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Co-location set to deliver 31,000 new London homes as 'beds-over-sheds' schemes evolve
Co-location developments – where housing and modern industrial space are combined – are poised to deliver 31,000 new homes across London, according to our latest research.
The latest study – the fourth in our annual co-location research series – shows the Co-location model is rapidly evolving to meet London’s dual housing and employment needs. In just two years, the proportion of Co-location applications that include alternative living formats – namely, purpose-built student accommodation (PBSA) and Co-living formats – has jumped from near-zero to one in every two applications submitted.
Our research also reveals a continued shift – acknowledged by the London Plan Consultation Document (2025) – towards lighter and more creative industrial typologies within Co-location developments. Some 55% of schemes now include an element of more creative industrial Class E(g)iii floorspace – up from just 27% of existing provision on these sites – while traditional warehousing / manufacturing uses of B8 and B2 are becoming less prevalent, featuring in only 29% and 16% of schemes respectively, down from 33% and 20% of existing provision.
Nevertheless, our research shows that in quantitative terms, Co-location schemes are working harder than ever to address the capital's industrial land requirements. The current pipeline projects a 53% increase in employment floorspace compared to existing provision on these sites – the greatest proportionate increase recorded to date – while simultaneously delivering much-needed housing.
For the first time, we have also undertaken detailed economic modelling to quantify the substantial economic benefits associated with the capital’s current pipeline of Co-Location schemes. We calculate that if implemented, the current pipeline could generate £715 million in gross value-added annually, support 8,500 direct jobs, and provide homes for over 85,700 residents. Encouragingly, 70% of approved schemes are now showing signs of implementation through planning condition discharge or active construction.
Catriona Fraser, Director, Planning said:
"London’s Co-location pipeline demonstrates growing confidence that you can successfully deliver both housing and quality industrial space on the same sites.
“Our research shows these schemes are becoming increasingly sophisticated, with alternative living typologies like PBSA and Co-living proving natural partners for industrial uses. Their shorter tenures, professional management structures, and typically more mobile demographics help minimise potential conflicts with industrial operations while contributing significantly to London's housing targets."
While delivery challenges remain across the housing sector – with the London Plan Consultation Document acknowledging that Co-location schemes have, to date, seen limited build-out rates – the model's strategic importance appears secure. The Document's continued acknowledgment of Co-location as a housing delivery mechanism, combined with its proven capacity to simultaneously provide new homes and employment floorspace aligned with the Mayor's growth objectives, positions it as a key component of London's housing strategy as the capital pursues its ambitious target of building 88,000 new homes annually.
Catriona added:
“This year's findings represent the highest housing delivery total we've recorded since we began tracking Co-location four years ago. Despite the challenges facing the housing sector, the sector's maturation and increasing implementation rates suggest that Co-location continues to move from ‘concept’ to ‘reality’ as a means of addressing London's housing and industrial needs."
2 July 2025
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