The low availability of commercial space is putting companies in the Netherlands under pressure. This is mainly affecting small and medium-sized businesses. They benefit from efficient and sustainable commercial space so they can continue to guarantee sustainable business operations. A more efficient design and use of empty space on industrial estates can provide opportunities when new developments are limited, and can even offer a more sustainable solution.

Vacancy of commercial properties is still extremely low in the Netherlands. Various sources recently reported that the total supply of commercial space has decreased to approximately 3% of the total stock. The problem becomes even bigger for commercial space located on industrial estates. Here vacancy has dipped below 2%. As expansion of industrial estates is becoming more and more difficult, it would be a good idea to examine the current design of industrial estates.

Inefficient use of space in the G5

When looking strictly at developed plots, we observe that a lot of usable space can be created. On average, 56.9% of the developed plots on industrial estates in the G5 (Amsterdam, Rotterdam, The Hague, Utrecht and Eindhoven) are in use. Of course it is unrealistic to expect 100% use of the available space on industrial estates. After all, space is also needed for infrastructure, parking spaces and recreational purposes. As a rule of thumb, it can be assumed that a developed area of at least 60% would be efficient.

Figure 1: Average use of space per developed plot in the G5. Source: Savills Data, Intelligence & Strategy, 2023

The average use of space per plot appears to differ greatly between the G5 municipalities. This has to do with the nature of the business operations on individual industrial estates. Rotterdam, for example, has a relatively low use of space per plot. After all, commercial space in Rotterdam is focused to a large extent on transhipment, storage and transport of goods that arrive at the Port of Rotterdam. These types of operations require large outdoor spaces and benefit less from high densities.

What can be done differently?

By means of a scenario analysis, Savills has determined how much space can still be created in the G5. What if all the developed plots that are now in use for less than 60% were designed more efficiently and at least 60% could be used? The analysis did not include the port areas, because these are less suitable for dense development. It turns out that there is at least 7,000,000 sq m GFA available for commercial space in the G5. This is estimated to be 30% of the total stock in the G5.

Figure 2. Available sq m of GFA to be created per municipality in the G5. Source: Savills Data, Intelligence & Strategy, 2023

Identification and Renovation

There is potential for achieving considerable space savings on existing industrial estates. Spatial analyses can help in the identification of plots that are currently not used as efficiently as possible. For example, plots can be identified where the developed area per plot is lower than 60%. To promote a sustainable use of space, consideration should then be made as to whether or not it would be profitable to renovate current buildings or whether it would be advisable to demolish current properties and replace them with new-builds.

It goes without saying that the Dutch physical living environment is overwhelmed. Smarter thinking about current developed areas is a step in the right direction of relieving some pressure, which not only has advantages for the Dutch economy but also comes with fewer negative consequences for the environment.