The Dutch Land Market: A Regional Tool for Policy Impact on Vacancy and Grant Rates European Real Estate Society Conference th 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 1

/ 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 2

/ Department of the Built Environment ABM as an industrial land use policy tool Page 3 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 4

/ 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 5

/ Department of the Built Environment ABM: Location specific model Attributes Page 6 AttributesLevels Minimally built percentage0-50%; 51-65%; % Maximally built percentage0-80%; 81-90% % Environmental category1-3; 4-6 View locationYes; No Terrain typeMixed-use; High-end-use Park managementYes; No Parking possibilitiesSufficient; Insufficient Highway accessibility0-0.5km ; 0.5-1km ; 1-2,5km; > 2,5km Distance to city centre0-2km; 2-5km; >5km Accessibility public transport0-200m; >200m Distance to airport0-2km; >2km Distance to living area0-200m; >200m Clustering of companiesAbove 2x average; Below Land price0-140€; €; >170€

/ Department of the Built Environment ABM: Location specific model Bayesian Classifier Naïve Network Page 7

ABM: Financial feasibility / Department of the Built Environment Page 8 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 9 Procedure Validation methods & outcomes ModelValidation methodOutcomeAcceptance BLMCorrelation0,87> 0,80 BCNHit rate test0,2978> 0,0678 (entropy) ABMCorrelation Hit rate test 0,95 0,60 > 0,80 > 0,50

Case Study / Department of the Built Environment Page 10 Region of Eindhoven: 4 municipalities habitants jobs 53 business parks 1300h business land 180h LID 4 large projects LNID

Municipality tests Status Quo Scenario / Department of the Built Environment Page 11

Scenarios vs 4 indicators: Municipality tests Scenarios / Department of the Built Environment Page 12 Scenario Mean Land Grants 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 13

ABM has been developed Scenarios are tested To Conclude / Department of the Built Environment Page 14

Thanks! / Department of the Built Environment Page 15