Online sales in the UK rose from £52bn in 2015 to £60bn last year, according to the Centre for Retail Research, a rise of 13%, with the UK spending more online than any other European country.
But what if this system started to clog up? What if Christmas morning came and went, leaving disappointed faces as presents sat in warehouses hundreds of miles away? What if restaurants had a restricted menu due to lack of supplies?
This is the scenario London faces if its infrastructure cannot keep pace with population growth, and it’s why SEGRO has launched a report, Keep London Working, explaining the scale of this problem.
King’s Cross, White City and Stratford are just three of the industrial heartlands lost to London in recent years, replaced by important and successful mixed-use regeneration projects.
But there are dangers in allowing this change of use to go too far. While new homes are important for Londoners, it is crucial that people have places to work as well.
And with e-commerce growing at an inexorable rate it is also vital for London to plan for the changing needs of businesses serving its population.
The last London Plan produced by the Greater London Authority expects 1,200 acres of industrial land to be converted to alternative uses between 2010 and 2031. That’s equivalent to the size of Park Royal, three Slough Trading Estates or, if you prefer, 700 football pitches.
Research carried out on behalf of SEGRO has shown that all of the land targeted to be released by 2031 will in fact have been used up by the end of this year. This presents a massive challenge for the capital.
There are signs that this crisis is being recognised by the GLA. Deputy mayor for planning, Jules Pipe, told a City Property Association and Westminster Property Association audience at City Hall last week that they need to understand that industrial land must be protected.
But we are calling for industrial land not only to be protected in the London Plan, but also for a strategic review of London industrial land to be carried out urgently.
According to planning consultant Turley, which wrote the Keep London Working report, further losses of industrial land are expected across all London boroughs, with the greatest losses planned likely in Newham, Greenwich, Bexley and Wandsworth.
The boroughs which have experienced the greatest losses of industrial land to date are Newham, Havering and Tower Hamlets.
As well as Londoners facing the inconvenience of deliveries being delayed by a lack of warehouse space, and the negative impact on the capital’s productivity, there is a deeper human cost to the loss of industrial land as well.
Keep London Working shows that, far from the traditional image of these jobs being low-paid and part-time, the majority are full-time and paying salaries 40% higher than the national average. Under the current rate of industrial land decline in London, 7,800 jobs a year or 3,000 potential new businesses will be lost every year.
Therefore, we believe there also needs to be a comprehensive demand assessment, because at the time the existing London Plan was drawn up there was little anticipation of the explosive growth of e-commerce.
A key part of this assessment must be urban logistics and last mile requirements, as well as an understanding that warehousing can also form part of an intensification of uses on other sites.
We cannot overlook the vital part played by the industrial and logistics sectors in London’s modern economy. Sustainable communities require both homes and the right infrastructure to provide jobs. We need to Keep London Working.
David Sleath is chief executive, SEGRO
