HiLife

hilife
Project box

Geographical area: Europe

Location: Madrid, Spain

City size: Large (between 1,000,000 and 5,000,000 inhabitants)

Promoter: Municipality of Madrid

Developer: Grupo FM Logistics and Citylogin

Start year:

End-year: In progress

Implementation phase: Implementation in progress

Project size: Block

Total area of intervention (in sqm): 33.954

Total investments (in USD): -

Project overview

HiLife is a redevelopment project located in the Industrial district of La Atalayuela, at the southeastern side of the city of Madrid. The project will redevelop an old industrial site covering a total area of 33,954 sqm. The land site is owned by the Municipality of Madrid, and it is divided into two individual parcels of 16,053 sqm and 17,901 sqm, respectively. The renovation of the two industrial lots is part of La Atalayuela renovation program, which targets the redevelopment of the industrial district of Madrid, with the goal to attract new commercial and industrial activities in the area, creating new job opportunities especially for neighboring areas. The project aims to renovate an underutilized industrial area which is surrounded by other important industrial activities. The project won the Reinventing Cities initiative in 2021, where the Muncipality of Madrid participated with several sites. The Municipality of Madrid opened a public tender to select the renovation project in 2020. Grupo FM Logistic presented the HiLife project, developed with Citylogin Ibérica and Grupo CIVIX, winning the public tender. After the assignment, Grupo FM Logistic signed a concession agreement with the Municipality of Madrid. The company received the development rights for a limited period of time corresponding to the period needed to recover the investment, while the Municipality of Madrid received a one-time fee for the concession agreement. The masterplan of the project has been detailed by Grupo CIVIX, an organization composed of architects, designers and urban planners. HiLife will create two cross-docking infrastructures for last-mile logistics serving the entire Municipality of Madrid, with the goal to innovate the last-mile logistic sector following sustainability and climate neutrality principles. In addition, the project will foster the employment of clean energy for the entire logistic and transport operations, with the construction of a green hydrogen production plant. The construction works started at the end of 2023. Besides the clear environmental targets, the project will create significant employment opportunities by creating 350 new job positions between logistic operations, transportation and maintenance of the infrastructures. In addition to economic benefits, HiLife will supply the entire logistic operations with clean energy mainly generated from the installation of solar photovoltaic panels, green hydrogen, and electric and hydrogen-fueled last-mile vehicles. The creation of green areas and the new water management system will significantly improve the resource efficiency of the structures, while also improving biodiversity and microclimate measures.

The two lots follow different allocations in their surface areas. Lot A will be composed of the logistics structure (43%), offices (3%), green areas, natural water storage tanks and bioclimatic greenhouses (23%), with the remaining surface allocated to parking and internal infrastructures for distribution (31%). Lot B will have a mostly similar allocation of its surface with logistics platforms (19%), offices (1%), green areas and natural water tanks (35%), and internal infrastructures for distribution (41%). In addition, lot B will host the multifunctional center (3%) and the green hydrogen production plant (2%).

Benefits

The establishment of a new last-mile logistic center will bring significant economic benefit to the industrial district. The new logistic infrastructures will create 300 new job positions directly in the logistic operations. In addition, 50 more job positions will be covered for the functioning of the multifunctional center and the maintenance of the green areas implemented on the site. Lastly, the creation of the new logistic center will likely increase the attractiveness of the entire industrial district, attracting new investments in the area and the relocation of other companies.

The main environmental benefit brought by the renovation project is given by the participation to the Reinventing Cities initiative. In fact, as required by the competition the project will create high energy-efficiency buildings to achieve LEED certifications. The project is adopting a circular approach for the entire construction process. In particular, the construction phase will reuse the waste material from the excavation for the construction of the new structure. In addition, the construction works will employ biomaterials for the new buildings and will implement a detailed life-cycle management plan for the disposal of construction materials. The project entails the installation of solar photovoltaic panels on most of the buildings, covering an area of almost 13,000 sqm. The solar photovoltaic panels will serve the charging of electric vehicles and will support the operations of the logistic platforms. The renovation project will also install a green hydrogen plant dedicated to fueling last-mile logistic vehicles, which will reduce the emissions in the city. The clean energy output is substantial, with the solar panels generating 2,555 MWh per year and the green hydrogen plant producing 29,400 kilograms of hydrogen each year. The clean energy produced will be mainly utilized by the logistics platforms and operations, which will also employ energy from off-site renewable energy sources. Additionally, all internal logistic transportation and last-mile logistic vehicles will be powered entirely by electricity and green hydrogen, ensuring a comprehensive adoption of sustainable energy solutions within the logistics infrastructure. The renovation of the industrial site will target the maximum efficiency in the usage of resources, especially regarding water management. The new water management system will collect and converge rainwater into the new open-air tanks for natural purification. In addition, the new system will improve the treatment and reuse of wastewater, reducing the usage of clean water and improving resource efficiency of the entire infrastructure. With the creation of water tanks and around 9,000 sqm of green areas, the project will significantly improve the biodiversity of the area, reduce carbon emissions and improve climate mitigation. To further compensate its emission, the redevelopment will also include the compensation of carbon emissions from the construction phase with the implementation of reforestation projects within Spain.

The renovation of the industrial area will bring some positive social effects with the creation of the multifunctional center which will host a nursery school for district employees and residents of the surrounding areas. To promote sustainable mobility in the area, the project is set to create free electric bicycle charging stations spread across the site. In addition, the redevelopment will also create a new electric vehicle charging infrastructure, open also to non-residents, to promote the employment and usage of electric vehicles in the surrounding neighborhoods.

By participating in the Reinventing Cities initiative, the buildings will be constructed following the environmental and energy requirements needed to obtain the LEED certification.

Finance model

The project has been privately funded by the Grupo FM Logistic, after receiving the development rights through a concession agreement with the Municipality of Madrid.

Grupo FM Logistics entirely financed the redevelopment project. The organization employed both equity resources and medium-term debts to finance the renovation of the site. The Municipality of Madrid concedes development rights to the entities selected through the public tender. The Municipality of Madrid and the entities appointed stipulate the agreement which details the length of the concession and several public requirements in terms of land use, maximum building surfaces and volumes, energy efficiency and nature-based solutions. Grupo FM Logistic paid a one-time fee to the Municipality to receive the development rights and the ownership of the area. The logistic assets built on the site will then be managed and operated by Citylogin Ibérica which pays an annual fee to Grupo FM Logistics, while the energy plant will be operated by another company.

References and Credits

SUR Lab Bocconi (2023). Deliverable ATM 2.

Image from the Ayuntamiento de Madrid, retrieved here.