The demand for industrial space in the UK has risen dramatically over the past few years due to the explosion of e-commerce. Online sales made up 26% of retail sales in October 2023 compared to 19.1% in October 2019, according to the Office for National Statistics, and despite the cost-of-living crisis affecting consumer spending, when consumers do spend online, they usually expect fast deliveries.

That’s creating demand for warehousing units in prime distribution areas like Mitcham, south London. Here, Kingston Space Property (KSP) has acquired an 11-acre industrial site and an adjoining 2.5-acre site to create a new, sustainable prime urban logistics park, and we have been working with KSP on the transport infrastructure which is needed to unlock the development potential of the two sites.

Electric vehicles (EVs) have a part to play at sites like this, helping to make deliveries more sustainable. In city centres, electric cargo bikes can be added to the mix for last-mile deliveries. As they don’t have the same capabilities as a diesel-powered or an electric van, the base they run from and to needs to be closer to city centres, which means industrial use is going to creep further towards city centres.

 

 

Consolidation centres (where multiple deliveries are consolidated onto a single vehicle before they reach a city centre) could also dramatically reduce the amount of van mileage within urban areas. However, putting in place a successful consolidation strategy can feel like trying to squeeze a square peg into a round hole – it goes against the way that delivery habits have evolved organically in city centres.

 

We recommend to our clients that when tenants sign up to occupy part of an office building, they should place orders through the facilities management team of the building. That means instead of multiple deliveries of milk from different suppliers, for example, there is one delivery from a single supplier. That strategy works best when it’s a new building rather than an existing operational one, and although that means change will happen on a small scale initially, suppliers could start to take note of new delivery patterns, leading to greater use of consolidation centres.

 

 

The significant loss of industrial land to residential, coupled with the rise of online deliveries, means that multi-storey or multi-level developments are likely to become commonplace in the near future.

In Asia and some parts of Europe these types of schemes are already prevalent and successful, and examples are now springing up in London.

 

Industria in Barking provides 45 industrial warehouse and creative space units across multiple levels, and SEGRO V-Park Grand Union, a light industrial multi-level space in Park Royal, was completed in April 2024.

 

These developments change the nature of how the industrial market operates. They include shared meeting rooms, breakout spaces and wellness spaces. In terms of transport, there is a shared yard or loading area for HGVs, EV charging points and cycle parking or storage.

 

 

Co-location, also known as ‘beds and sheds’, with industrial land use on the ground floor and residential use on top, continues to be seen as a challenge with varying degrees of success in London. The two uses are seemingly incompatible, and it’s about finding a way to make them work in harmony.

 

The latest fire regulations for residential markets, which have implications for the height of certain buildings, will make the concept more challenging, and we agree with Turley’s report Co-Location in London: Is it still stacking up? that it has been a testing time for co-location as a concept. However, as that report concludes, the more that co-location is seen to work in practice, the more that confidence in the concept may grow.