A REVIEW OF SESSION TWO: WHY THE INDUSTRIAL AND LOGISTICS SECTOR NEEDS TO BE BRAVER
BY TIM WARD, CEO OF CHETWOODS
There was no shortage of audience questions at the NLA’s Industrial and Logistics Conference on Friday 8th July, which in my opinion shows just how much change the sector is about to embark on – although this was a topic for debate over the morning.
As a member of the NLA’s Expert Panel for the Industrial & Logistics programme, I was pleased to be able to contribute to the event and communicate my view on the future of the landscape, including multi-storey schemes and co-location with residential. These matters had been raised time and time again behind closed doors on the expert panel, and now it was the opportunity for an open discussion with an engaged audience.
A room of two halves, the differences in opinion were considerable but wouldn’t it make for a dull conference if we all agreed? I have given a brief analysis of the key points of conversation in this article.
PROSPERITY AND LIMITATIONS: HOW SESSION ONE PAVED THE WAY FOR AN INTERESTING DEBATE IN SESSION TWO
Throughout the first session of the event both Bridget Outrim, Director of Logistics & Industrial at Savills and Claire Williams, Associate at Knight Frank, illustrated how thriving the industrial and logistics sector currently is – a point that few in our industry would argue against.
Bridget showed a graph that outlined how London’s industrial values have increased 175% since 2017, concluding that in some parts of London industrial land is more valuable than sites for housing. Claire posed the question “how much space is needed?”, and summarised the findings of Knight Frank’s latest research which determined that for every one billion of online sales, we need 320,000 sqm of last-mile industrial and logistics space. Which means in total, we currently require 10 million sq ft of space in and around London to facilitate our city’s ecommerce spending, which is growing year-on-year.
In terms of forecasts, Claire clarified that industrial and logistics land value growth is expected to slow slightly, but a rise of 30% is still predicted for the next three years. She explained that while there are potential risks to the industrial and logistics landscape for the future, with the challenges other property sectors are currently facing, the sector is still seen by investors as a promising investment.
The prosperity highlighted was all well and good, however there was one key question raised in the first session which drove a considerable amount of the debate for the second session – what do industrial and logistics buildings of the future look like and how realistic is it that the co-location sector can thrive?
Bridget questioned the viability of multi-storey due to build costs and was adamant that co-location was not desired by occupiers and could never prosper in practice. She believed that the only way it was ever going to be accepted was on large masterplans of over 10 acres, yet the uses would have to be segregated on the site. Vertical buildings with residential above industrial was certainly out of the question! Claire, while less steadfast, agreed with Bridget that the challenges of both propositions were overbearing. Yet, this is a point I personally disagree with and was quick to say so when my chance arose in the second session.
TRANSPORT, POLICY AND DRIVE FOR CHANGE: A DIFFERENT STANCE FROM MANY OPINIONS PROPOSED IN SESSION ONE
In the second session I was joined by Dr Polyviou Polyvios from Transport for London, Catriona Fraser from Turley and Anna Sinnott from Be First.
Dr Polyvios, who specialises in freight and city planning, took to the stage first and discussed the challenges that Transport for London and policy makers currently face with regard to the considerable increase in ecommerce and last-mile delivery recently. Where reduction in vehicle traffic is not always possible, he stressed the need to make it more efficient and sustainable. He also outlined the strategies currently being considered to achieve this. Safe, clean and efficient land use was a core part of his presentation, with health and safety as a forefront consideration.
Catriona Fraser, Head of Planning London at Turley, was the first in the second session to enter the co-location debate. Presenting an array of statistics from Turley’s new research, she rightly pointed out that with predicted housing need over the next 10 years being 500,000 units and industrial space requirements escalating, as outlined in session one, mixing industrial and residential uses has got to be inevitable in some form. She presented a map of London that showed where co-location was already happening and explained that these schemes needed more airtime to give further confidence to the market. Catriona also referenced the vertical versus horizontal co-location debate, citing that the architects presenting at the event – myself, and Tom Alexander from Aukett Swanke – have a considerable challenge on our hands to design innovative co-location schemes that work for clients, occupiers and policy at present. I don’t disagree.
Anna Sinnott, Director at Be First, which is an urban regeneration company wholly owned by Barking and Dagenham Council, made a headline comment in the first few minutes of her presentation that I strongly agree with. She said “We need to be leading by example, not led by the industry”. This is a point I am constantly debating with colleagues from across the wider industrial and logistics sector. If building design is led by the current needs of the industry, we will never move forward. We need to be pre-empting needs, based on the vast research around how technological innovation is advancing. Occupiers’ needs will be different in four years’ time, when the current buildings we are designing are delivered, so if we are solely led by the current market then these buildings may not be fit-for-purpose upon build. The onus is on us as architects and the planners who control policy to drive the industry forward. Anna also described how schemes should be “knitted into existing urban neighbourhoods”, which again brought us back to the debate on horizontal and vertical co-location and how misconceptions of the notion are hindering progress.
PERCEPTION, OPTIMISM AND MISSED OPPORTUNITY: THE HEADLINE RESULTS OF OUR CURRENT INDUSTRY SURVEY
When it came to my own presentation, I wanted to discuss the results of an industry survey that Chetwoods recently conducted across the market, which over 100 developers, agents, consultants, occupiers and industry professionals had contributed to – over 75% of whom were director level or above. While some of the results had been expected, others had taken me by surprise.
For example, 72.5% of respondents said they either would, or would potentially, consider living in close proximity to an Industrial Intensification scheme – a strong positive, one which we may not have seen a few years ago. Also, 62.3% of respondents expect to see an industrial and logistics scheme going over three floors in under four years, and 55.1% of respondents expect to see a multi-level logistics unit served by goods lifts only in under two years – both statistics proving that the industry sees change as imminent.
Yet, there was one statistic that arose from the survey which I was deeply disappointed with. When our respondents were asked to rank a range of property sectors in order of their suitability to be co-located with industrial and logistics sites, residential came in last place. Not surprising some may say, especially those adamantly against co-location, but for me this answer shows the misunderstanding of the concept. What type of scheme was our survey audience picturing in their mind when they answered that question? Because it’s certainly not the innovative new co-location schemes that are making their way through the planning system at present, such as U+I’s Morden Wharf which combines industrial space with 1,505 homes, creating a cohesive community with a large new riverside public park. At Chetwoods we designed the commercial element of the scheme, which was granted planning consent in autumn 2021.
I believe those who think co-location can’t work are focussed too much on the challenges in the industry that are present right this minute – such as diesel HGVs and reversing alarms, emissions from vehicles and the public living in close proximity. Yet, outdated notions of industrial areas are simply standing in the way of opportunity. Technology can solve every concern I list above, and more. HGVs are going electrical: Amazon launched a full fleet in Milton Keynes this March. Technology already exists that stops vehicles in their tracks and prevents them from colliding; this would avoid the need for reversing alarms and prevent accidents with pedestrians. The answers are all there, and through clever design solutions I believe that industrial and residential can both thrive as co-located uses – so why can’t we be braver as an industry and face that fact? For me anyway, that was the key question of the day following the event.