Redeveloping industrial land: are contamination and remediation schemes affecting the price of industrial real estate properties?

Redeveloping industrial land may run across obstacles, even within the same land-use designation, because previous industrial activities jeopardized the quality of the site. Contamination of soil and water is an example. Using the a hedonic price method, this paper explores the effect of contamination and alternative remediation schemes on the industrial real estate property market. We consider the case of Porto Marghera in the Lagoon of Venice, a large and complex contaminated site listed on the Italian National Priority List (NPL). Our results indicate that the industrial real estate market rewards properties with complete and certified cleanup scheme, while proximity to properties remediated with the “permanent safety containment measures” affects the selling price of nearby industrial properties negatively. Characteristics of the properties, such as size, location, accessibility, and other relevant economic indicators do matter in explaining price differentials.