Comment

Draft London Plan 2026: Same land, different rules – key changes for industrial and data centre uses

On 16 July, the Mayor of London published the Draft London Plan 2026, kicking off a 13-week consultation that will run until Thursday 15 October. Amongst the wide-ranging changes proposed, Chapter 4, "Growing London's economy in a way that benefits all", signals a notable shift in how the capital plans for industrial and logistics uses and data centres, with the latter covered by a standalone policy for the first time. Director, Planning, Christopher Schiele, explores what these changes could mean in practice and why the implications may be more nuanced than a first read suggests.

Industrial and logistics: a simpler – and stronger – framework? 

At first glance, the Draft London Plan has kept its promise of simplifying the approach towards industrial land-related policy guidance.

While the industrial land designations remain, the separate approach to Strategic Industrial Land (SIL), Locally Significant Industrial Locations (LSIS) and non-designated industrial locations – currently covered by Policies E5 and E6 – is gone, as is the standalone focus on the Co-Location of residential and industrial uses under Policy E7 (including the fact that residential uses may be acceptable in LSIS). 

A shift from local need to strategic demand 

In their place, new Policy GLE1 asks Local Planning Authorities (LPAs) to plan for "a range of suitable business space of different types, sizes and price-points", informed by the London Growth Plan and both London-wide and local assessments of supply and demand. In practice, this means that rather than just assessing their own need, LPAs will need to take into account the wider strategic demand across London when setting targets at a local level, raising the importance of getting their strategy – including locational choices and assessments of demand – right from the plan-making stage.

To help with this, the draft plan (Table 4.1) introduces benchmarks – rather than hard targets – for storage and distribution demand across newly defined Industrial Property Market Areas, drawing on a GLA evidence base not yet published (expected Summer 2026). Benchmarks, rather than fixed targets, should in principle give LPAs more room to respond to shifting market conditions, especially if demand increases due to economic (or housing) growth. General industrial or sui generis employment demand will need to be assessed separately.

Reviewing Strategic Industrial Land and Locally Significant Industrial Sites 

Perhaps of more immediate consequence for developers, Policy GLE2 asks LPAs to undertake a review of their SIL and LSIS designations and boundaries, for instance to identify any vacant or designated industrial land occupied by non-industrial uses. The latter could result in de-designation of existing SIL/LSIS not currently occupied by the ‘right’ uses outlined for those designations. Likewise non-designated (active) industrial sites could be designated as SIL/LSIS, thereby balancing the supply of industrial land where parts of existing designations are released, i.e. to meet the other main priority of the London Plan: housing.

For developers with medium- or longer-term plans to redevelop underutilised SIL/LSIS sites, this is worth watching closely: sites not fully occupied or redeveloped by the time a Local Plan review comes round could lose their (existing) designations altogether. 

More positively, on the supply side, the policy also supports strategic-scale Green Belt release to meet identified needs in ‘Broad Growth Locations’, with released land to be designated as future SIL. This is a further signal of the plan's intent to take a more proactive approach to securing industrial land where it's needed. 

Industrial land for housing

On the other side of the ledger, new Policy PV5 also takes a more structured approach to specifically releasing SIL and LSIS for housing than the current co-location model under Policy E7 (which is no longer considered acceptable in LSIS). It establishes a framework for Plan-led release guided by a set of exclusion criteria – such as protecting land needed for infrastructure uses, well-connected freight clusters, and CAZ-adjacent sites, among others – while a shorter list of specific, development-management-led release locations (Table 6.2) is identified for more immediate delivery, including Blackhorse Lane in Waltham Forest, where we secured resolution to grant planning permission for the redevelopment of Uplands Business Park to provide up to 1,800 new homes alongside 33,000 sq m of new, stacked industrial floorspace.

Industrial redevelopment 

The list of acceptable uses in SIL/LSIS has been simplified compared to Policy E4 in the current London Plan, simply confirming that Use Classes E(g)(ii)/(iii), B2, B8 and sui generis industrial uses (such as waste, aggregates, utilities and sustainable transport infrastructure) are supported in these designations. As noted below, this explicitly excludes data centre developments. Specific reference to wholesale markets or specific support for flexible hybrid space encompassing a range of employment-generating uses is missing – albeit this may be an oversight at this stage.

Set against that, however, is a welcome piece of flexibility in relation to the requirement for industrial intensification: this has now softened to something that 'should be supported'. This will be a welcome change for sites with high existing plot ratios, enabling redevelopments which provide, for instance, smaller footprints – but more efficient, industry-standard yard space (and potentially greater volumetric capacity overall) – to come forward more easily. Reference to multi-storey schemes – which have not yet established themselves as a real alternative to traditional employment schemes as highlighted in our topic research published in May – has been removed.

Notably absent is also the previous expectation for SIL to being capable of operating on a 24-hour basis or the wider agent-of-change safeguards attached to the designation. Without this explicit protection, developers on existing SIL/LSIS sites near sensitive receptors may find it harder to secure round-the-clock operation – something increasingly necessary to attract a wider, more unrestricted pool of occupiers and keep logistics moving to serve a 24-hour economy referred to elsewhere in the draft plan – and are likely to need to place greater reliance on layout and mitigation measures to address amenity impacts.

Urban Greening Factor requirements

Also worth noting at this stage is the proposed change to Urban Greening Factor (UGF) requirements for predominantly industrial schemes: previously exempt Classes B2/B8 will now need to meet a UGF target of 0.2 (against 0.3 for offices and 0.4 for residential). Given that large parts of these sites are already needed for operational yard space and vehicle circulation – and that the wider policy emphasis is on optimising every square metre for intensification – hitting the 0.2 target through ground-floor landscaping alone may prove challenging. If carried forward in its present form, therefore, Policy GHR7 could have the unintended consequence of pushing developers towards increased green roof coverage instead, with the attendant embodied carbon and cost implications.

