51乱伦

The next London Plan will shape how London will develop over the next 23 years (2027-2050). Its early consultation document, 鈥楾owards a new London Plan鈥�, outlines the ambitions of the Next London Plan and the policy ideas proposed to achieve them.

Our research experts have examined these proposals in more detail, exploring their potential impact on housing delivery, high street, industrial land supply, workspaces, and London鈥檚 environmental future.

A NEW APPROACH NEEDED

The Towards a New London Plan consultation report recognises that London鈥檚 current industrial land policies have had limited success. Co-location and intensification have proven more suitable for light industrial and trade uses, but in some cases, they have contributed to the displacement of heavier industry due to incompatibility with housing.

There is now clearer recognition that heavy industry and distribution need greater protection, but policy must consider the sector鈥檚 role within London鈥檚 wider business ecosystem. In addition, recent national planning reforms affecting industrial land must be properly reflected in London鈥檚 strategy.

Reassessing co-location and intensification
Intensification: Not one-size fits all
Industrial intensification鈥攖hrough multi-storey development or reduced yard space鈥攃an improve land use but isn't always viable, or desirable from an occupier standpoint. High build and servicing costs make multi-storey formats feasible only in high-value locations.

Multi-storey industrial (with internal lifts) is typically aimed at light industrial uses, while scope for multi-storey facilities with ramp access to upper floors is restricted by build costs.

Though there have been some successes, several recent schemes have launched into a relatively soft occupier market and take up has been slow to materialise.

Policies of intensification have proved positive, particularly in maximising how light industrial occupiers use space, and in more central areas, however it doesn鈥檛 suit all occupiers/locations.

Co-location: Not stacking up
Since 2019鈥�20, around 4,500 homes per year have been approved in co-location schemes, but less than 40% are under construction or complete. While co-location can work in certain contexts, it typically requires

operational compromises (e.g. restricted hours, vehicle movements) and complex, expensive design solutions.

Residential structures (with lift shafts and dual aspect requirements) are very different to distribution warehouses (large, column-less expanses), there may also be vibrations to consider, and bringing the two together can result in an overengineered structure, at a higher cost that providing the two elements separately.

As such, co-location is best suited to light industrial and trade counter uses, not distribution.

Class E conversions
The current London Plan was built around the old Use Class Order, which distinguished light industrial (B1c) from other uses. Under the revised national Use Class Order, light industrial now falls under Class E, alongside offices, shops, and cafes鈥攎aking it harder to protect this space from conversion. There are also Permitted Development rights associated with Class E, allowing for conversion to residential.

While Class E allows for greater flexibility in mixed-use environments, it also poses risks to the integrity of designated industrial areas. Unchecked conversions could undermine their intended function and gradually shift activity away from dedicated industrial zones, highlighting the need to protect theviability of heavier industrial uses.

WHAT IS PROPOSED?
The Towards a New London Plan consultation acknowledges that the 18% loss of industrial land since 2001 is unsustainable, and maintaining sufficient capacity is vital to supporting London鈥檚 economy.

The focus of the plan is on housing provision and it proposes a strategic, city-wide approach to industrial land, identifying the most suitable areas for industrial use while releasing less suitable sites for housing.

Opportunities include redeveloping lower-quality green belt land (the 鈥済rey belt鈥�) to accommodate industrial uses, freeing up better-connected sites for housing. The plan also suggests de-designating sites that 鈥減erform poorly for industrial purposes鈥�. While it is not clear what this means precisely, the document points to non-industrial uses such as out-of-town retail parks, 鈥�especially where they are near public transport and are not located on the strategic road network鈥�.

Further proposals include consolidating heavier industrial and logistics uses within designated areas, relocating light industrial to town centres or high streets, and  supporting specialist clusters like logistics or green innovation hubs.

Targeting infrastructure, access and connectivity

Towards a New London Plan proposes setting a strategic industrial capacity target for London, similar to how housing targets are set and distributed across boroughs, prioritising areas strategically from across London that best suited to meet a specific industrial need.  For example, locating warehousing, and logistics businesses near key freight infrastructure such as roads and wharves.

This could lead to a dramatic redistribution of industrial capacity, with increased intensification of industrial activity in areas that offer stronger connections to the strategic transport network. As a result, some boroughs will be expected to accommodate a substantially greater share of the capital鈥檚 industrial capacity than others. Balancing industrial capacity with employment and housing targets will present a significant challenge for London boroughs, requiring careful coordination to ensure these priorities are aligned rather than competing.

