Navigating France’s complex development landscape: An opportunity to lead the way on sustainable practices
For several months now, the European logistics property sector has been under pressure. The explosion in construction costs, the sharp fall in property capitalisation rates and increasing development constraints in response to global climate agreements have had a major impact on the market in every country in Europe. Although all markets are facing difficult times, France presents one of Europe’s most challenging development markets for logistics property (with figures from November showing that take-up is down by around 40% and investment volumes down by around 65%).? This is due to a combination of scarcity of land and some of the most stringent planning and environmental laws in Europe.
At Scannell Properties in France, we have therefore adapted our development strategy. Almost 80% of our projects in France are now built on brownfield sites or involve the redevelopment of existing buildings. Our short-term ambition is to carry out 100% of our developments in France using this more sustainable model. To achieve this goal, we have chosen to develop projects that meet the highest technical and environmental standards without destroying greenfield land. Our projects this year are proof of this.
In Conflans-Sainte-Honorine, in the Yvelines department, we are developing a 10,000 m2 logistics platform on a brownfield site located in a constrained and congested urban area. The building, which embodies our expertise in land optimisation through an innovative architectural design on a triangular plot, will be handed over in Q3 2024.
Another way in which we are adapting our approach is to actively seek out retrofit projects; extending the lifespan of existing buildings and reducing their operational carbon footprint. In March we acquired three existing platforms in northern France operated by the Lidl retail chain. Once the buildings are vacated in 2024, major refurbishment work and improvements to energy performance will be carried out.? The works planned include the refurbishment of roofs, provision for photovoltaic installations and building management systems as well as modernisation of heating and lighting throughout. These buildings are being actively marketed, and the level of interest from future tenants at this early stage, shows there is demand for these projects because they offer more certain and sustainable space than greenfield developments.
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We look forward to continuing our efforts towards meeting our new objectives as we identify new and innovative ways to release much needed space to the market. We are currently working on a new acquisition of an existing building and on the redevelopment of a brownfield site in eastern France, where the pressure on land is high and the vacancy rate remains low. The administrative and technical constraints involved in redeveloping brownfield sites are significant (business transfer process, pollution clean-up) and it can therefore be difficult to resolve the economic equation between the seller of the land and the future tenant.? At present, however, we believe this is the most practical, environmentally-friendly and timely way to develop to ensure that the French logistics industry has access to the type of modern and sustainable warehousing that it desperately needs.
Although the situation in France is complex we are committed to finding solutions for our clients and see this as an opportunity to test new, more considerate and sustainable development practices; this in turn allows us to share lessons learnt and knowledge with our development partners, clients and cross-border colleagues.
If you would like to find out more about #logisticsproperty and our #warehousedevelopments in France, contact me, Hugues Desbarrieres and follow our Scannell Properties France account.