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The Dutch Land Market: A Regional Tool for Policy Impact on Vacancy and Grant Rates
European Real Estate Society Conference 2014
27th Jun 2014
Brano Glumac, PhD
/ Department of the Built Environment
Land acquirement by municipalities
• Municipality is an active stakeholder
• Due to economic conditions land demand declined
• Depreciate the industrial land value• in 2014 losses have risen 4-6 billion• competition for attracting companies
• Mismatch in supply and demand → ABM
Page 2
/ Department of the Built Environment
Land market imperfections
• Location and allocation• Land is traded infrequently• High transaction costs• Difficult to determine accurate price
• Integrating: urban policy, population growth dynamics, land-use change prediction
• ABM supports: policy makers, urban planners, urban developers
Page 3
/ Department of the Built Environment
ABM as an industrial land use policy tool
Page 4
• Model matches existing supply with predicted demand
• Supply: existing industrial and business parks• Demand:
• Demand model per industry sector• Location choice based on companies’ preferences
• Data:• Employment per sector; sector specific area demand• Industry location (future also), location
characteristics, company register, GIS
/ Department of the Built Environment
ABM as an industrial land use policy tool
Page 5
/ Department of the Built Environment
ABM: General demand model
• BLM model estimates spatial demand (SD)• Employment indicators (E)• Terrain quotient (TQ)• Location type preference (LTP)
• Company growth with Monte Carlo• Growth per individual company• Fitting of the current accommodation• Newcomers
Page 6
/ Department of the Built Environment
ABM: Location specific model
• Attributes
Page 7
Attributes Levels
Minimally built percentage 0-50%; 51-65%; 66-100%
Maximally built percentage 0-80%; 81-90% 91-100%
Environmental category 1-3; 4-6
View location Yes; No
Terrain type Mixed-use; High-end-use
Park management Yes; No
Parking possibilities Sufficient; Insufficient
Highway accessibility 0-0.5km ; 0.5-1km ; 1-2,5km; > 2,5km
Distance to city centre 0-2km; 2-5km; >5km
Accessibility public transport 0-200m; >200m
Distance to airport 0-2km; >2km
Distance to living area 0-200m; >200m
Clustering of companies Above 2x average; Below
Land price 0-140€; 141-170€; >170€
/ Department of the Built Environment
ABM: Location specific model
• Bayesian Classifier Naïve Network
Page 8
ABM: Financial feasibility
/ Department of the Built Environment Page 9
• Investments vs benefits• more space, moving closer to…
• Cost estimates for 3 actions: relocate, refurbish, built on new location
Model Validation
/ Department of the Built Environment Page 10
• Procedure
• Validation methods & outcomes
Model Validation method Outcome Acceptance
BLM Correlation 0,87 > 0,80
BCN Hit rate test 0,2978 > 0,0678 (entropy)
ABM Correlation
Hit rate test
0,95
0,60
> 0,80
> 0,50
Case Study
/ Department of the Built Environment Page 11
• Region of Eindhoven:• 4 municipalities• 330000 habitants• 190000 jobs• 53 business parks• 1300h business land
• 180h LID• 4 large projects LNID
Municipality tests Status Quo Scenario
/ Department of the Built Environment Page 12
• Scenarios vs 4 indicators:
Municipality tests Scenarios
/ Department of the Built Environment Page 13
Scenario Mean Land Grants 2012-2020
Mean Vacancy
Mean Compaction
Status Quo 56 ha. out of 237 ha.
9,9% 16%
Discount 60 ha. out of 237 ha.
10,0% 8%
Competition 56 ha. out of 237 ha.
9,9% 16%
No introduction of LNID
56 ha. out of 187 ha.
9,9% 16%
Restricted municipal land grants
37 ha. out of 97 ha.
8,2% 23%
Municipality tests Scenarios
/ Department of the Built Environment Page 14
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Status Quo Competition
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Status Quo No introduction of LNID
Lan
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• ABM has been developed
• Scenarios are tested
To Conclude
/ Department of the Built Environment Page 15
