New London Plan – A Bold Challenge for Logistics
Logistics – from Cinderella to Princess
The 2016 adopted London Plan mentions the word ‘logistics’ 30 times. The draft new London Plan mentions logistics 61 times. Compare this to the UK Industrial Strategy (November 2017) and a mere 6 references. And the draft NPPF (March 2018)? Logistics is not mentioned at all.
Two conclusions could be drawn from this. Firstly, the recognition for the role and importance of logistics nationally is weak, which is odd, given employment growth in logistics is expected to exceed growth in other sectors of the economy including growth in the finance and insurance sector (a 19% increase in FTE jobs between 2013 and 2035). The work carried out by the BPF and Turley and published in ‘Delivering the Goods’ also demonstrated the considerable strength of the sector economically, with headlines including an estimated 8% of the UK’s workforce employed in the sector and annual economic productivity in the sector estimated at £100bn GVA.
Secondly, the importance of logistics to the London economy has shifted firmly from back seat to front seat. Presentations given by Jules Pipe and the GLA’s policy team at the launch of the London Plan underlined that the rate of loss of employment land to other uses cannot continue. This has given one of the key headlines to the draft London Plan: No net loss of industrial floorspace capacity or operational yards. This applies to allocated Strategic Industrial Locations (SIL) or Locally Significant Industrial Locations (LSIL). Under the 2016 London Plan, 19 boroughs can release employment land. In the draft London Plan this has reduced to only three.
Emerging types of logistics uses also have recognition – draft Policy E4 puts ‘last mile’ distribution and micro, small and medium-sized units on equal footing with light industrial and general industrial uses. ‘Hybrid’ distribution space such as consolidation centres are encouraged as part of large-scale residential and mixed-use schemes. Integration of movement of goods and deliveries with major mixed-use developments is essential. There are good reasons to be optimistic about the incremental benefits this will have for congestion, highway safety and air quality.
Hawkins\Brown's Fast>Fwd Building, further details available here.
The draft London Plan sets a number of big challenges for new industrial, distribution and logistics schemes. The big question is whether the sector is ready to meet them? Here are a few key targets and policy requirements for the reservoir of allocated employment sites that remain:
Intensification – with a stated target plot ratio of 65%
We know that this target is intentionally ambitious. Policies E5 and E7 support intensification through opportunities such as multi-storey schemes, mezzanines, basements and small units. Policy E7 refers and its supporting text are 5 pages long, so the GLA is clearly very serious about this. However, will the ability to achieve viable intensification be compromised by other policies, such as G5 ‘Urban Greening’, where major developments have a target ‘Urban Greening Factor’, plus air quality positive and zero carbon requirements? Affordable workspace requirements are also there to be fitted in.
Are multi-storey schemes realistic? Conversations with logistics developers and agents tell us that in some cases the values that can be achieved for schemes are negative. Build costs are disproportionate, ramp gradients for HGVs make multi-level suitable only for large buildings. For now at least occupiers and institutional funders seem to be wary of them as relatively unproven formats. There is a danger that London boroughs will rely on intensification as a panacea which cannot be achieved in all instances.
Co-location with other uses
Where development plan policies allow, consolidation is now permitted in SIL to support residential and also contribute to town centre renewal. Can residential really live beside (or above) logistics and industrial uses? Supporting documents for the draft London Plan certainly go to great lengths to show how in practice this can work physically. A few schemes are leading the way, such as SEGRO’s development at the Nestlé factory in Hayes, but the concepts and formats are still relatively untested in the market. Hawkins Brown are also looking into this with their Fast>Fwd Building concept, as shown above. Dialogue and enhanced relationships between residential and logistics developers are needed for this to be manifested as a solution.
Car parking standards
The London Plan states that for B2 and B8 uses regard is to be given to the B1 use car parking standards and accessibility. For Outer London, the maximum standard is currently 1 space per 100-600 sqm GIA. In the draft London Plan, Outer London locations are offered a more generous figure of 1 space per 100 sqm GIA. However, for Outer London Opportunity Areas the standard proposed is 1 space per 600 sqm, so in these areas parking provision that schemes can achieve will be potentially halved (or worse). The intention for Central and Inner London is car free. Careful management of movement, imposition of stringent Travel Plans and Delivery & Servicing Plans are to be expected.
All in all, logistics and industrial uses have much greater policy recognition in the draft London Plan. Employment land has now got the protection it badly needed to stem the losses to other uses and also protect the employment opportunities it can support. This blanket approach does not recognise the nuances of development and occupier requirements and it isn’t necessarily good news for delivering homes. However, logistics now has the profile it deserves, and its roles in helping to support the economy, manage movement and deliver sustainable development are clear.
Challenges have been laid down to re-think what employment uses look like and the potential that employment sites have through intensification and co-location to support other uses in addition. However, rather than lagging behind, emerging policy is arguably now some way ahead of the curve. The challenge put to the sector is now to shift gear and catch up. It will need a lot of commitment from developers, funders, designers and occupiers to achieve great design and intensification and to shape the places in which they are located. Watch this space, the vision for logistics in London is a bold one but the prize will surely come to those who embrace it.
 Delivering the Goods, BPF and Turley, 2015
 London Industrial Intensification Primer, GLA, 2017
4 April 2018