Over the last two decades London has lost too much of its industrial land. This has led to rising land values and rents:

• In the last 20 years, London has released 23 per cent of its industrial floorspace to other uses.
• The vacancy rate on London’s industrial land has dropped from 16 per cent in 2001 to 4 per cent in 2021. In central London it is as low as 2 per cent. Such low vacancy rates prevent a normal “ebb and flow” in the property market and are a sign of intense pressure on industrial space.
• Some industries and businesses are able to meet rising costs, but smaller enterprises – as well as sectors like repair and recycling – risk being squeezed out.

High demand for land in London means that housing and industrial uses are often seen as being in conflict. But it doesn’t have to be like this:

• London needs land for jobs as well as housing, and industrial land is a major source of employment outside central London.
• Industrial spaces and warehouses are essential when it comes to supporting and servicing our homes. For example, they store the materials needed for construction and maintenance, process the waste we produce, and provide the infrastructure needed to fulfil deliveries.
• Industrial spaces are also critical to meeting our net zero carbon targets and reducing air pollution. 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. London is the densest city in the UK, with many competing street uses such as travel, leisure and residential.

A three-pronged approach is needed to address London’s industrial land shortage:

1. Improve representation

• Industrial activities and spaces are diverse and constantly evolving. However, they are poorly understood and generally undervalued in policymaking and public opinion.
• For their voices to be heard, industrial land occupiers need to set up an independent and influential representative body, including a powerful champion at City Hall and in each borough.

2. Enhance local planning, protection and flexibility

• Around 30 per cent of London’s industrial land isn’t protected by designation. While London Plan policies currently offer some protection, boroughs should take responsibility for protecting London’s remaining industrial spaces through designation and policy.
• Uses of industrial land are highly diverse, and different levels of protection should exist to reflect this variety. London boroughs should also have more flexibility to adapt land use to suit local and current circumstances.

3. Additional provision

• Protecting existing industrial land won’t be sufficient to meet London’s needs, as demand looks set to continue increasing and diversifying. As a result, London will likely need more industrial space – and in new locations, not just existing ones.
• While the market can deliver some of these changes, the Mayor of London and the boroughs will need to step in to intensify the remaining industrial land and support industrial spaces in new locations.

To do this effectively, London government will need:

• New evidence: Too little up-to-date evidence is available on how much industrial space the city has and needs. Not enough is known about its type, quality and affordability. To make informed decisions, London boroughs and the Mayor need to develop a live, granular understanding of the city’s industrial land needs.
• Powers and investment: National government should leave London planners to define the city’s industrial land strategy. Instead, it should  invest in infrastructure across London and the Wider South East that will unlock additional industrial capacity.

Research Methods

Research for this report was carried out using a mixed methods approach. A review of literature and datasets on the supply and demand of industrial accommodation was conducted, as well as a review of policy documents on impacting industrial land. The authors also conducted 20 interviews with industrial land occupiers, local authority planners, industrial land market experts, business lobby groups and architects working on industrial land projects. This report is also informed by a presentations made to the Commission by Avison Young, Studio Egret West and BeFirst. Finally, this report builds on the findings of two Centre for London reports published in 2021, Worth the Weight: Making London’s deliveries greener and smarter and our interim paper, Working Space: Does London have the right approach to industrial land?

What activities take place in London’s industrial spaces today?

London may no longer be the manufacturing and shipping heavyweight of the past, but its remaining industrial spaces still host a rich network of operations and businesses. The diversity of these activities means that attempts to categorise them can be difficult. Standard Industrial Classification (SIC) codes, often used in industrial land surveys and audits, are useful in breaking down employment by sector. But they also mask the interdependence between London’s industrial spaces and the businesses they supply, as well as the fact that some businesses have several functions (for example, bakeries that double up as cafés).

Traditional industrial activities

Some operations are more “traditional” in nature, which this report will refer to generically as “industry” or “industrial activities”. These include manufacturers producing everything from sugar and biscuits to foldable bikes, set props, high-end clothing and bespoke furniture. While large-scale manufacturing is rare in London, there has been a rebound in small-scale or artisanal production, both for consumption within the city and export elsewhere.

Infrastructure

Industrial activities also include vehicle repair and storage for construction materials, as well as other critical and strategic infrastructure that keeps the city functioning. This includes waste management sites, water storage, transport depots/garages, and warehouses that ensure our homes, businesses and shops are supplied with goods. Like manufacturing, many of these activities were once fixed features in London. However, they have had to undergo an evolution to keep up with the city’s growth and changes in consumer behaviour. For example, last-mile logistics hubs and dark kitchens are recent responses to the growing consumer demand for ultra-convenient food and goods deliveries.

Non-industrial activities

Many activities taking place in London’s industrial spaces have little in common with traditional industrial activities – except that they also rely on industrial land. For example, film and recording studios may be located in such areas because they require space on a similar scale. However, many such businesses are difficult to categorise: galleries and artist studios may moonlight as maker spaces (and vice versa), while many such industries have also historically benefited from access to cheaper and more flexible industrial spaces. These activities, and their reliance upon or proximity to other types of operations, can mean that the distinction between “industrial” and “non-industrial” activities sometimes becomes blurred. They also speak to the hybrid nature of the activities themselves, with some businesses blurring the lines between production, retail and community enterprise. Increasingly gaining attention are those activities that “service the services” and play a supporting role in London’s wider economy. These include catering, printing, cleaning, hospitality, security, maintenance, equipment provision and much more. Such industrial activities don’t play an isolated role in London’s economy – in fact, they are critical in servicing London’s homes, offices, shops and cultural / entertainment venues. And while these “support” operations may not specifically need to take place in London, there are many disadvantages in moving them out – such as the economic and environmental impact of longer journeys to provide these same services.