André Banschus, Executive Director
For most companies, real estate is a critical factor for success and an essential part of corporate strategy.
However, it also brings with it a range of challenges, principally tying up considerable capital that would perhaps be better spent on core business. At the same time, many businesses are affected by a shortage of space, especially in urban areas.
Today, only a few companies have their own reserves that could be freed up for expansion or modernisation.
At the same time the shortage of suitable land zoned for commercial or industrial use is extreme. For some, with flexibility, creativity – or both – it’s possible to relocate to new facilities close to an original base, but for others their existing location means that a new building or expansion in close proximity to the existing company headquarters is an unfulfillable wish.
In these circumstances, looking further afield can be very successful, and will be increasingly common. DeLaval, the world’s leading supplier of products for the dairy industry, spent years looking for a site at its traditional headquarters in Hamburg for its new European distribution centre. The solution was to move to Gallin, 60 km east of Hamburg but in order to retain its own skilled workforce – DeLaval employs a total of 190 people at the site – the design of the building focused on their wellbeing. So in addition to the distribution centre and storage areas, a prestigious office building was developed, with communal areas including a dining facility offering freshly cooked food served free of charge, sports and yoga rooms and a creative space where people can read or meet colleagues to exchange ideas without mobile phones or laptops.
But who, if not the companies themselves, finances such specialised real estate? Developers are not the only people assisting in this area, but institutional real estate investors are going further and increasingly seeing the advantages of acting as both funders and owners. With long-term leases, cash flow is secured. In addition, the more specialist the building, the higher the user’s own investment given that fit-out can be just as expensive as the property itself. This financial commitment gives the investor additional security.
Nevertheless, the third-party usability of the property is vital. Thanks to clever planning and modern construction technology, however, even production properties specifically designed to meet the needs of heavy industry can be designed to be versatile. For example, Verdion has developed a production facility for Materion in Alzenau where melting furnaces for precious metals, cranes for transporting metal carriers and complex exhaust air systems are all essential. However, the entire facility is designed in such a way that the building can readily be used as a logistics site at a later date. The hall is already fully pre-equipped with dock doors, and possible future loading yards are currently being used as parking lots – all without restricting current requirements.
Actually developing this type of real estate requires more than just technical expertise and forethought, however. To be truly successful, it also needs a translator, someone who can transfer the company’s needs – what is required, what is desired – into the building plan of the property via an extended process flow.
The key, as we have seen, is to think differently, with clever and flexible solutions that truly understand and reflect each company’s operations and focus on a seamless process – from location and staffing choices, through to financing, delivery and occupation.