Rebuilding Business Premises Versus Firm Relocation

One way to make land use more sustainable is to re-use vacant buildings. These building can be renovated and used again or converted to another use type. It would even more sustainable if these buildings never became vacant, which means that firms stay longer in their building. The literature suggest that the main reason why firms relocate is to expand rather than rationalise their operations. The same literature also suggest that firms hardly relocate because of characteristics of their location but foremost due to factors related to their premises. The hypothesis is therefor that renovation and/or expansion of buildings on site (together called rebuilding) may prevent firms from moving to new greenfield sites.To investigate this hypothesis we use a survey among 17,000 firms in two regions in het Netherlands which was conducted by the Chamber of Commerce. The response rate was 31%. The results of the survey show that 7% of the firm had plans to renovate their premises, whereas 9% had plans to relocate.The analysis of the survey confirms previous research on factors influencing relocations, but also show that firm with can expand their premises on site, more often have rebuilding plans than firms which cannot expand on site. On the other hand firms with relocation plans have significantly less possibilities to expand on site. About half of the firms with rebuilding plans prefer rebuilding over relocation because it is cheaper or quicker to realise than a relocation.Overall the results of the analysis show that rebuilding can be seen as an alternative to relocation if certain conditions are met. Two important planning related conditions are the physical possibilities to expand on site and land use plans that allow rebuilding. Another conditions is the type of industry; retail and manufacturing firms are more inclined to rebuild their premises than firms in other sectors.