Strategic view of London's economic geography

As well as the industrial designations noted above, Policy PV4 introduces a separate designation for 'Strategic Economic Clusters', which are areas of economic importance sitting outside the CAZ, town centres and designated industrial land. Seventeen are named in Table 6.1, spanning sectors from aviation and logistics (Heathrow Economic Area) to media and creative industries, including the Great West Road / Golden Mile corridor through Brentford and Chiswick, long home to major corporate campuses and now seeing significant change (including Hadley Property Group's retrofit-led redevelopment proposals of the former GSK headquarters for which we secured resolution to grant planning permission earlier this year). 

Alongside these clusters, the plan also identifies three wider 'economic corridors' spanning multiple boroughs: the UK Innovation Corridor, West Tech Corridor and Thames Estuary Production Corridor. Like the recognition discussed above, that LPAs need to look beyond their own borough and assess (industrial) demand on a wider, strategic basis, this is another example of the plan taking a more strategic, joined-up view of London's economic geography, recognising that clusters and corridors of activity rarely respect individual borough boundaries.

Data centres: a dedicated policy, with a different starting point

The most significant development for this sector is the new standalone data centre policy (GLE3). Its introduction is, in one sense, a positive step: if Local Plans (or other policy frameworks) were not silent about it, data centres have been squeezed into generic industrial policy despite having quite different needs – for example around power, water and clustering – so a bespoke policy that speaks directly to those requirements is arguably long overdue and reflects the sector's significant and growing economic importance to London.

That said, the policy resets where data centres sit in relation to industrial land. They have long been treated, for planning purposes, as a Class B8-type use; however, despite the use class, supporting guidance (Para 4.36) now draws a clearer line:
"Data centres are not included in the definition of industrial land for the purpose of this Plan. If a data centre proposal comes forward on designated industrial land before the plan-making authority has identified suitable locations within its Local Plan, the criteria for suitable locations should be applied in the interim."

The policy therefore seeks to protect SIL and LSIS for the (traditional) industrial and logistics or sui generis uses those designations were primarily created for, while giving data centres their own framework better tailored to their specific locational needs. Specifically, Policy GLE3 asks boroughs to proactively identify "Suitable Locations" for data centres through the plan-making process, having regard to:

1. Availability of current and projected electricity network and water supply capacity, recognising the need to meet local housing, employment and other infrastructure demand
2. Opportunities for clustering, to support resilience and co-location benefits
3. Local heat recovery opportunities
4. Availability of land without compromising the supply needed for local housing, employment and freight-dependent infrastructure
5. Where relevant, compliance with the Habitats Regulations, considering air quality impacts from back-up generators on the Epping Forest Special Area of Conservation.

How LPAs apply this test on designated industrial sites specifically will be worth watching closely: as they are being asked to ensure data centre locations do not compromise local housing or employment need, planning applications on SIL and LSIS sites are likely to require robust evidence on both of these points, at least until a borough has identified its own Suitable Locations.

Where a scheme comes forward outside a designated Suitable Location, GLE3 sets three further requirements: specifically, developers must: 

• Justify the location and demonstrate mitigation of impacts on local infrastructure capacity; 
• Show how impacts from electricity connections will be minimised; and, 
• Where Green Belt or grey belt sites at the edge of Broad Growth Locations are proposed, demonstrate that no suitable brownfield sites are available first.

Creating greater certainty

In short, the aim of bringing more structure and certainty to how data centre locations are planned for is welcomed, though its success will likely depend on LPAs moving reasonably quickly to designate their Suitable Locations or setting out clear rules for where they are being supported, including, where relevant, on existing designated or non-designated industrial land. In the interim, early engagement with LPAs is likely to remain the most reliable route to bringing sites forward with confidence.

For developers looking at data centre opportunities in existing SIL/LSIS sites, it will be important to review this closely and demonstrate how data centres in such locations can address an identified need, whilst delivering a wide range of socio-economic benefits, including new employment.

Affordable workplace policy

Briefly, it's also worth flagging the new draft affordable workspace policy (GLE7), which explicitly brings data centres into scope for the first time while, on the current drafting, appearing to drop general industrial (Class B2) uses out of the scope altogether, but otherwise advises boroughs to encourage affordable workspace across all other employment schemes (where there is a need and it is viable). Both points are worth watching as the plan progresses.

What this means in practice

Read together, Policies GLE1, GLE2 and GLE3 reflect a London Plan that seeks to plan more deliberately for both the industrial and data centre sectors. For the industrial and logistics sector, the direction of travel is broadly positive, particularly the greater recognition that industrial need operates on a larger-than-local basis. At a more site-specific level, however, the proposed changes to UGF and loss of the 24-hour operation and agent-of-change safeguards are areas the sector may wish to press for further clarity or refinement on as part of the consultation process, given the possible implications for how schemes are designed and operated.

Those in the data centre sector gain a bespoke policy that, if applied well by boroughs, could give developers a clearer route to unlocking appropriate sites than the current ad hoc reliance on industrial land may allow (albeit so far data centres proposals on SIL were generally supported by the Mayor of London). Going forward, however, data centre developers may no longer be able to assume that designated industrial land will be considered a suitable location in principle, making early engagement with LPAs and/or the GLA imperative on such sites. 

Much of this detail could of course still change as part of the consultation process. Given the significance of both sectors to London's economic competitiveness, it is important that those in the industrial, logistics and data centre sectors alike make sure their voice is heard before the window closes.

If you would like to discuss the proposed changes to the Draft London Plan and the potential impact on industrial, logistics and data centres, please contact Christopher Schiele, Catriona Fraser and Nick Edwards.

24 July 2026