Why the new London Plan is a template for driving growth across the country
In London, the new draft London Plan offers an encouraging example of how planning policy can support that ambition, recognising the need to protect the industrial infrastructure that underpins economic growth while also delivering much-needed housing
In 2017 SEGRO published Keep London Working, research highlighting the economic consequences of losing industrial land across the capital. It revealed that between 2010 and 2015 London lost 528 hectares of industrial land to other uses, including housing – almost three times the rate envisaged by planning policy. It warned that continued losses could undermine the businesses and services on which London depends.
Today, those concerns are more relevant than ever.
London's housing crisis has intensified, while the growth of e-commerce, creative industries, life sciences and digital infrastructure has made industrial space increasingly integral to the economy.
Against this backdrop, SEGRO welcomes the direction of the draft London Plan as it begins to address concerns we have raised consistently over the past decade about the loss of industrial land and the need to safeguard space for economic activity.
One of the most encouraging aspects of the draft Plan is its recognition of the diversity of activities taking place on London's industrial estates.
The traditional image of factories and warehouses is increasingly outdated - today's estates accommodate everything from film and television production, food manufacturing and commercial catering to medical equipment sterilisation, vehicle servicing, recycling and research and development. Indeed, across SEGRO's London portfolio alone, more than 420 customers employ over 20,000 people, supporting sectors ranging from automotive engineering to food production and urban logistics.
Activities once undertaken within hospitals, hotels and offices have moved to industrial estates, where they can be delivered more cost effectively and productively. Industrial space therefore enables more efficient use of land across the wider city.
Protecting these spaces is about safeguarding traditional industrial employment whilst also supporting London's entire economy. Encouragingly, planning policy is beginning to reflect this reality.
We also welcome the draft Plan's more pragmatic approach to meeting future industrial land requirements, including its recognition that additional capacity may need to be accommodated through carefully considered Green Belt release.
This represents an important shift from the previous emphasis on intensifying existing industrial sites to accommodate growing demand.
Making more efficient use of industrial land remains important, but there are practical limits. Industrial occupiers need suitable vehicle access, servicing areas and yard space. These requirements cannot always be compressed without compromising operational efficiency.
Similarly, automation and robotics can significantly improve productivity but do not necessarily reduce floorspace requirements. Often, they change how space is used rather than how much is needed.
Recognising these realities is essential to ensuring London's industrial land strategy is commercially and operationally deliverable. The draft Plan's willingness to consider additional land supply, rather than relying on intensification alone, is welcome.
The draft Plan also recognises the growing importance of data centres as artificial intelligence, cloud computing and the digital economy drive substantial demand for capacity.
Industrial estates can provide appropriate locations, offering the infrastructure and separation from residential communities these facilities often require, as SEGRO has demonstrated at Slough Trading Estate.
However, industrial land alone cannot accommodate future demand without placing further pressure on an already constrained resource.
London therefore needs a clearer approach to where data centres can be located. While industrial land should not be the only option, it should remain part of the solution, particularly where established clusters already exist. Steering data centres away from industrial land without identifying suitable alternatives risks undermining both planning certainty and the benefits that clustering brings to the quality and resilience of London’s digital infrastructure.
This all needs to be balanced with the increasingly acute need to deliver housing across the capital.
The Plan provides for approximately 56,000 new homes annually, against government-assessed housing need of around 85,000.
There will be cases when industrial land is re-designated for housing but decisions to release it must be supported by compelling evidence that it is genuinely surplus to long-term requirements. Once industrial land is lost, it is extremely difficult to replace it.
In our view, the draft London Plan strikes the balance right between supporting a growing economy and enabling housing delivery and encapsulates what the Government wants to achieve at a national level.