Assessing site performance
Identifying sites for de-designation or redevelopment will require careful evaluation. The consultation document suggests prioritising road-connected industrial sites while deprioritising those with strong public transport access.

However, London鈥檚 industrial and logistics sector is highly diverse, and not all occupiers prioritise accessibility and connectivity.

Some sites which perform poorly from a connectivity/accessibility perspective, offer a favourable cost profile for occupiers such as SMEs, wholesalers, and service providers.

Retail and alternative uses
The document proposes releasing industrial designations on underperforming sites, particularly out-of-town retail parks and car parks, for housing or mixed uses.

There are examples of retail parks, as well as standalone retail warehouses (typically discount retailers) on industrial land, there are also many automotive retail units.

However, some of the retail or other, alternative uses that can be found on SIL, serve as buffer zones between heavier industry and residential areas - such as automotive retail or discount warehouses on SIL frontages with industrial uses behind.

Grey Belt opportunities
To offset industrial land losses, the plan suggests designating new industrial space in low-quality areas of the green belt; the 'grey belt鈥�. London鈥檚, and perhaps the wider South East鈥檚 grey belt area could certainly offer opportunities for industrial and logistics uses, particularly in location offer strong connections to the road networks in and around the capital

 

TRADING PLACES

Could it work?
The potential for exchanging land or floorspace could work well, there are cases of industrial parks with poor access, or older facilities that are the wrong size or specification for modern occupiers, there are examples of industrial land use where intensification or development of other use classes has diminished the yard space or where traffic regulations or flows have changed diminishing the usefulness of the property.

But the practicalities of how this would work are not explored in the Towards a new London Plan document. It is also expected that this would be a London-wide scheme, so how this may align with borough level plans also needs further exploration.

The reality is, even poor-quality space located on land better suited for other uses, will offer a location and cost profile that would not be possible to replicate. Therefore, this wouldn鈥檛 be a quick/easy solution. Issues of sitting tenants and fragmented land ownership also add to the challenges.

Despite some challenges, allowing this swapping of land could bring opportunity for landlords to drive returns through the repositioning of their assets. Poorly performing retail or office parks may offer potential for industrial and logistics conversions and conversely, some industrial assets facing obsolescence, stranded as industrial assets due to the land classifications, may find a new lease of life as residential development.

Plots in play
Seb Jones in 51乱伦鈥檚 Geospatial team has analysed industrial sites (both SIL and LSIL) and found that 80% of protected sites are within 500 metres of the major transport network (includes Motorways, A roads and wharves). However, 20% of sites, totalling 1,537 hectares (with a total of 3.3 million sq ft of floorspace) are further than 500 metres away from wharves or the major road transport network.

His analysis also found that 328 hectares of industrial land, with a total of 1.5 million sq ft of floorspace, is located in areas of very good public transport accessibility (PTAL 4, or better).

However, there is limited cross-over between the two. Of the sites that are further than 500m from the major transport network, just 27 hectares (or less than 200,000 sq ft of floorspace) are in areas of very good access (PTAL 4+) to public transport.

For some context on those figures, according to the GLA, London lost 352 hectares of employment land 鈥� predominantly industrial 鈥� between 2015 and 2020 (The London Plan鈥檚 release benchmark level was 232 hectares by 2041). Since 2001, London has lost c.1,500 hectares of industrial land at a rate of c. 100 hectares per annum since 2006.

Alternative uses
It is worth noting that not all floorspace located on protected industrial land is in industrial use. We have found a total of 12 retail parks that exist 鈥� either entirely or partially 鈥� on protected industrial land (both SIL and LSIL).

There are further sites that house other, non-industrial uses, such as car parks or standalone retail warehouse stores.

These retail parks or other, alternative uses on industrial land could be 鈥榬eleased鈥� from the protected industrial land designation, which may open up some redevelopment opportunities.

Declassification of industrial land 鈮� Residential development
There are various examples where alternative uses could justify the declassification of industrial land. In addition, sites located away from the strategic road network or with limited access may also warrant reconsideration for continued industrial use.

However, some sites that 鈥減erform poorly鈥� from an industrial land perspective may still fall short in terms of scale or viability for residential development. For example, small, constrained infill sites with limited access and no frontage to main roads often contain low-rise, low-quality buildings. In such cases, surrounding uses are typically in close proximity, meaning that any development at the height or density required for viability would likely have a disproportionately negative impact on neighbouring properties.

