“London is an intricate agglomeration and ecosystem, with smaller, medium and large businesses feeding off each other. And that’s what makes the city so special and a powerhouse.”
Director of Planning, business membership group
From the wholesale food markets that keep our fridges and restaurants full, to the recycling centres that manage the city’s waste, industrial land and the activities it supports have an outsize impact on our daily lives. When viewed as a whole, it is clear that they generate many interrelated benefits for London – including access to diverse employment opportunities and a thriving economy. With the climate crisis putting pressure on cities around the world, London will need a sufficient supply of industrial land within the city to achieve the transition to net zero and create enough green jobs for a thriving greener economy. In addition, industrial land also plays a more subtle role in nurturing London’s reputation for innovation, as it provides the space for new ideas and businesses to come into being.
Sustaining the economy
Industrial land supports businesses, operations and infrastructure that contribute to the success of London’s economy. In 2017, jobs in the manufacturing, construction, wholesale and repair, and transport and warehousing sectors accounted for 16 per cent of London’s total Gross Value Added (GVA), worth approximately £78.1 billion. 1 This figure excludes the overall contribution of the diverse range of activities happening on industrial land. It also excludes the economic value of sectors not generally considered as industrial, due to the limits of sectoral classifications.
Additionally, activities that happen in industrial spaces play a vital role in sustaining other aspects of London’s economy. In 2016, a survey carried out across some of London’s major industrial estates found that servicing activities – including cleaning, catering, printing and technology support services – made up 33 per cent of floorspace. 2 These activities maintain London’s homes, offices, shops and cultural venues, allowing the many parts of London’s economy to keep running smoothly.
Providing diverse, local employment opportunities
While the decline of manufacturing and shipping within the city has provided some justification to release industrial land for other uses, 3 London has also seen a recent increase in employment for some types of manufacturing and other activities that rely on industrial land. Between 2015 and 2019, employment in food manufacturing in Greater London grew by 48 per cent, construction employment by 35 per cent, and logistics, warehousing and distribution employment by 23 per cent. 4 The demand for greener jobs and the shift to a circular economy – which will require a reduction in London’s waste – has the potential to create up to 12,000 new green jobs, many of which will be based on London’s industrial land. 5
Additionally, industrial land supports a diverse range of employment opportunities. As mentioned above, industrial estates play host to a wide variety of firms in critical sectors, such as construction, printing and repair – while manufacturers range from vaccine producers to bespoke jewellery makers. These businesses often bring employment opportunities to local residents. The most recent audit of industrial estates in the Upper Lea Valley, which took place between 2012 and 2016, found that 63 per cent of jobs in its industrial spaces went to local people. 6
These sectors also offer a diversity of high- and low-skilled jobs that attract different types of talent. Some are entry-level roles that provide training opportunities and a career path for Londoners with few or no qualifications. For example, micromobility logistics operators such as Pedal Me provide entry-level jobs that require specialist skills by offering an extensive four-year training programme in partnership with the City of London Corporation. 7 Troubadour Theatres film and TV studio is another example of a contribution to local employment and skills development. The studio, which will be built as part of the development of Meridian Water, will also host a skills academy that will provide training for residents on how to work in the film and television industry. 8
Achieving environmental goals
For London to meet its net zero carbon emissions target by 2030, it will need to take significant action quickly. Industrial land located within the city’s boundaries will be necessary to meeting this goal and the city’s sustainability agenda. One area in which industrial accommodation will be essential to reach net zero is the movement of goods and services. Delivery vehicles now make up a fifth of London’s total carbon emissions from road vehicles, and contribute to high levels of congestion. 9 The loss of industrial land within London, and the displacement of warehousing infrastructure, results in more delivery vehicle kilometres travelled to deliver the same value of goods and services. 10 A senior member of one of the UK’s largest trade associations emphasised to us that, in order to ensure speedy and greener delivery movements in London as online shopping increases, we will need suitable consolidation centres near homes and stores to reduce delivery miles. The capital will also need depots in similar locations if deliveries are to transition to EVs and cargo bikes, as space will be needed to house and maintain the number of vehicles required. 11
As London shifts to a greener and more circular economy, the city will need suitable spaces to repurpose its waste and reduce its consumptionbased carbon emissions. Back in 2014, the London Infrastructure Plan 2050 estimated that the capital would need 40 additional facilities for the reuse, repair and manufacture of materials. 12 Industrial land will also support the much-needed retrofit revolution of London’s buildings. And there is untapped potential for activities on industrial land to act as a source of sustainable heating – for example, by using the excess heat generated in data centres to supply district heating systems. 13
A green revolution requires new technologies, businesses and infrastructure that are still being tested and may not even be imagined yet. London will therefore need to ensure it has sufficient industrial accommodation to meet its future needs.
Nurturing London’s spirit of innovation
By acting as an incubator for startups, industrial spaces help sustain an intricate network of creative and innovative sectors. These play an important role in maintaining London’s global status as a creative hub and making the city a desirable place to live and work.
Access to affordable and flexible spaces supports London’s creative ecosystem. With access to people, tools and sites, graduates from London’s universities or specialist schools can go on to produce and create within the city. A biomanufacturing company we spoke to mentioned that, as a young organisation, many of its employees are recent graduates in their early twenties and thirties who want to live in the city. While the company had piloted a facility in the south of England, they had struggled to find highly skilled workers with the same level of expertise and access to new knowledge as those they had previously worked with in London.
Makers in Tower Hamlets and Hackney have also been explicit about the need to be in London so that they can access talent and consumer markets, as well as establishing links with other businesses for custom and collaboration. 14 Having a wide range of activities taking place in close proximity means that designers and creators can test ideas quickly. Makers have also highlighted that being located close to residents has allowed them to offer places in which communities can come together to share tools and knowledge. From a policy perspective, this proximity could help revitalise high streets by encouraging hybrid light industrial and retail venues such as Bread Ahead or makerspaces. 15
Supporting the city through crisis
The impact of the COVID-19 pandemic has highlighted the fundamental role that industrial land plays in keeping the city functioning. Many Londoners have experienced the tension of empty supermarket shelves, while expectations for cheap and fast home deliveries have also increased. Online shopping was at an all-time high during the pandemic, with Internet sales making up 35 per cent of total UK retail sales in February 2021 (compared to just 18 per cent in February 2019). 16 The market is responding to this behaviour. In Q1 2021, industrial space take-up (the amount of space being leased) and investment volumes of third party and “big box” distribution across London and the South East were double the amount recorded in Q1 2020, with retailers and distribution centres accounting for 70 per cent of this take-up. By Q3 2021, ecommerce continued to drive take up of new industrial space. 17 It remains to be seen how lingering changes to the way we live and work will impact on the need for certain types of business in the city’s industrial spaces.
Industrial land clearly holds value for London. However, the need for industrial spaces must still contend with other longstanding priorities for London, such as providing a significant number of affordable and quality homes. While a balancing act between these different uses may be unavoidable, it is important to understand the complementary role that industrial infrastructure and occupiers play in servicing the other types of land use.