Industrial Property Markets in Western Europe

R.H. Williams, B. Wood

• Publisher: Taylor & Francis
• Year: 2006
• ISBN:
  9781135829582
• Edition: 1
• Topic: Arquitectura
• Subtopic: Planificación urbana y paisajismo

An important reference book both now and post 1992. It gives a clear introduction to the industrial property market in Europe and provides the information needed to understand each country's system of planning and property development.

1: INTRODUCTION

Barry Wood and Richard Williams

The prospect of the arrival of the Single European Market (SEM) at the end of 1992, and the need to think ‘European’ and to operate professionally throughout the SEM, have motivated the preparation of this book. It attempts to adopt the perspective of ‘l’Europe mon pays’, and to help readers take the first steps towards acquiring a level of knowledge of other countries in Europe equivalent to the knowledge that any professional in the field of real estate and planning would take for granted in their own country. Our objective is to provide real estate, planning and property professionals with an introductory guide, assisting them to start the process of learning how to operate in the property market in major countries within western Europe other than their own.

This chapter explains the scope of the book, outlines its rationale, and sets out the definitions, parameters and editorial principles which have been adopted. The second chapter explores at greater length the issues and assumptions on which these are based. Subsequent chapters are devoted to individual countries; each chapter is written by academic experts working in the country concerned. The final chapter draws the threads together, identifies common themes, comparisons and contrasts, and draws general conclusions.

All countries in Europe have some form of spatial or land use planning, allocating land uses and forming the basis for decisions on whether to authorize development. All the countries considered are advanced industrialized economies, and most have considerable pressure on their urban land available for development. All have substantial areas of land allocated and developed for industrial land and premises. Similarities end as soon as one moves beyond this very broad level of generalization. The principles of the various planning systems vary greatly, as is evident from studies of the various urban and regional planning systems which have taken a European perspective, such as Williams (1984) and Davies et al. (1989). The legal basis and formal procedures for the authorization of development similarly vary widely (Garner and Gravells, 1987).

When attention is focused on the property markets in different sectors, an even more bewildering complexity soon becomes apparent. Furthermore, although there is now a reasonably wide selection of material available on the different planning regimes in western Europe, there is less available on land and property markets. A valuable overview of all 12 EC member states has been prepared by Edward Erdman (1990), and Hallett (1988) offers a critical comparative analysis, from a cross-national perspective, of land policy and the residential property sector.

In spite of the complications and impediments represented by this complexity, which in EC single-market terms constitute substantial nontariff barriers, the real estate industry (including many UK-based firms of chartered surveyors) has been among those responding energetically to the prospect of the SEM. Several larger UK-based firms have, for example, established a network of offices in the major cities of other member states, or formed partnerships with firms from other countries. Real estate and property firms from other countries are of course also interested in doing likewise.

What can a book such as this offer? In spite of the well-established Europeanization of the property industry and professions referred to above, there is a lack of textbook material, or indeed of any readily available reading matter, that provides introductory guidance to the system in other countries in a balanced way on which a deeper knowledge can be built with further reading. Much of the existing knowledge is held in the heads of the professionals operating in European firms, or is scattered in sources that are hard to identify from outside a country. New educational programmes are being developed to respond to this situation, including those referred to in the Preface to this book. Such courses are, however, quite new, and lack the textbook and literature infrastructure which support older-established teaching programmes.

With this book, we are taking the first step towards remedying this situation. Why Europe? This is clear from the above discussion. Why industry? This may be less so. The reason is that wealth creation through industry remains the lifeblood of the west European economy, yet there is less material on real estate development in this sector than there is on the retail, office and housing sectors. Consequently the gap to be filled is greater. The objective of this book, therefore, is to meet the need for the textbook identified above, to provide initial guidance to the respective national industrial property markets, to explain the terminology in the countries concerned, and their major planning, regulatory and financial controls, to explore the extent to which there is a true market, to describe the various actors (professional, political, commercial etc.) and operators in the industrial development process, and to provide a basis for further reading.

The focus is primarily on the processes of land use planning and authorization of development; on the terminology, concepts, rules and regulations of property and tenure; and on the operation of the market and the role of the actors or participants in the process. However, although detailed information on financial and tax issues would be of wide interest, such information becomes out of date so rapidly that it is inappropriate for a book such as this to attempt to provide it.

The scope of planning is understood to be, for the purposes of this book, the process of managing and regulating the use of land, space or territory by public authorities at the regional, urban or local scale in accordance with established policies or plans indicating the manner in which land should be used and urban and regional development carried out. Planning also includes the process of authorization of development and the use of land.

