This paper is about the research that has been done towards the importance of land allocation policy within the sustainable development of industrial areas. In the theoretical framework industrial areas are explored and factors that contribute towards sustainable development described. Argued is that the policy and governance plays an important role in realizing a sustainable area. Specifically the influence of land allocation is proposed in this context as instrument for achieving a sustainable industrial area. Three aspects of land allocation are discussed: type of ownership, housing conditions and pricing policy. A case study is done to investigate the implementation of land allocation on its support, feasibility, effectiveness and risks. The results of the case study and theory show that special land allocation policy could be a useful tool for achieving a sustainable industrial area.