Behind the Big Box: understanding the planning-development dialectic of large distribution centres in Europe

ABSTRACT

In Europe, very large distribution centres (XXL DCs) are increasingly appearing on planning agendas due to their growing spatial footprint and environmental impacts. Although the emergence of XXL DCs has gained traction in academic research, empirical knowledge about the process that leads to their oft-debated location choice, geometry and landscape integration is still scarce. This paper aims to improve our understanding of this process, analysing the decisions of key stakeholders in the planning-development dialectic behind four exemplary XXL DC transactions, in the Netherlands. Our analyses shed light on the motivations of public and private actors as well as the (lack of) planning rules that shape these transactions. We find that specific incentives in the Dutch decentralized planning and legal-financial system contribute to logistics sprawl. Existing planning instruments that could steer logistics developments, such as environmental and employment quality regulations, are largely left unused. Our study suggests that multilevel planning competencies and international market standards are important variables in explaining XXL DC outcomes. Unlike often assumed in the literature, internationalization has – next to stimulating the growth of XXL DCs – contributed to more sustainable location choices and landscape integration.

KEYWORDS:

• Distribution centre
• logistics
• spatial development
• governance
• spatial planning

Acknowledgements

The authors thank Christian Heerings, Hanneke Bruinsma and Erik Harting for their crucial introductions. And the (other) interviewees: commercial director Greenport Venlo Development Company, economic policy advisor Roosendaal, planning strategist Limburg, planning strategist Horst aan de Maas, logistics developers VGP Benelux, logistics development consultant Stec Group, director logistics real estate DSV, head strategic tenant relations logistics Deka Immobilien, international partner / head of industrial and logistics Netherlands Cushman & Wakefield, director of Holland International Distribution Council. We appreciate the valuable advice and information from BREEAM NL, REWIN, Buck Consultants International, Bouwinvest, LCB, Noord-Brabant, Ministries of Infrastructure and Water as well as Internal Affairs, Studio Marco Vermeulen, DPD, CTP and CBRE. Contacts are available via the authors. We also thank the reviewers who have helped to improve the structure of the paper considerably.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Research data

Nefs, Merten (2021): Distribution Center Development Cases Venlo and Roosendaal. 4TU.ResearchData. Dataset. DOI:10.4121/14717058

Nefs, Merten (2022): Dutch Distribution Centres 2021 Geodata. 4TU.ResearchData. Dataset. DOI:10.4121/19361018

Notes

1 Numbers and mapping from the open access research dataset DOI:10.4121/19361018

2 E.g. in the Netherlands: Oost NL, REWIN, Ontwikkelmaatschappij Midden-Limburg and Midpoint Brabant.

3 Dutch logistics lobby is performed by Transport & Logistiek Nederland (TLN) and Evo-fenedex, joined in the Logistiek Alliantie. The sector is promoted abroad by the Netherlands International Distribution Council.

4 Logistics real estate in Dutch provinces Noord-Brabant and Limburg is currently financed for 95% by foreign investors, while 75% of the buildings have a lease shorter than 5 years, and 50% are leased to logistics service providers with frequently changing client portfolios (Bak 2021).

5 Developers active in Europe have portfolios including millions of sqm in logistic space and land banks of hundreds of hectares (https://www.prologis.nl/over-ons, https://heylenwarehouses.com, https://www.vgpparks.eu/nl/properties/). Dutch logistics real estate development profits are comparable per sqm to the London office market (Trappenburg in Financieel Dagblad, 2019).

6 Logistics development in the US has recently shifted to smaller DCs near consumers in (sub)urban sites. This trend has only recently begun in Europe.

7 Spatial quality plans explained on https://iplo.nl/thema/ruimtelijke-ontwikkelingen/bijzondere-onderwerpen/beeldkwaliteitsplan/. The only two Logistics developments with a Q-team are the ones near the airports of Schiphol and Eindhoven.

8 Repository DOI:10.4121/14717058

9 MS Teams and Amberscript

10 See repository

11 https://www.maastrichtuniversity.nl/research/food-claims-centre-venlo

12 Described in the regional and co-municipal visions, masterplan and landscape plan (Greenport Venlo & Studio Marco Vermeulen 2009; BRO 2010; Heusschen Copier 2010; Venlo 2012; Limburg Province 2014).

13 Described in masterplan, landscape plan and the national Greenports implementation (Government of the Netherlands 2010).

14 In 2021, a large agro-logistics company was landed in Trade Port Noord. Similar to the fashion DCs, the agro-logistic company's arrival was criticized in local politics for the dependence on migrant workers.

15 DSV is present in Venlo since around 1900, in the form of transport company Frans Maas, acquired by DSV in 2006.

16 Described in the land-use and spatial quality plans (Roosendaal 2012; Dhondt 2013; Roosendaal & Halderberge 2013; Halderberge 2017).

17 https://www.logisticscapitalpartners.com/Case-studies/Primark.htm

18 In our interviews as well as newspapers: https://www.ad.nl/binnenland/hoe-ze-roosendaal-tegenwoordig-noemen-dozendaal~a7f73b05/

19 The Greenport Venlo Development Company, although owned 100% by local governments, is not subject to the Public Administration Transparency Act (WOB).

20 In 2020, a typical DC of 100.000 sqm in the Netherlands has a land and construction cost of around 100 million, and a real estate value of 150 million on the balance sheet.

21 Dutch VAT legislation allows for an attractive delay for re-export and e-commerce: tax is not due until goods are exported from the warehouse. In contrast with Belgium, Dutch DCs can operate 24/7.

22 Recently, large logistics developments on brownfield sites have also been criticized, for competing over industrial land with small local companies.

23 Especially closed-end fund investors (not registered at the stock market) have a strong influence on DC location choice. They prefer larger clusters in the East-Southeast corridor of the Netherlands, within reach of 150 million consumers in a 500 km radius.

24 Sometimes as their personal opinion rather than an official company statement.