(January 2010) Causes of Decline of Industrial Estates

Causes of Decline of Industrial Estates image
Urban areas face the process of decline. There are however large differences in the pace in which this process takes place. A special type of urban area that experiences negative externalities that come with urban decline is the industrial estate. Literature on urban decline and regeneration of housing and inner city areas is extensive (e.g. Roberts and Sykes; 2000) the decline of industrial estates has to the best of my knowledge not been researched much. This paper tries to contribute to filling this gap in urban literature. The causes and effects of urban decline and regeneration are much debated (ibid.) and although there are differences between the processes of decline in housing and inner city areas on the one hand and industrial estates on the other hand, there are also similarities. The physical effects of decline are but one of these. The main research objective of this research is to gain insight into the differences of decline between industrial estates. In practice, some industrial estates decline over much shorter periods of time then others. The relation between different regional and site-specific characteristics and decline of industrial estates will be empirically tested. Special attention is given to the relation between investment decisions and decline of industrial estates.

A quantitative indicator for decline of industrial estates will be used to measure decline and make it possible to compare between industrial estates. The development of property value will serve as the key indicator for decline. Existing studies on the valuation of industrial property and determinants of local business rents (e.g. Hennberry et al.; 2005) will be used to set a conceptual framework with explanatory variables. One of the explanatory variables is the investment decisions of property owners. Investment has long been an important policy measure to stop the negative effects of urban area decline, following the principle of property-led urban regeneration (Healey 1991). The role of investments and other possible explanatory variables in the process of decline are hypothesized and will be analysed by performing multiple regression analysis.

Industrial estates in the Netherlands will serve as a case study in this paper.


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