Brownfield Development—a Tremendous Opportunity for Municipalities
Regions in high demand for logistics facilities are often plagued by lack of available space, and many municipalities want to avoid earmarking greenfield sites for logistics development. This is where revitalizing brownfield sites comes into play. Brownfield development is a tremendous opportunity for both municipalities and Prologis. Unused properties are decontaminated and redeveloped, which usually involves expensive rehabilitation measures that previous owners often try to avoid. Prologis has both the expertise and the financial resources to develop brownfield sites.
In Pulheim, northwest of Cologne, and in Dortmund, Prologis had the opportunity to develop brownfield projects. In partnership with the German municipalities and business development agencies, Prologis acquired two properties in these prime locations. The 47,500 square meter site in Pulheim was used previously by an industrial company. In Dortmund, Prologis acquired 16 hectares of the former Westfalenhütte industrial site.
Revitalizing old industrial sites is a technically complex process and requires a significant investment of time and money, especially if the property is highly contaminated. Not every unused property is suitable for brownfield development. Prologis’ experience has shown that only two out of every 10 sites are ultimately suitable for revitalization.
Prologis has many years of international and local experience with complex brownfield projects. We have completed numerous brownfield developments successfully in Germany and worldwide, including projects at Prologis Fokker Logistics Park and Prologis Park Eindhoven, both in the Netherlands, and Prologis Park Moissy 2 in France. Before we acquire a property, we conduct extensive tests that include historical analysis and a soil survey.
Prologis acquired a brownfield site in Pulheim, located in the Cologne metropolitan area. Because of the location along the A1 highway and proximity to Belgium and the Netherlands, the site is particularly attractive for logistics service providers. The previous tenant had paved over the entire property with concrete, which made the revitalization process extremely complex. We cleared away the remaining structures, including the foundations and contaminated soil, and then began construction work on the new logistics building in December 2018.
In Dortmund, Prologis is using a 16-hectare site to make a lasting, positive contribution to the structural change taking place in the city. “The location boasts nearly 160 years of industrial history. By revitalizing the industrial brownfield site, we are ensuring that it will continue to be used for business activities, which is very important for the region. In addition, we are creating a new place for people to work,” says Philipp Feige, vice president, market officer Germany, Prologis. The industrial brownfield site is part of the former Westfalenhütte steel production facility and is particularly suitable for brownfield developments. By revitalizing the property, Prologis is helping create new jobs in the region.
The first step at the Dortmund site is to eliminate variations in the terrain that span up to 9 meters. Since mid-2018, approximately 3,000 tons of soil has been transported to the site every day to level the land, an amount equating to more than 2,100 mid-size cars. Lime will be added to the material onsite and used to pack down the substrate. This way, the ground will meet stringent stability requirements. The property will be transferred to Prologis in 2020.
“We intend to build a 90,000 square meter logistics park with three facilities on the site,” says Feige. “This is our largest brownfield development to date in Germany. We then want to lease the facilities to companies active in the logistics sector.”
Revitalizing the industrial sites in Pulheim and Dortmund will enable the land to be used in a new way, which will benefit the municipalities. Revitalization helps alleviate land shortages by not developing new land. In addition, contaminants are removed safely, which also benefits the environment. As a result, new jobs are created on sites that were unused for long periods of time. In the future, Prologis will continue to focus on the development of brownfield sites and work with municipalities as a qualified and financially sound partner.