Peter Dobler: Strategies to build strengths – Tenders for industrial estates

autobahnring-münchen

Munich has access to numerous motorways.

The state capital of Munich is the po­­lit­i­­cal and economic centre of the Free State of Bavaria and of the Munich Me­­tro­politan Region MMR. What is referred to as commuter belt, the area accessible by suburban rail, consists of rather small-town or rural municipalities.
The entire region of Munich, like the MMR itself, is dependent on Munich as a world-famous urban centre. It would be fatal to weaken certain functions of this centre or to transfer some of its tasks to the ad­­joining region, because only a strong city of Munich will open up new opportunities and perspectives for the region as well. Indeed, the entire catchment area of Mu­­nich benefits from the cultural, sports, educational and other central facilities, whose impact reaches far beyond the me­­tropolis that has to shoulder most of the related burden. The region is spared these expenses, which is one of the reasons why it can reduce local trade tax rates.
When looking for a place to relocate to, investors make their decision based not only on the attractive appeal of the lo­­ca­­tion, but rather on criteria like real es­­tate and infrastructure costs, availa­bil­ity of workforce, transport links or the afore-mentioned trade tax rates. So far, municipalities have been too busy striv­­ing to anticipate metropolitan models of success and competing for prospective investors. With great unanimity, all of them approach the same companies that are expanding their business and seeking locations. As a consequence, a downward price spiral is set in motion, valuable sites are offered at steadily fall­­ing prices. While this may be an advantage for buyers and investors, the ef­­fects on the regions are inflationary as real estate cannot be reproduced. Not to mention ecological and economic “sustainability” aspects.

Potential land resources
What can be the secret to success? Ob­­viously, those who are successful in build­­ing their strengths and avoiding their weaknesses have the best chances to develop potentials. To hold its ground in times of increasing competition, Mu­­nich must strengthen its role as an ur­­ban centre, particularly by expanding na­­tional and international transport links. World-renowned groups of companies as well as globally active medium-sized businesses must be headquartered in Munich. The same goes for banks, insur­­ance companies and other firms that have no or little problems paying high of­­fice rents: “Central Munich” is the right location for them. All university-related institutions, spin-offs and the like should also remain in the centre of Munich.

The required success can only be achieved by interlinking teaching and research on the one hand and research-based compa­­nies on the other. Taking business away from each other is usually detrimental to a region; research centres depend on physical proximity and concentration of knowledge.

The region can make larger and more modestly priced properties available to prospective investors. In this context, how­­ever, priorities have to be set, in line with the specific strengths of each locality and in coordination with other industrial estates, which are coherent and do not create competition between neighbouring municipalities.
For example, transport-related busi­ness­­­es such as logistics com­­panies will most likely be located near motorways. While nowadays few municipalities want lo­­gis­­tics centres in their vicinity, expe­rience shows us that such centres usu­­ally at­­tract more firms and service pro­viders. The same thing happens when a big-name company, such as Roche in Penz­berg, is already present. In this case, municipal­i­­ties should create ade­­quate conditions for suppliers and serv­ice providers to lo­­cate there. Possible spin-offs, buy-outs et cetera should also be given consideration. Good employee retention and identifica­tion with their company are another ad­­vantage for the region, which should not be underrated.
In order to save resources, only inter-mu­­nicipal industrial estates should be des­­ignated within counties or regions. This will also help to avoid cut-throat compe­tition among municipalities.

Outlook
Coordinated action is required to make even better use of existing potentials. To ensure the further development and long-term viability of the Munich Metropolitan Region as a business location, it is necessary
1. for the MMR to perceive itself as a collective entity where all parties in­­volved cooperate to save resources by reducing the consumption of land for commercial and industrial uses. To achieve this, among other things, in­­dustrial brownfields are rehabilitated, the economy is restructured from man­­u­­facturing to service-based operations and a division-of-labour approach is establishing itself as the standard within the MMR.
2. that commercial and industrial pri­or­ity sectors be jointly defined by stake­­holders in the region. Apart from mi­­cro premises for local craft firms, ma­­jor commercial/industrial estates should no longer be established with­out proper coordination.

In addition, trade tax revenues could be allocated according to a formula to off­set imbalances.

Such joint efforts will produce transpar­ent criteria for companies and organiza­tions planning to relocate to base their location decisions on. These criteria will be determined by MMR partners rather than imposed by unprofitable prices for properties.

The Munich Metropolitan Region is rightly regarded as a leading urban centre in Europe. There is much potential, though, for sustainable improvement according to economic and ecological principles in the field of industrial and commercial real estate.

 

Dobl319Der Autor führt in der vierten Ge­­ner­­a­­tion das 130 Jahre alte Kaufbeurer Fa­­mi­­­­lien­un­ternehmen als geschäftsführen­­der Ge­­sell­­schafter. Peter Dobler ist Grün­­­­dungs­­mit­­glied der Allgäu Initiative, Mit­­glied des IHK-­­Gremiums sowie Ini­­tiator und Be­­treiber der Allgäuer Grün­­der­­zen­­tren. Er engagiert sich besonders für die Ver­­netz­­ung der heimischen Wirt­­schaft.