Finding potential industrial sites in the grey belt
In exploring opportunities for industrial intensification or relocation within the grey belt, 51乱伦鈥檚 Geospatial team has identified 1,178 hectares of previously developed land in London鈥檚 Green Belt that lies within 500 metres of a major road (either a motorway or A road). Of this, 167 hectares is located within a 45-minute drivetime of Central London. This suggests that finding potential sites should not be difficult.

However, there are obvious concerns over whether this land exchange would simply facilitate and promote the moving of industrial and logistics uses further to the city鈥檚 periphery, thereby driving up delivery times, road miles, emissions and operating costs. However, the consultation document fails to address these sustainability issues.

FURTHER CONSIDERATION NEEDED
Questions over sustainability, practicality and access to employment
The document advocates prioritising residential development on sites with good public transport accessibility, with industrial and logistics uses relocated to areas further out that benefit from strong road connections.

The industrial and logistics sector is often criticised for its contribution to emissions in the capital. However, if planning policy continues to push these uses further from central areas and into locations reliant on road transport, policymakers must take responsibility for the resulting increase in road miles, not only for distribution, but also for displaced trade and support businesses.

To support sustainable delivery modes in the capital, policymakers need to ensure that facilities are located across the capital 鈥� even within central areas 鈥� and that facilities can adequately provide the parking and charging facilities needed for cargo bikes and electric van fleet.

Relocating logistics sites away from public transport and delivery points will not only increase road traffic, but it could also reduce access to employment for those workers who rely on public transport to commute. Public transport often plays a vital role in enabling staff to access industrial facilities in London.

12 Retail parks located on protected industrial land
51乱伦 Insight

As logistics operators transition to electric fleets, public transport accessibility will become even more important. Many drivers will need to leave vehicles charging overnight at depots and may not have home-charging options, further increasing reliance on public transport for commuting.

Individual site assessments are needed
51乱伦鈥檚 analysis of site quantum highlights the volume of sites that could be considered for potential industrial release. While we鈥檝e identified a range of candidate sites, the list is not exhaustive, and individual site assessments remain essential to ensure the most appropriate sites are selected.

There is a clear need to focus on strategic sites capable of delivering housing at scale. The plan should seek to minimise industrial land loss by targeting locations with the greatest residential potential. These are likely to be sites on or near major road networks, particularly where surrounding buildings already demonstrate height and density.

For example, a low-density industrial site with few occupiers, situated adjacent to a major road, could offer substantial redevelopment potential, especially where precedent has been set. By contrast, a similarly sized site in a more residential setting, away from key infrastructure, may struggle to support the scale and height needed for viable development.

This underlines the importance of assessing each site on its own merits, with a strategic approach to land release that balances housing delivery with the protection of industrial capacity.

UNDERSTANDING LONDON鈥橲  INDUSTRIAL REQUIREMENTS
Logistics as a service: Assessing and quantifying need
As household numbers grow, so does demand on the logistics sector, each new home is a delivery point. Yet London has just 55 sq ft of occupied industrial space per dwelling, the lowest in the UK, compared to a national average of 109 sq ft. This reflects land loss, high residential density, and development pressure.

Planners must consider this ratio of industrial floorspace per dwelling when allocating land. There is not just a need to protect the existing quantum of industrial space, but to provide additional space in line with additional housing, both to support last-mile delivery, infrastructure and broader business needs.

With each dwelling in London corresponding to 55 sq ft of industrial and logistics floorspace and 880,000 additional homes needed in the capital over the next ten years, this would correspond to a need for 48.4 million sq ft of industrial space. Vacant stock may accommodate some of this demand but to avoid pockets of high vacancy, it must be the right space provided in the right locations.

While large-scale manufacturing can be located outside London, the capital still needs space for essential functions like last-mile logistics, catering, dry cleaning, and construction storage, many of which support the tourism and hospitality sectors.

Like public services, schools and transport, industrial and logistics infrastructure must be planned for.

While privately operated, delivery networks rely on land shaped by planning policy. As demand grows and land becomes scarcer, clear policy support is essential.

Supporting London鈥檚 economic and housing growth requires protecting and expanding industrial land to meet rising needs and sustain the city鈥檚 wider economy.

