The price of office space per square meter varies greatly in the Netherlands, depending on location, quality and amenities. In large cities you pay considerably more than in smaller municipalities, with price differences that can reach hundreds of euros per square meter. This investment requires careful consideration of several factors, from financing options to additional costs and the number of square meters needed per employee.
What is the average cost of office space per m2 in the Netherlands?
The cost of office space per m2 in the Netherlands varies widely, with location is the main price-determining factor. In prime locations within major cities, prices are highest, while in suburbs and smaller towns, you'll find considerably cheaper prices.
Amsterdam takes the crown when it comes to expensive office space. In the center and on the Zuidas you will find the highest square meter prices in the country. Utrecht follows as the second most expensive city, especially around central station and in the new Papendorp office area. Rotterdam has more variation in prices, with the center and Kop van Zuid as the most expensive areas.
The Hague positions itself between Rotterdam and Utrecht, with the government quarter and the central station area as price stoppers. In Eindhoven, known for its technology sector, you see higher prices especially around High Tech Campus and Strijp-S. Smaller cities such as Groningen, Tilburg and Arnhem offer significantly lower prices, often up to half of what you pay in Amsterdam.
Price differences between regions have several causes. Scarcity plays a major role, as does the presence of international companies and accessibility by public transportation. In areas with a lot of new construction or renovation, prices tend to be higher due to modern amenities and energy efficiency. Proximity to amenities such as restaurants, stores and sports facilities also drives up prices.
What factors determine the price of office space per m2?
The price of office space is determined by a combination of factors that combine to shape the final square footage price. Accessibility tops the list, with offices near train stations and highways having higher prices.
The condition of the property greatly affects the price. Newly constructed or recently renovated properties are more expensive than older buildings. The energy label plays an increasingly important role here. Buildings with an A-label are not only more expensive to purchase, but they do save you in the long run through lower energy costs. More and more companies are consciously choosing sustainable office space because of their social responsibility.
Amenities in and around the building help determine the price. Consider:
- Parking lots (especially valuable in city centers)
- Reception and security
- Meeting rooms and flex workspaces
- Hospitality in the building
- Bicycle storage and showers
- Electric car charging stations
Market conditions also play a role. During times of economic growth, prices rise, while they fall during recessions. Demand for office space in specific sectors can cause price fluctuations locally. For example, you often see higher prices in technology hubs due to high demand from startups and scale-ups.
What is the difference between buying and renting office space?
The choice between buying and renting office space depends on your financial situation, growth expectations and need for flexibility. Buying offers security and wealth accumulation, while renting brings flexibility and lower initial costs.
When buying office space, you become the owner of the property. This means you have complete control over how you furnish and use the space. You build up equity and benefit from any appreciation in value. Monthly mortgage payments are often comparable to or lower than rental rates, especially with today's low interest rates. As the owner, however, you are responsible for all maintenance, from minor to major.
Renting offers more flexibility. You can move relatively easily if your business grows or shrinks. The landlord is usually responsible for major maintenance, which saves you time and worry. You don't need a large initial investment, which frees up capital for your core business. The downside is that you don't build up capital and are dependent on the vagaries of the rental market.
Financially, buying is often more advantageous in the long run. After paying off the mortgage, you only have maintenance and energy costs. With renting, you always keep paying. For companies looking to stay in the same location for at least 10-15 years, buying is usually the better option. For fast-growing companies or organizations in change, renting is often a better fit.
For those who appreciate the flexibility of renting but are still looking for professional workspace, offers Rent office space in Amsterdam interesting opportunities in the form of flexible workplaces.
How much office space do you need per employee?
To calculate required office space per employee, we use different guidelines, depending on the type of work and office concept. On average, we calculate 10-15 m2 per person, including common areas and facilities.
The traditional cubicle office requires the most space: about 15-20 m2 per employee. This includes a private office or fixed workstation plus some of the common areas. In a modern open-plan office, you end up with 8-12 m2 per person. In the new way of working with flexible workstations, you can reduce this further to 6-10 m2 because not everyone is present at the same time.
For a realistic calculation, use this formula:
- Number of workstations = number of employees x attendance factor (usually 0.7-0.9)
- Workstation space = number of workstations x 6-8 m2
- Meeting rooms = 2-3 m2 per employee
- General areas (canteen, toilets, corridors) = 3-4 m2 per employee
- Total = sum of all spaces
Modern work concepts such as activity-based working require a different approach. Here you create different zones for different activities: quiet workspaces, collaboration areas, call boxes and informal meeting areas. This can reduce space requirements while increasing functionality.
What additional costs should you count when buying office space?
In addition to the purchase price, several additional costs look when buying office space. These can amount to 10-15% of the purchase price, so realistic budgeting is important.
The transfer tax is 8% of the purchase price for commercial real estate. This is a significant cost that you must pay immediately upon purchase. Notary fees for the transfer vary but are usually between several thousand euros. The broker's commission, if you use a buying agent, is often 1-2% of the purchase price.
