Can London accelerate delivery of homes on former industrial sites?

City Hall's head of planning has signalled a new approach to facilitate the release of industrial land for new homes, pledging to concentrate on sites that have good public transport connections.

Industrial land: City Hall planning chief moots "more rigorous approach" to releasing sites for housing
Industrial land: City Hall planning chief moots "more rigorous approach" to releasing sites for housing

The capital’s deputy mayor for planning, Jules Pipe, has indicated that a "more rigorous approach" will be applied to releasing industrial sites for housing in the next London Plan – due to be published in draft form next autumn – as part of efforts to double the level of new home delivery. Pipe also said that City Hall is considering the idea of "land swaps" between London boroughs and other South East districts to free up housing land in the capital but retain space for business nearby.

Pipe’s comments, made at last month’s Planning for Housing conference, explicitly referred to surplus industrial sites with good public transport connections. This reaffirms guidance in the current London Plan, which says the release of surplus industrial land "should be focused around public transport nodes and town centres to enable higher-density redevelopment, especially for housing" and makes specific reference to land in the Thames Gateway and parts of north London.

Research published by the Greater London Authority (GLA) in March estimated that the capital has 6,976 hectares of industrial land, approximately eight per cent of which is vacant. However, the Industrial Land Supply and Economy Study 2015, led by consultants Aecom, also noted that over each of the preceding five years the capital has released around 105 hectares of industrial land for other uses, almost three times the recommended annual rate of 37 hectares identified in the GLA’s Land for Industry and Transport supplementary planning guidance.

City Hall sources said that eastern parts of the capital "on either side of the Thames" are seen as having the greatest potential for the land releases referred to by Pipe. The Aecom study found an average vacancy rate on industrial land of 12 per cent for east and south-east London boroughs. Newham had a 20 per cent vacancy rate.

A background briefing given to Planning suggested that low-density sites in class B2 general business and class B8 storage and distribution use are prime candidates for Pipe’s vision of creating new housing sites. Boroughs have mayoral targets for industrial land release, but also have discretion to make their own decisions within national planning policy guidance.

Planning was told that London mayor Sadiq Khan is currently exploring ways the revised London Plan could support the "selective release" of sites, as well as working with councils through the wider South East Summit process to identify "locations where there could be mutual advantage to the region as a whole" by reconfiguring the distribution of land for industry and other uses.

The City Hall source also suggested the land-swapping referred to by Pipe could entail some "leapfrogging" from inner to outer London, that this could ultimately extend beyond the city’s boundaries in cases where relocated activities could contribute to the economy, and that not all of the industrial sites earmarked for release would be "disused".

Commentators said they expect the release of industrial sites for new homes to continue and will be interested to see what new approaches emerge. But they pointed to the need for the capital to ensure that it maintains enough industrial land to meet demand.

Rory Brooke, a co-author of the Aecom report, is now head of economics in the planning division of real estate specialist Savills. He said it isentirely foreseeable that the capital will soon get to a point when it needs to prevent further release of industrial land, but that ultimately the balance of housing against employment space is a weighing exercise for the mayor.

"There are firms, such as SEGRO, who are developing industrial sites in the city," he said. "The issue going forward is at what rate should land continue to be released." Brooke added that industrial sites in close proximity to Crossrail 2 stations are likely be of key interest to City Hall as potential housing locations.

Amy Gilham, associate director for economics in London at consultants Turley, said it is important to recognise that some key industrial functions, such as so-called "last mile" logistics, cannot be based outside the capital. "The GLA needs to take a proactive approach in identifying which industries can and can’t be relocated," she said. Both Gilham and Brooke said they could envision a situation in which the industries that stay in the capital are those predominantly confined to serving the city’s own needs.

Mike Kiely, chairman of the board at the Planning Officers Society, said the 2012 Olympics showed that it is possible to successfully relocate businesses to free sites up for other uses. "It may well be that there are areas that are successful industrial areas but which would make more sense to be used for housing," he said. However, he cautioned that businesses dependent on a localised workforce could be ruined by poorly thought through relocations.

Clare Loops, planning and housing strategy manager at the London Borough of Bexley, said her authority is meeting its annual target for the release of industrial land and looking to do more, with industrial sites in the borough’s two London Plan-designated opportunity areas seen as most suitable for release. "Additional connectivity from river crossings, together with an extension of Crossrail eastward of Abbey Wood, is key to unlocking the full growth potential of the north of the borough," she said.

Loops said the borough would consider land-swap talks with nearby authorities, but cautioned: "It would be important to ensure that the housing and jobs markets are in close proximity or well connected to remain relevant for people living and working in the area."

Brooke said he could see the potential for land-swap agreements in industrial corridors such as the Lea Valley, where sites closest to central London could be given over to housing. Gilham said the potential to make business rates gains could be one attraction for councils offering up land for business use.

Janice Morphet, visiting professor at the Bartlett School of Planning, said she believes that ageing and underused out-of-town retail parks in outer London could offer better potential for change of use than some industrial sites. "They usually have good public transport links," she said. "This makes them much more appropriate for housing."

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