 

Target allocations must be demand led
When identifying areas for industrial intensification, planners must respond to patterns of occupier demand. Setting high capacity targets in boroughs with low demand or high vacancy will not meet the sector鈥檚 needs.

Declassifying industrial land in areas with strong demand and rising rents risks fuelling further rental inflation. This was evident in Park Royal, where the redevelopment of industrial land in Nine Elms displaced occupiers westward, contributing to sharp rental growth. Prime rents in West London now exceed £30 psf, up from around £13鈥�14 psf just ten years ago.

Affordability issues are starting to  take a toll on occupiers, which is leading to some relocations out of London.

London has 55 sq ft of occupied industrial space per dwelling
51乱伦 Insight

To align supply with demand, industrial land provision must be strategically targeted. Vacancy rates are especially low in Kensington & Chelsea, Barnet, Bexley, Merton, Hackney, and Hillingdon. Increasing supply in these areas, while rationalising protected land in oversupplied markets, could help ease site shortages and affordability pressures.

Barnet, though on the edge of Greater London, benefits from excellent road links into Central London and proximity to the M25 and A1. While it contains some LSIL, it has no SIL-designated land, making it a strong candidate for additional industrial allocation.

By contrast, expanding industrial capacity in higher-vacancy markets such as Newham or Barking & Dagenham risks compounding oversupply.

It鈥檚 also important to note that high vacancy does not always indicate surplus land. In some areas, vacancy stems from outdated or unsuitable stock, whether in size, specification, or sustainability standards, or from rental levels that outpace local demand.

What type of space? And where?
London鈥檚 industrial space includes a broad mix of uses, from manufacturing and distribution to trade counters supporting the capital鈥檚 construction sector. It also accommodates off-site business operations such as dry cleaners, caterers, printers, office equipment suppliers, coffee roasters, and security firms. This diversity creates demand for a wide variety of unit types and locations across the city.

Distribution requirements
Proximity to the customer is critical for B2C (business-to-consumer) logistics. Ecommerce operators typically allocate 20鈥�25% of their space to last-mile delivery facilities, located in or near urban centres.

In 2023/24, an estimated 450 million parcels were delivered across London, equivalent to one parcel per week per resident, highlighting the strain e-commerce is placing on the city鈥檚 transport infrastructure, contributing to congestion and vehicle miles.

Beyond home delivery, B2B (business-to-business) distribution remains vital. Most retail still occurs in-store and many of London retail units lack on-site storage and thus need frequent restocking. High frequency deliveries necessitate distribution locations that are within close proximity to central locations to minimise road miles and congestion.

West London remains a preferred location for many logistics and business support operators, offering efficient access to Central London. In contrast, poor cross-river connectivity limits the suitability of East London for similar uses. While the Silvertown Tunnel (connecting Greenwich and Silvertown) has improved reliability for some routes, high toll charges have increased operating costs.

Other industrial occupiers
Logistics is just one part of London鈥檚 industrial ecosystem. Space is also required for waste processing, recycling, trade counters, wholesalers, and SMEs offering varied products and services.

Trade counters and wholesalers often favour sites with main road frontage and customer parking, but do not need the height or yard space typical of large-scale logistics. Meanwhile, SMEs may prioritise affordability over access or specification, often occupying more basic units in secondary locations.

A wave of emerging uses, including open storage, film studios, and self-storage, is intensifying demand for industrial land. Planners must take a proactive approach to understanding these evolving needs and ensure policy can accommodate them without compromising space for core industrial activities.

The diversity of demand means a need for various types of units and across different locations and differing specifications.

STRATEGIC COORDINATION, NOT BLANKET POLICY
London鈥檚 industrial land strategy must go beyond broad-brush approaches. While land swapping and intensification present opportunities, they are not universally applicable and come with significant operational, economic, and spatial implications. Some poorly located or obsolete sites may be suitable for alternative uses, but others, even if sub-optimal, provide a location/cost profile that can鈥檛 be replicated elsewhere.

As housing pressure intensifies, policy must not ignore the integral role of industrial and logistics functions in supporting London鈥檚 economy, infrastructure, and communities. A data-led, site-specific approach, that is guided by occupier demand patterns, alongside infrastructure connectivity and accessibility, is essential to strike the right balance between residential delivery and industrial resilience.

Protecting and repositioning the right industrial land in the right places will be key to ensuring the capital remains liveable, productive, and globally competitive.