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The value of industrial land in London

Working Space: Does London have the right approach to industrial land?

The value of industrial land in London

“Just having housing is not sustainable…a fair, equitable and desirable city has a synergy between different uses”- Director, architectural practice

Practically every aspect of city life is supported by industrial land – and some of these essential activities need to take place within London.

As London continues to redevelop land for the homes it needs, industrial infrastructure plays a complementary role in supporting and servicing these residential developments – whether it’s the concrete batching plants essential for constructing homes, the recycling sites that deal with household waste, or the warehouses that store the goods we need. Whilst not all of these functions have to take place in London, as the city moves towards the net zero carbon, having industrial sites close to neighbourhoods and other centres of demand for goods and services will be essential in order to  optimise the mobility of goods, reduce congestion, deliver alternative transport modes, and develop a more circular/zero waste economy. On top of this, industrial activities provide a wide range of jobs. Though less obvious, industrial activities also support London’s cultural life. For example, behind the scenes of an institution as internationally renowned as the Barbican Arts Centre is a network of set makers, food and drink manufacturers, printers, lighting specialists, logistics businesses and more that allow the venue to function. 17

The economic and employment benefits of industrial land

Industrial activities support the functioning of London’s economy and create employment. In 2019 industrial jobs in manufacturing, construction, wholesale and repair, and transport and warehousing sectors comprised up to 12 per cent of overall jobs in the capital. 18 The total gross value added (GVA) of these sectors amounted to £78.1 billion in 2017, roughly 16 per cent of London’s GVA. 19 Limits to industry codes, such as the UK Standard industrial classification of economic activities (SIC) used to define ‘industrial’ jobs, means that these figures will change depending on what sectors are understood as industrial. Park Royal alone, one of London’s largest industrial sites which hosts many, diverse small and large businesses, is estimated to generate approximately £3.5 billion GVA per year. 20

Industrial land supports the growth in jobs within sectors critical to servicing and supporting London. Whether it’s mechanics repairing cars, manufacturers developing vaccines, or fashion designers and tailors working in the East End – these different types of jobs benefit from access to industrial land within or close to the city. Between 2015 and 2019, employment in food manufacturing in Greater London grew by 48 per cent, construction by 35 per cent and logistics, warehouse and distribution by 23 per cent. 21 Additionally, the shift to a circular economy, which will involve a reduction of London’s waste could lead to around 40 new facilities to reuse, repair and remanufacture materials, and create up to 12,000 new, green jobs. 22

While the number of jobs that industrial land supports is important, so too is the range of employment it provides. Certain activities such as heavy manufacturing may have declined, but this has given way to a diversity of both high- and low-skilled jobs that attract different talents.

Industrial jobs also provide routes for career progression, and training opportunities for Londoners with low or no qualifications. Such opportunities can be particularly valuable in areas surrounding industrial estates that experience high levels of deprivation. Because industrial land is more distributed across the city than office space, and thanks to the diversity of operations that take place on industrial estates, industrial land supports a wide range of entry level jobs. For example, micro mobility logistics operators such as Pedal Me provide entry-level jobs that require specialist skills by offering an extensive four-year training programme in partnership with the City of London Corporation. 23 Troubador Theatres film and TV studio is another example of local contribution to employment and skills development. The studio, which will be built as part of the development of Meridian Water, will also host a skills academy that will provide training for residents on how to work in the film and television industry. 24

Meeting London’s environmental goals

The Mayor has committed to reach net zero carbon emissions in London by 2030, as a critical step in addressing the climate emergency. With a fifth of London’s total carbon emissions coming from road vehicles, decarbonising road transport is a major part of this agenda. 25 Transport for London identifies the loss of industrial land as one of the main drivers of the increase in vehicle kilometres travelled by vans to deliver the same value of goods and services. 26 A senior member at one of the UK’s largest trade associations emphasised to us that in order to ensure speedy and greener freight movements, especially as online shopping increases, London will need suitable sites for micro-consolidation and to support the transition towards electric vehicles. London now has close to 6,000 electric vehicle charging points, leading the way among other European cities. 27 However, the capital will need well-located land and depots to house the number of vehicles needed, and these vehicles will also need to be serviced and maintained. 28

The availability of industrial land in the future will also help the capital achieve the other prongs of its environmental strategy. The London Plan’s target for net-self efficiency by 2026 (i.e. 100 per cent waste managed within London) requires the protection of existing waste sites as well the provision of new ones. While the shift to a circular economy will see a reduction of London’s waste, according to the London Infrastructure Plan 2050, this will require investment in new facilities in order to reuse, repair and remanufacture materials. 29

The operations of certain industrial activities also support the city’s wider environmental goals. Crucially, industrial space hosts the construction businesses that will participate in greener construction and the much-needed retrofit revolution. Some industrial uses can generate low carbon heating – for example the excess heat generated by data centres has the potential to supply district heating systems. 30 As other industrial sectors evolve and achieve their own sustainability goals, increased data centres and broadband connectivity will also be vital for technological innovations such as robotics and data sharing platforms needed to ensure more efficient operations.

