much like a study paper, which fails to address the
problems of implementation. The Board is
particularly critical of the use of a system of location
categories, which while having the same nomen
clature as the standard A-B-C system adopted by
realty brokers throughout the world, has completely
different definitions.
A further difficulty that the Board foresees is
that insufficient emphasis has been placed on colla
boration between national government, municipal
corporations and industry. Businesses will only be
prepared to invest if they are confident that the
necessary improvements to the infrastructure will be
forthcoming. For instance, doubts have already been
expressed about the speed with which public
transportation systems will be upgraded. For their
part, the municipal corporations are known to be
reluctant to make firm commitments without having
received financial guarantees from national
government.
The fact that business needs have not been
assessed before developing a policy on business
locations is also seen as a serious shortcoming. The
Board is of the opinion that demand for Category B
locations - which could have access to the highway
network and hence will not be wholly dependent
on public transportation systems - will be extremely
strong. Firms in the commercial services sector can
be expected to have a marked preference for such
sites. The requirement to have good access both by
public transportation systems and by road is
particularly important in the Dutch context because
of the geographical spread in business locations. This
is far less of an issue in leading business centers
abroad because companies tend to be concentrated
in specific areas.
One aspect of the government’s plan to
restrict automobile use, which has already come in
for heavy criticism from certain sectors of the realty
industry, concerns the new guidelines on parking.
The NEPR.OM organization, which represents the
majority of property developers in the Netherlands,
has let it be known that it considers the new
parking ratio introduced by the government -
which specifies a limit of one parking space for
every 250 square meters of gross floor area - to be
far too strict. This view is backed up by the
experience gained to date in those cities where the
new standards are already in force. NEPROM
forecasts that the new guidelines on parking will
lead to a dramatic fall in new construction as
investors see the viability of development projects
being undermined. The Board of FGH BANK is
aware of the difficulties the new parking standards
are causing and feels that the parking issue should
have only been addressed after public transportation
facilities had been substantially improved.
The importance that the government attaches
to environmental matters is clear from its attempts
to restrict automobile use for travel to and from
work. Whilst the Board feels that such sentiments
should be applauded, it has a number of reservations
about the impact of general environmental policy
on the realty market. In the fight of the Dutch
Supreme Court’s failure to apply the principle of
“the polluter pays” in all but one recent case,
property owners and land owners are unsure as to
the extent of their legal obligations in respect of soil
pollution and clean-up measures. The worry is that
the government might now attempt to recover the
costs of such operations by other means. It is
essential that the government clarifies its position on
such matters in the near future.
In reviewing the near-term outlook for the
commercial realty market in the Netherlands, it
is necessary to discuss the various sectors individual
ly. In the office sector, the worrying oversupply of
space at what in standard real estate terminology
would be referred to as B and C locations is tending
REPORT OF THE EXECUTIVE BOARD