

Situation where multiple parties can each be held liable for the full amount, for example, in a joint lease agreement.

Hospitality property

Property equipped and intended for hospitality use such as a restaurant, café, or hotel.

Rent protection

Legal rules protecting tenants against excessive rents, especially for residential property and 290-business space.

Rental value

The rent a property can reasonably achieve on the open market.

Indexation

Annual adjustment of the rent, usually based on the consumer price index (CPI).

Land Registry

Government agency (Kadaster) that registers ownership, mortgages, and parcel boundaries of real estate.

Cadastral map

Map showing parcel boundaries and parcel numbers, managed by the Land Registry.

Room rental

Leasing individual rooms within one dwelling to multiple tenants, often students, with shared facilities.

HMO property

Dwelling equipped and licensed for the rental of multiple rooms.

Room rental permit

Municipal permit (conversion or withdrawal permit) required to rent out a dwelling in rooms.

Office building

Building intended for office activities.

Plot

Demarcated piece of land sold or issued for construction.

Chain covenant

Agreement in the deed that must be passed on to the new owner at each subsequent sale.

Purchase agreement

Written agreement in which the buyer and seller record the price, conditions, and completion date.

Purchaser's costs (k.k.)

The buyer pays the additional costs such as transfer tax and notary fees on top of the purchase price.

Vacancy

Situation where a property is (partially) not let or used.

Vacant possession value

Value of a property if it is delivered free of tenants and use.

Completion

Legal transfer of ownership via a notarial deed that is registered in the Land Registry.

Market-standard rent

Rental price that is in line with what comparable properties in the same area achieve.

Market value

The estimated amount for which a property would exchange on the valuation date between a willing buyer and seller.

Environmental category

Classification of business activities by nuisance (odour, noise, danger) which determines where a company may establish itself.

Multiplier (capitalisation factor)

Purchase price divided by the annual rent. A factor of 12 means the price is twelve times the annual rent.

NIY (net initial yield)

Yield after deduction of operating costs, divided by the purchase price including additional costs.

NEN 2580

Dutch standard for measuring surfaces and volumes of buildings.

Notarial deed

Official document prepared by a notary, such as the deed of transfer (akte van levering) during the sale of a property.

Environment plan

Municipal plan under the Environment Act (Omgevingswet) containing all rules for the physical environment, replacing zoning plans.

Environment permit

A single permit for activities such as building, demolition, or deviating from the environment plan.

Environment Act

Act that, as of 1 January 2024, consolidates the rules for spatial planning, construction, environment, and nature.

Maintenance plan (MJOP)

Multi-year maintenance plan with expected maintenance work and costs for the coming years.

Property tax (OZB)

Annual municipal tax for owners (and for non-residential, also users) of real estate, based on the WOZ value.

Resolutive condition

Condition in the purchase agreement that allows the sale to be cancelled, for example, if financing or a permit is not obtained.

Cash buyer

Party that buys properties directly and for their own account, often quickly and without an agent.

Right of superficies

Right to own buildings or plantings in, on, or above the land of another party.

Transfer tax

Tax on the purchase of real estate. For non-residential properties, a rate of 10.4% applies in 2026.

Parcel

Piece of land with its own cadastral number.

Property developer

Party that initiates, finances, and realizes real estate projects, from land acquisition to completion.

Right of first refusal

Agreement where a party (e.g. the tenant) has the first right to buy the property if the owner wishes to sell.

Yield

Return on an investment in relation to the initial investment, expressed as a percentage.

Renovation

Major refurbishment of a building to bring it up to modern technical and functional standards.

Sale-and-leaseback

Structure in which an entrepreneur sells their property and immediately leases it back, releasing capital without moving.

Splitting (strata title)

Legally dividing a building into separate sellable apartment rights via a deed of division.

Student property

Property equipped for the rental of rooms or studios to students.

Valuation

Determination of a property's value by a certified valuer, often recorded in a valuation report.

Transformation

Conversion of a building to another function, such as office to residential.

Turnkey

Delivered completely ready for use, so the user can start immediately.

Lettable Floor Area (LFA)

The part of the floor area for which rent is paid, measured according to NEN 2580.

Tenanted property

Property subject to an ongoing lease agreement. 'Sale does not break lease': the tenant remains after the sale.

Ready for sale

A property that is legally, technically, and documentarily ready to be sold.

Municipal right of first refusal

Right of the municipality to be offered land first when the owner wishes to sell.

Deposit

Security that the buyer (usually 10% of the purchase price) deposits with the notary, or that a tenant pays to the landlord.

Retail property

Property with a retail function, often on the ground floor in a shopping street or centre.

WOZ value

Value determined annually by the municipality based on the Valuation of Immovable Property Act, used for property tax and other taxes.

Sitting tenant

Tenant who remains in the property upon sale. This affects the value and the type of buyer.

Zoning plan

Plan determining which functions or sectors are permitted in specific parts of an area.

Base rent

Rental price excluding service charges and VAT.