SEGRO plc has launched the ‘Keep London Working’ report, produced by Turley, which offers a critical insight into the importance of industrial land in London and the vital role it has in supporting the capital’s future economic and population growth. The movement of goods to and from people and businesses keeps London functioning and helps make it a successful global city.
London is a thriving city and as the capital grows the demands placed on businesses to get their goods and services to their customers increases, with consumers expecting certain deliveries within the hour. London’s population is projected to increase from 8.7 million to over 10 million by 2031, the equivalent of the populations of Birmingham and Coventry moving to the capital. This, combined with technology, has led to an explosion of ecommerce, driving the demand for industrial land to ensure we can all get our goods delivered.
Logistics plays an increasingly important role in linking people and businesses to goods. However, the evidence suggests that with population growth, the scale of activities will need to increase, and this will prove difficult if the critical land needed to create necessary facilities remains scarce.
Population growth also puts an additional strain on the availability of housing. However, industrial land is being lost rapidly, frequently to residential use, at a rate three times greater than the Greater London Authority (GLA) had expected. At the current rate of decline, the GLA’s expected release of industrial land by 2031 could be reached this year. The loss of industrial land is happening across all London boroughs, with the greatest impact in Newham, Greenwich, Bexley and Wandsworth. The boroughs that have experienced the greatest estimated losses since 2001 are Newham, Havering and Tower Hamlets.
The logistics sector is also working hard to address the issue of London’s poor air quality. Light commercial vehicle emissions are only responsible for a very small proportion of the overall total emissions, accounting for less than 4% of carbon dioxide. Innovative solutions are being implemented to increase environmental sustainability within the sector including electric vehicles, retiming of deliveries, use of reverse logistics and development of sustainable buildings.
David Sleath, CEO of SEGRO, said: “A robust and flexible logistics infrastructure is key to keeping London working. It’s very important to halt the loss of industrial land to provide employment opportunities and a landscape for new businesses to arise.
“As a result of the report, our call to action, endorsed by the British Property Federation, is to immediately undertake a strategic review of industrial land coupled with a full and comprehensive demand assessment.
“There needs to be a thorough review of industrial land designation, which recognises the locational requirements of urban logistics operators to be able to respond to last mile activities.
“We need to ensure the industrial and logistics sector has a voice within London policy decision making to ensure that the rapid loss of industrial land is reversed and intensification of industrial and logistics uses is possible when practical.”
Jasmine Whitbread, Chief Executive, London First, said: “London’s industrial land is home to ecommerce businesses, technology start-ups and companies vital to keeping the city supplied with goods and services. So we must ensure London has capacity to house these companies alongside the people they support and employ.”
Melanie Leech, Chief Executive, British Property Federation, said: “The industrial and logistics sector is an important part of our modern economy, but the vital part it plays in our everyday lives can often be overlooked. The provision of industrial land does more than just ensure that online deliveries arrive on time – it also creates skilled jobs and delivers significant economic growth.
"The competition for land in London is intense with an acute shortage of housing, but we need a balanced approach. Sustainable communities require both homes and the right infrastructure to provide services, facilities and jobs. We therefore fully support this initiative and SEGRO’s recommendations.”