Challenges in access to affordable industrial land in Galicia

Galicia, a land of deep-rooted traditions and breathtaking landscapes, has experienced remarkable economic growth in a variety of industries. However, despite this progress, a crucial challenge has arisen that directly affects the transport and logistics sector: access to affordable industrial land.

Galicia’s economic boom and its associated challenges

Galicia has emerged as a strong economic centre in Spain, attracting investment and contributing significantly to regional development. However, this growth has brought with it a problem that directly impacts essential industries such as transport and logistics: the shortage of affordable industrial land.

• Supply-demand imbalance: The increase in demand for industrial land, driven by the expansion of companies and the arrival of new players, has not been matched by sufficient supply. This has led to an exponential increase in land prices, making it difficult for companies, especially small and medium-sized ones, to access strategic locations for their operations.
• Impact on competitiveness: Freight transport companies and logistics operators in Galicia are highly dependent on the efficiency of their supply chain management. The lack of access to industrial land compromises the ability of these companies to establish efficient and strategic operations centres, affecting their competitiveness in the market.
• Excessive and lengthy administrative procedures: for the establishment of business initiatives in the territory of the Autonomous Community of Galicia.

Specific implications for the transport and logistics sector

Demand for industrial land exceeds half a million square metres. Companies are squeezing land from owners who have undeveloped space despite prohibitive prices, but what are the implications for the sector?

Constraints on expansion

The natural growth of transport and logistics companies often involves the expansion of their facilities and fleets. Difficulty in acquiring industrial land at reasonable prices limits these expansions, affecting companies’ ability to meet growing demand and explore new business opportunities.

Logistical challenges

Strategic location is essential in the transport and logistics sector. Companies seek to establish efficient distribution centres that minimise transport costs and optimise routes. Lack of access to industrial land in strategic locations imposes logistical challenges, increasing delivery times and associated costs.

Regional relocation

The lack of business land, its high price, red tape and the lack of quick access to all possible communication routes causes a flight of projects to other territories, as in the case of some companies to neighbouring industrial estates or to other territories, for example, to the north of Portugal, where prices are more competitive.

Possible solutions and general mitigation strategies

The challenge of access to affordable industrial land in Galicia requires immediate attention and concerted action. Possible solutions include the following:

Public-private partnerships

One effective solution could be to encourage public-private partnerships. The implementation of policies that promote the availability of industrial land at reasonable prices and the simplification of bureaucratic procedures can facilitate the access of transport and logistics companies to strategic locations.

Incentives and subsidies

The government could consider implementing incentives and subsidies for companies seeking to locate in designated areas and industrial parks. This would not only stimulate investment in these regions, but also help to balance supply and demand.

Optimising the use of space

Companies can explore space optimisation strategies, such as sharing logistics facilities or implementing advanced technologies to maximise efficiency in their existing operations. This can help mitigate the immediate need for large tracts of land.

Improving administrative procedures

Streamlining applicable administrative procedures and eliminating unnecessary or ancillary administrative burdens associated with them.

Future prospects: Industrial land under development to accommodate business initiatives

A series of measures are already being taken to promote the increase of quality industrial land in line with accessible demand through different formulas and in accordance with territorial plans, logistical conditions and demand in each territory, with special attention to cross-border areas with Portugal.

• Reinforcing the connectivity of land with communication networks, fundamentally alternatives to road transport.
• Offering industrial land, promoting this resource as a pole of attraction for companies, facilitating the establishment of new companies in our territory and avoiding the relocation of those already established.
• Developing more than 6.8 million square metres of business land, of which more than half a million square metres are in the development phase, more than 4.3 million square metres are in the drafting of technical documents and more than 3.1 million square metres are in preliminary studies.

In particular, in the case of the province of A Coruña, work is being carried out on the provision of new business land in the parks of Morás (Arteixo), Bértoa (Carballo), A Sionlla (Santiago de Compostela), Coristanco and Santa Comba.

In addition, the Second Vice-President and Regional Minister for the Environment, Territory and Housing presented her department’s accounts for 2024, with 514.8 million euros, on 30 October in the Chamber of Deputies. The budget earmarked to consolidate Galicia as an attractive territory for the settlement of companies and the expansion of existing ones grows to 40.5 million euros, almost 15% more than in the 2023 accounts.
This amount will allow the execution of actions in 22 business parks, highlighting the investments in Gándaras (€8.1 million), San Cibrao das Viñas (€4.5 million), Plisan (€3.9 million), Morás (€3.2 million) and Lalín (€3 million).

The subsidies and the effort to consolidate the role of the Xunta, through the public company Xestur (Xestión do Solo de Galicia) and the Instituto Galego da Vivienda e Solo (IGVS), as the largest developer of industrial land in Galicia and the only one that applies discounts of up to 50% on the sale price of all its land, with a balance of more than 3 million square metres awarded with applied subsidies amounting to more than €86 million, will also be maintained.

From an economic and financial point of view, the development of this land is of vital importance to attract business projects to this Autonomous Community and thus allow the establishment of an area for the productive materialisation of existing resources. It is therefore a challenge for the future in which productive, economic and employment growth will be dependent on their establishment in certain physical spaces.