For financing, you need an appraisal report. The cost of this depends on the size and complexity of the property. You should also take into account costs for the mortgage deed and any advisory costs for financing. Building inspections are wise to detect hidden defects.
After the purchase comes the remodeling costs. Even with a property in good condition, you'll probably want to make changes to your corporate identity and methods. Consider:
- Modification of layout and wall systems
- ICT infrastructure and cabling
- Climate control and lighting
- Flooring and upholstery
- Kitchen and plumbing
- Signage and signing
Ongoing costs include maintenance (count on 1-2% of the purchase value per year), insurance, property taxes and service charges for common parts in the case of a CoE.
How do you finance the purchase of office space?
Various options exist for financing office space. A business mortgage is the most common form, where banks usually finance 60-70% of the market value. You have to contribute the rest from your own resources.
Banks have strict requirements for commercial real estate financing. They look at the financial health of your business, usually at least three years of financial statements. The relationship between rental or use value and financing must be right. The quality and location of the property also play a role. A good business plan with realistic projections is indispensable.
Alternative forms of financing are gaining ground:
- Crowdfunding for real estate, where multiple investors jointly finance the property
- Vendor lease, where the vendor temporarily leases back
- Sale-and-leaseback structures for liquidity
- Private equity firms that co-invest
- Combinations of bank and alternative financing
Interest rates for commercial real estate are higher than for residential mortgages. The term is often shorter, usually 10-20 years. Many business owners choose an annuity loan for the security of equal monthly payments. Repayment-free portions are possible but are viewed more critically by lenders.
What are the advantages of buying office space versus flexible workplaces?
The trade-off between buying your own office space and flexible workplaces depends heavily on your business situation. Owning your own real estate offers stability and asset accumulation, while flexible workplaces offer scalability and low entry costs.
Having your own office space gives you complete control over your work environment. You can set up the premises exactly according to your needs and corporate culture. In the long run, it is often cheaper than renting or flex spaces. You build equity and benefit from capital appreciation. For companies with stable staff numbers and a fixed location requirement, this is often the best choice.
Flexible workstations offer maximum agility. You can scale up or down per month, ideal for growing companies or project teams. All facilities are readily available: internet, meeting rooms, coffee and often even reception services. You have no worries about maintenance or cleaning. The networking function of shared workspaces can be valuable for startups and freelancers.
Financially, the options vary widely:
- Buy: high initial investment, low monthly costs over time
- Flex spaces: no investment, higher monthly cost per sq. ft.
- Break-even is often around 5-7 years, depending on location and prices
- Flex spaces remain more advantageous with varying space requirements
For companies that want to combine the benefits of both, there is the option of buying a basic office and using flex spaces for peak times or project teams.
How do you calculate returns on office real estate?
There are several ways to calculate the return on office property. The gross initial yield (BAR) is the annual rental income divided by the total investment, expressed as a percentage.
For the net return, subtract all expenses from the rental income. This gives a more realistic picture of your actual return. Costs to deduct are maintenance, insurance, property taxes, management fees and vacancy risk. The net return is usually 1-3% lower than the gross return.
A practical calculation example for an office building:
- Purchase price including costs: €1,000,000
- Annual rental income: €80,000
- Gross efficiency: 8%
- Annual cost: €20,000
- Net efficiency: 6%
In addition to direct returns, there are indirect returns through appreciation in value. Office properties in good locations increase in value by an average of 2-4% per year. This is in addition to your direct return. There are also tax advantages such as depreciation on the building (not the land) and deductible expenses.
For your own use, you calculate the return differently. You compare the total cost of ownership (interest, depreciation, maintenance) to what you would otherwise pay in rent. You also have to include the opportunity cost of the equity invested. Often the return on own use is higher than renting because you have no vacancy risk and are the tenant yourself.
Conclusion: Is buying office space the right choice for your business?
Buying office space is an important decision that requires careful consideration of several factors. For companies with a stable outlook for the future and sufficient financial resources, it can be an excellent investment.
Key considerations at a glance:
- Financial strength: minimum 30-40% equity required
- Time horizon: wanting to stay in the same location for at least 10-15 years
- Growth expectations: stable workforce or predictable growth
- Location needs: certainty about the right place for your business
- Risk appetite: comfort with property risks and market fluctuations
For companies that are still developing or value flexibility over security, there are alternatives. Flexible workplaces offer the opportunity to work professionally without large investments. At Co-Office, for example, you'll find inspiring workspaces that grow with your business, complete with all the amenities you need.
Whether you choose to buy, rent or flexible solutions, the most important thing is that your workspace fits your business goals and culture. Take the time to explore all options and get sound advice. For businesses that want to experience the flexibility of professional workspaces without purchasing real estate directly, we invite you to contact contact us. We are happy to think with you about the best solution for your situation.