Planning is notorious for the extent to which its terminology is country-specific, reflecting the particular national planning culture to which it relates (Cropper, 1986; Williams, 1989). For present purposes, it is taken to include all aspects of spatial planning (aménagement, Raumordnung, urbanisme etc) relevant to the operations of the individual property markets, the allocation of areas of industrial land use, and the authorization of industrial development.

Industrial property is defined in functional terms, to include all property capable of being traded or transferred from one occupier or industrial process to another. In principle, therefore, it refers to general-purpose industrial sheds capable of accommodating a wide range of manufacturing (metal bashing, food processing, clothing for example) plus storage, warehousing and stockholding. Excluded from the scope of this definition are specialist industrial plant and structures such as oil refineries, chemical plants, and steel mills. Although plant and structures such as these may be bought and sold, there is no real general market in such property.

The type of general-purpose industrial premises on which this book is concentrating is not necessarily, of course, exclusively occupied by industrial users in the strict sense. The borderline between industrial and retail, or between industrial and commercial or service sector occupiers, is often difficult to draw. Where it is drawn, in land-use planning regulations for example, the definitions and categories, and indeed the true meaning of the vocabulary used, tend to differ between country and country. Therefore, an inclusionary approach has been adopted here. What is important is the type of building rather than the precise definition of the sector of the occupier, because the focus of attention is the market in this particular form of real property. The projects described in the various national contributions and the case studies presented as illustrations demonstrate the variety of interpretations of what constitutes industrial property of the sort considered here, and the variety of uses acceptable in such premises in the different countries discussed.

In selecting countries for inclusion, and in inviting contributions, the main aim was to include a representative sample of countries from the different parts of Western Europe, including all the major investment markets. In general, and in keeping with the SEM orientation referred to above, the selection has been from European Community countries. Sweden is the exception to this, but it is a major west European economy and an important member of the European Free Trade Association (EFTA). Furthermore, it is likely to become more closely associated with the EC during the 1990s, either as a result of negotiating to join, or as a result of an association between EFTA and the EC to extend the SEM in the form of a wider European Economic Area. A secondary consideration in the selection of countries, referred to in the Preface, is the link with the network of university teaching programmes in European real estate, property development and planning within the PRODEST consortium, and the need for textbook material for such programmes.

The issue of language is referred to frequently in the text. It is an issue which must always be confronted. The rationale for writing in English is explained in the Preface, and is clear enough. It is sometimes felt by members of the real estate profession and others, especially in Britain, that because textbook material such as this is published in English with the acquiescence of fellow professionals in other European countries, all communications can take place in English without risk of misunderstanding. The editors do not share this view. Many terms which are precisely understood in the professional context of one country are not capable of exact translation, and therefore may become ambiguous in a cross-national context. Terms in real estate and planning reflect the culture and practice of these activities in each country. If translated into English and back into the original language, they could be mistranslated, with loss of precision. For these reasons, international or Euro-neutral terminology is used where appropriate. The term ‘Euroenglish’ is sometimes used for the latter (Williams, 1989), to refer to the situation where English words are used to convey non-British concepts: thus, for example, ‘spatial planning’ instead of ‘town and country planning’; ‘real estate firms’ instead of ‘chartered surveyors’. Also, wherever desirable, the correct term in the respective national language is given in the text which follows.

REFERENCES AND FURTHER READING

Cropper, S. (1989) ‘Do you know what I mean? Problems in the methodology of cross-cultural comparison’, in Masser and Williams (Eds), Learning from Other Countries: the cross-national dimension of urban and regional policy-making (eds Masser and Williams), Geobooks, Norwich.

Davies, H.W. E. et al. (1989) Planning Control in Western Europe, HMSO, London.

Edward Erdman (1990) Property, Mercury Books, London, in association with the CBI Initiative 1992.

Garner, J.P. and Gravells, N.P. (eds) (1986) Planning Law in Western Europe, 2nd edn, Elsevier, Amsterdam.

Hallett, G. (1988) Land and Housing Policy in Europe and USA, Routledge, London.

Williams, R.H. (ed) (1984) Planning in Europe: Urban and regional planning in the EEC, George Allen & Unwin, London.

Williams, R.H. (1989) ‘Are we speaking the same language? The vocabulary of planning in languages close to English’, Paper to Conference of the Association of European Schools of Planning, Tours.

---

Note. Throughout milliard=US billion.

2: KEY ISSUES AND THEMES

Barry Wood and Richard Williams

2.1: GOVERNMENT AND PLANNING CONTEXT

Authorization of the use of land for development or economic activity normally needs to be sought from the appropriate public authorities. In all European countries industrial property development is only acceptable when subject to such authorization. In general, authorization is granted on the basis of conformity to some form of development plan or spatial planning policy. We need therefore to understand the concepts of authorization of development, of development plan and spatial policy formulation, and of the relationship between these two.

