The evolving landscape of the industrial and logistics sector has been a core topic of conversation for many, including the wider property industry, for a few years now. When our Chairman Laurie Chetwood talked to Peter Murray in 2021 as part of the NLA Insight series, they discussed the physical impact that the growth in online retailing, accelerated by the on-going pandemic, was having on the industrial and logistics sector. At this stage at Chetwoods we were already talking about the challenges of competing pressures on the value and availability of land with our logistics clients, and beginning to explore with the GLA new typologies and templates to co-locate logistics with other uses in and around London.
As a member of NLA’s Industrial and Logistics Expert Panel I have seen how fast the industrial intensification sector is evolving in response to these challenges and opportunities. Earlier this year, as Chetwoods CEO, I continued the conversation with Peter Murray, covering the redevelopment of SIL land, multi-storey and below-ground logistics engineering, creating value by repurposing ‘hidden spaces’, and successfully co-locating building uses such as at U+I’s Morden Wharf and the consolidation and relocation of the City of London Markets.
We also talked about the need and potential opportunities for new logistics networks and infrastructure including Chetwoods’ Well-Line plan to repurpose the disused Mail Rail line under central London into a logistics ‘super-highway’.
Since 2021 the quest for solutions to address the capital’s logistics and residential needs has become increasingly pressing, with new approaches and exemplar developments now beginning to have an impact. This is why it was a key time for the NLA to release their highly anticipated research in 2023.
Key Findings of the Report
The NLA’s latest report ‘Industrial & Logistics: Can London Deliver? ‘ considers the causes, manifestations and potential solutions for these challenges, drawing on current research, data, forecasts, project examples and insight from experts across the sector including developers, local and strategic authorities, planning experts, architects, agents and operators. We have summarised some of the key insights below.
The report looks in detail at the latest trends, challenges and opportunities in the industrial and logistics sector – a key component of the infrastructure that keeps the UK and London running, with £232 billion of GVA, a 14% share of the total economy, and 2.8 million industrial and logistics jobs in England.
The report follows on from the NLA’s 2016 ‘WRK-LDN shaping London’s future workplaces’ report, which showed that land and space for commercial and industrial uses were under threat due to massive demands for housing and higher land values, with uncontrolled office to residential developments having resulted in the loss of thousands of square metres of office and industrial spaces across the capital.
It confirms how, since 2016, the logistics industry has changed dramatically. Logistics in the UK has doubled in size since 2012 adding 190,000 workers between 2019 and 2021. The pandemic accelerated the growth and now the rate has been normalised, with 39% of road freight firms planning to increase the size of their fleets.
In London this growth – and the way logistics work – is being driven by consumer demand, commercial realities and other factors: a rising population; more homes in car-free developments being built with smaller kitchens; evolving delivery app technology.
E-commerce has surged from 18.3% of total UK retail sales in February 2019 to 34.6% in February 2021, accompanied by changes in consumer behaviour and expectations such as same day delivery, click and collect and returns. The report also identifies that British manufacturers are bringing production back to the UK.
This growth relies on industrial land of which there is a shortage. In the last 20 years London has released 24% of its industrial floorspace to other uses, mostly residential – which itself requires new logistics space. London’s vacancy rate for industrial land is now 2-3%, down from 16% in 2001. Furthermore almost 30% of London’s industrial land is not protected by designation.
The research for the report included roundtable discussions with senior leaders who suggest that a London-wide strategy is needed to protect and intensify the capital’s remaining industrial land, and to support industrial and logistics accommodation in new locations, while preserving and enhancing London as a good place to live, work and visit.
Three core areas the report investigates
Firstly it considers how London can deliver enough of the right sort of industrial space through co-location with logistics and industrial activities sited alongside or below other vertically stacked uses; intensification-focused single-sector sites with multiple logistics occupiers and often involving building up; the re-use of existing buildings with underused spaces from retail parks and car parks repurposed; centrally located last-mile hubs from uses from food production to collection points; and rethinking land designation from tactical purchases of central office and retail spaces to create larger sites, to a review of poor quality Green Belt land and disused farmland around London.
Secondly it discusses how the logistics network can be rethought including use of electric – with reducing vehicle size sometimes easier than adapting buildings, consolidation centres working with local last mile delivery hubs, and more integration through logistics operators working together with planners.
Finally, it asks whether logistics can be a good neighbour and employer by looking at the challenges and opportunities for changing perceptions by innovative architecture, placemaking and landscaping, alongside providing amenities and varied job opportunities for local residents.
Perceptions, challenges and opportunities
Chetwoods’ recent industry survey into perceptions and misconceptions about the co-location of industrial and residential uses highlighted how perceptions towards intensification and colocation are beginning to improve. At Chetwoods we also believe that the relationship between architecture, art and landscape architecture is one of the keys to the successful design of virtually any project, and that in our industrial and logistics work it can make a disproportionate contribution to user and community wellbeing. Our data-driven research project into measuring emotional response is providing interesting insights into this and influencing how we develop our own design work across all the sectors we work in.
The NLA report recognises the opportunities within the sector in terms of sustainability, job opportunities and innovation by designing and delivering sustainable, thoughtfully-designed architecture. It concludes that intriguing challenges affect all parts of the industry including planning, design, construction, delivery and ongoing operations, with the need for local authorities, the GLA and the private development sector parties to work together to achieve the exciting new mix of places, spaces and communities that London needs to thrive as a place to work, live and play.
I believe that research and knowledge sharing is the key to unlocking solutions and changing industry and wider public perception on new approaches within the industrial and logistics sector. This will allow for the progress needed and enable multi-storey, co-location and industrial intensification schemes to be delivered throughout the UK.
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