Sustaining innovation in science, technology and culture

London is a world leader in science, technology and creative sectors, and innovation in these sectors either requires access to, or is supported by industrial land in the capital. Industrial sites traditionally offer affordable areas that sustain London’s innovation and creative scene, act as an incubator for start ups, and help stimulate the social and professional network that generate creative dynamism and new ideas.

Access to affordable and flexible spaces supports London’s creative and innovative ecosystem – one in which a graduate from one of London’s universities or specialist schools can, through access to people, tools and sites, go on to produce and create within the city. A biomanufacturer we spoke to mentioned that as a young company, a lot of their team are recent graduates in their early 20s and 30s who want to live in the city. While their company had piloted a facility in the south of England, they struggled to find highly skilled workers with the same level of expertise and access to newer knowledge as those they had previously worked with in London. Similarly, makers in Tower Hamlets and Hackney have been explicit about the significance of London in providing access to talent, establishing links with other businesses for both custom and collaboration, and enabling access to markets. 31 Having a wide range of activities taking place within close proximity to one another also means that designers and creators can test ideas quickly. Makers have also highlighted how being located close to residents has enabled them to offer places where communities can come together to share tools and knowledge. From a policy perspective, this proximity could also help revitalise high streets – through the emergence of hybrid light industrial and retail spaces – such as Bread Ahead or makerspaces.

  • 17 We Made That (2017) London Made. Retrieved from: http://www.wemadethat.co.uk/projects/view/london-made
  • 18 Business Register and Employment Survey, London Employment Count (2019). Total number of employment in: manufacturing; construction; wholesale markets; wholesale and retail trade and repair of motor vehicles and motorcycles, logistics, warehouse and distribution, utilities, waste management and recycling, and transport.
  • 19 Greater London Authority (2019) Regional, sub-regional and local Gross Value Added estimates for London, 1998-2017. Retrieved from: https://data.london.gov.uk/blog/regional-sub-regional-and-local-gross-value-added-estimates-for-london-1998-2017/
  • 20 Regeneris Consulting (2016) Industrial Estate Research. Retrieved from: https://www.london.gov.uk/sites/default/files/a01568_industrial_estate_final_report_v2.pdf
  • 21 Business Register and Employment Survey, London Employment Count 2015-2019.
  • 22 ReLondon (2020) Boost for circular, low-carbon SMEs announced as London Climate Action Week highlight scale of challenge. Retrieved from: https://relondon.gov.uk/latest/boost-for-circular-low-carbon-smes-announced-as-london-climate-action-week-highlights-scale-of-challenge
  • 23 Pedal Me (2019) Our Vision. Retrieved from: https://pedalme.co.uk/2019/11/25/our-vision/
  • 24 Construction News (2021) Meridian Water development to feature film studio. Retrieved from: https://www.constructionnews.co.uk/buildings/meridian-water-development-to-feature-film-studio-18-01-2021/
  • 25 London Assembly (2015) Environment Committee- Cutting Carbon in London. Retrieved from: https://www.london.gov.uk/sites/default/files/london_assembly_environment_committee_-_cutting_carbon_in_london_2015_update_0.pdf
  • 26 Transport for London (2019) Travel in London. Retrieved from: http://content.tfl.gov.uk/travel-in-london-report-12.pdf
  • 27 Retrieved from: https://www.london.gov.uk/press-releases/mayoral/london-hits-electric-vehicle-charging-points-miles
  • 28 International Council on Clean Transportation (2020) Quantifying the electric vehicle charging infrastructure gap in the United Kingdom. Retrieved from: https://theicct.org/sites/default/files/publications/UK-charging-gap-082020.pdf
  • 29 GLA (2014) London Infrastructure Plan 2050: A consultation. Retrieved from: https://www.london.gov.uk/what-we-do/business-and-economy/better-infrastructure/london-infrastructure-plan-2050
  • 30 Celsius City (2020) Excess heat from datacentres: Let your Insta-selfies heat your home. Retrieved from: https://celsiuscity.eu/waste-heat-from-datacentres/
  • 31 Cities of Making (2020) Case study report: The Maker-Mile in East London https://citiesofmaking.com/wpcontent/uploads/2021/03/200630_East_London_case_study_report.pdf