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London to run out of industrial space in just 8 months

London to run out of industrial space in just 8 months

London has just eight months of industrial space left, thanks to a surge in e-commerce requirements.

More than 1.3 million sq ft of additional industrial floor space is now required each year in Greater London to keep up with online retail demand, according to data from global real estate advisor, Colliers International.

The firm also warns that encroachments from residential development is also reducing the supply of London land for warehousing and say developments mixing housing and logistics could be the answer.

Len Rosso, head of logistics at Colliers, said: “London has been losing industrial land at an alarming rate of 260 acres per year, despite online retail being a massive growth sector and the supporting infrastructure providing nearly one in ten of London jobs.  Common sense tells you that this isn’t sustainable.”

Colliers data shows the average annual take-up of industrial space in London has reached 7 million sq ft, one third of which is smaller units up to 30,000 sq ft serving the urban logistics sector.

However, the supply of industrial floor space in London is currently around 6.1 million sq ft, allowing for just eight months’ supply, the lowest levels in the country.

Demand has been so great that in West London, land that was scheduled to be gradually released to the market over the next 20 years, vanished in just four, say Colliers.

 “If the pace of land released doesn’t change and protective measures are not put in place to ring fence commercial land from residential encroachment, London will reach its long term industrial land targets before the end of the year,”  Rosso warned.

Industrial space is most constrained in West London and around Heathrow, where there is less than six months’ worth of supply available as annual take-up hits 2.8 million sq ft, and just 0.4 million sq ft is under construction.

“To help relieve the pressure on land availability in London, an increasingly viable solution would be to incorporate industrial occupiers alongside residential and other uses. These would have to be planned carefully, with screening, separate entrances and so forth, but if successfully executed, it can be an extremely sustainable solution,” said Rosso.

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