The normal model is an overall strategic policy framework, within which regional and local or municipal authorities prepare their own development plans and policies. Within areas designated for development, local and detailed site-specific plans are formulated and approved as a basis for authorizing development. In general, the legal basis for authorizing development is that if the proposal falls within the location and physical form specified in this detailed plan, it can, or must, be authorized. Very often, this detailed local plan is a mandatory element of the planning system, and authorization cannot proceed without such a plan having been legally adopted. Such plans are commonly referred to as binding plans. A legally binding form of plan is the normal basis of the planning system in most European countries, the main exceptions being the UK and Ireland.

The above model implies a strongly developed policy context at the regional and local scale, plus a deterministic relationship between the most detailed level of plan and the legal and administrative process of authorizing development. Indeed, the process of authorizing development in this model is sometimes seen to be purely an administrative process.

This very simplified basic model clearly does not apply equally to all countries being considered, but it will serve as a starting point from which certain key issues can be identified: issues which represent or indicate important differences in the ways in which different planning and authorization procedures operate, and their underlying assumptions and context. These issues include:

1. the spatial scale at which planning policy is formulated;
2. discretion on the part of the municipal planning authorities to decide whether or not to authorize development which does not fall exactly within the development indicated in the local site-specific development plan;
3. flexibility and certainty and whether the overall planning and development process is plan-led or market-led; and
4. the extent to which planning practice is characterized by negotiation prior to the formalization of any legally binding plan or other procedure for the authorization of development.

Flexibility on the part of the planning authorities to deviate from their previously existing planning policies in response to changing market conditions without going through highly structured legal procedures is often seen as the antithesis of certainty for the developer who expects to be able to know what form of development is acceptable and likely to receive authorization. The Dutch constitutional doctrine of Rechtstaat, whereby the citizen is entitled to legal certainty, is reflected here and in the basic model of the planning authorization process outlined above.

From these general issues, we move on to questions of the form of development plan, zoning, allocation of land uses, authorization and the control of development; and of the relationship between the planning system and the development process, including that of ‘planning gain’, ‘developer obligations’ or ‘exaction’ of a public good such as public infrastructure or amenity from the developer as part of an agreement by the public authority to authorize the development. For an extended discussion of this theme see Alterman (1988).

A final set of issues in the planning framework is the European Community context. European environmental legislation and the operation of the structural funds to promote development are important considerations to which attention is drawn by contributors wherever appropriate. A bigger underlying question is that of non-tariff barriers and impediments due to the variety of regulations, procedures and practices and professional roles in the real estate, planning and development processes in the different countries. The issue of harmonization of planning and development procedures, in order to facilitate the creation of the single market, has been raised in some countries.

2.2: SPATIAL SCALES OF PLANNING AND THE CONTROL OF DEVELOPMENT

The spatial scale at which planning policy is formulated varies considerably, as does the range of levels of government with planning responsibilities. Consequently, the locus of the political debate associated with spatial policy-making is found in a wide variety of circumstances, although it is invariably true that considerable political dispute surrounds planning decisions.

Whenever one is looking at spatial scales, however, it is always impor tant to distinguish between a formal or legal requirement to prepare plans at a certain level in the national hierarchy of government (national, regional, provincial, conurbation authority etc.) and the existence of an actual plan or planning policy at that level. It is also necessary to distinguish between those plans which are mandatory in the sense that they must legally be prepared, or because the process of authorization of development cannot proceed legally without them, and those plans which are purely policy guidance, and where the appropriate authority may have legal discretion over whether to prepare such a plan.

To some extent there is a spatial policy context at the EC level. The structural funds, of which the most significant for industrial property is the European Regional Development Fund, have clearly defined areas of benefit, and the Regional Policy Directorate (DGXVI) is formulating a spatial policy framework for the Community, under the title ‘Europe 2000’ (Commission, 1991). Meanwhile, the Environment Directorate (DGXI) has issued the ‘Green Book’ on the urban environment (Commission, 1990) which seeks to promote sound environmental planning principles for urban development including, of course, industrial development throughout the EC.

Some countries h...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• CONTRIBUTORS
• ACKNOWLEDGEMENTS
• PREFACE
• 1: INTRODUCTION
• 2: KEY ISSUES AND THEMES
• 3: GERMANY
• 4: SPAIN
• 5: FRANCE
• 6: ITALY
• 7: THE NETHERLANDS
• 8: SWEDEN
• 9: THE UNITED KINGDOM
• 10: SOME COMPARISONS AND CONTRASTS