The third NLA panel on industrial and logistics was the first to be held in person at The City Centre and the meeting was chaired by Tom Alexander of Aukett Swanke.   

The meeting address three key themes: 

Land use – Co-location and Multi-Level
Environmental – The Net Zero Agenda – the industrial buildings
Urban Logistics Network – Infrastructure, Transport and Distribution

Tom introduced Robin Woodbridge of Prologis to describe how Prologis has developed intensified industrial space in Japan. Robin explained that Japan is 20 years ahead of the UK in its intensification of industrial buildings. He played a video of his recent interview with Akio Nakamura, SVP of Prologis Japan who gave a fascinating insight into how multistorey industrial buildings are now the norm in Japan and the preferred design is to use vehicle ramps instead of goods lifts. Akio explained that the buildings are multi-tenanted with up to two tenants on each floor so  each building could have say 10 separate tenants. Typically there will be 1,000 – 1,500 people working in the buildings. Japan does not mix residential industrial uses in co-located schemes, save for providing amenity and sleeping facilities for truck drivers.

Panelists questioned whether the Japanese planning system helped industrial development and intensification and they observed that the Japanese buildings were on large sites 10 acres plus close to good roads. In London this format is only viable in high value locations where rents are higher to overcome the greater construction costs and a key obstacle for intensification is that of traffic generation. Where more industrial space is built it will generate more traffic and TFL struggles to reconcile the policy requirement for intensification with the inevitable increase in traffic. The panelists questioned whether similar building in London could be on a smaller scale. 

Tom Alexander asked what lessons there were for the New London Agenda. “What’s there, what’s missing and what needs changing?” Panelists agreed that London needed a champion for industrial accommodation who understands the sector and who can to set targets and strategic policies/site allocations clearly assessing the need for last-mile logistics (smaller hubs as well as big box). They could change the negative pre-conceptions associated with Industrial, logistics and intensification – the term is misleading and alarming.

Land use – Co-location and Multi-Level
In terms of land use,   the suitability and safety of mixed uses on small sites was questioned and co-location schemes are only suitable where the site is large enough to create real separation. It should not be considered for sites under say 5 acres. LPAs are overly focussed on providing maker space
(formerly B1c now use class E) and essential B2/B8 space is continuing to be being lost and industrial rents are soaring. LPAs could allow industrial property to be re-provided off site in more suitable locations instead of forcing co-location. The policy focus could be on Japan style multi-level space in appropriate locations and single use sites (industrial only).  However, in London,  smaller schemes are likely to be more suitable.  TFL needs to come on board to support multi-level schemes otherwise they are stifling planning initiatives and are at odds with new policy.the panelists  Except on very large sites, co-location should be a last resort.

Stacked and co-located industrial and resi  works in some instances, and there are real life examples of this, increasingly so including GLA-backed schemes. What are the other Hybrid opportunities?  There was concern that the higher values of industrial sites are now stifling residential development because residential developers cannot compete in some locations, and planning policy is un-prepared. 

 Environmental – The Net Zero Agenda – the industrial buildings Industrial developers are already committing to net zero standards. 

Where policy first led, the market has now taken over. Investors and occupiers are more concerned with ESG matters. There needs to be clarity on benchmarking approach and flexibility in policy. Also potentially some hard (strategic) decisions as to behaviour change - does it mean commercial road movements are prioritised over residential ones, for e.g.  Too little attention is given to adaptive re-use  of buildings. We have seen several 25-year old facilities, that are being adapted for use as data centres. Typically we find we need to demolish to make for a datacentre. There is a lack of focus on of re-use of building components and/ or recycling of materials. Developers could align with the UKGBC Net Zero Buildings Framework definition for credibility and ensure their scope is clear; is it Net Zero Carbon for construction, operation or both. We think all developments going forward should be measuring their carbon. We suggest a reduction of 25% carbon emissions against a notional building regulations compliant warehouse should be an absolute minimum. Lets consider materials too – never a better time considering material costs and availability issues.  Having industrial sites close to homes and other centres of demand will reduce delivery miles driven, enabling the use of electric vehicles and cargo bikes as well as the development of local repair and reuse centres. Prologis is focused on ESG and welfare of employees.  Conventional single storey industrial buildings have a large roof space to floor area ratio which accommodates PV panels that provide a high proportion of renewable energy.  The multistorey format has a lower roof to floorspace ratio which is less energy efficient. 

Urban Logistics Network – Infrastructure, Transport and Distribution

It is difficult  to get politics and policies to move anything like the same pace as theiIndustry requires.  London has the benefit of the River, a key asset which is under-utilised.  The PLA is promoting it. Developers however do worry that there is too much regulation and bureaucracy to overcome. Rail  is another resource under-utilised by the logistics sector. There are some amazing opportunities but the pace is slow and change is burdened by a huge amount of politics.  An example is the WELL-LINE. Using a redundant Royal Mail tunnel which was mothballed many years ago which connects some of the major real estate centres in the city. Already many of the shafts connected to this have now been built over, many are however still there that could be utilised. London is too big to service from around the outside and needs a network of industrial space that penetrates the centre. Industrial buildings that are closer to their markets can operate smaller vehicles/cargo bikes and be part of the air quality and congestion solution. However, LPAs need to recognise that commercial vehicles are an essential part of  industrial operations.  Champion night time working and 24/7 use of buildings and vehicle movements to alleviate congestion and improve air quality at peak times.