UKWA welcomes new ‘Levelling Up’ report from British Property Federation

Levelling Up – The Logic of Logistics, a new report from British Property Federation and Savills, undertaken in partnership with UKWA and a number of leading industrial developers, shows planning policy has restricted development of ‘critical national infrastructure’ for the past decade and that the long-term shortage of supply has suppressed demand for logistics space, particularly in the North and the Midlands.

The report says that demand for logistics space across England has been underestimated in planning policy for a decade, and future demand is likely be at least 29% higher than the levels seen in recent years.

It examines how national planning policy and increased housing targets have restricted the development of space for the logistics sector and finds that additional development could unlock significant additional demand and wide socio-economic benefits, with future demand for logistics space calculated to be at least 42% higher in Leeds, 35% higher in Manchester, 29% higher in Birmingham and 28% higher in Nottingham than current levels.

Commenting on the report, Clare Bottle, Chief Executive Officer of UK Warehousing says, “Warehousing contributes billions of pounds to the UK economy, creating increasingly diverse job opportunities whilst becoming more energy efficient, so the growth of our sector is a good news story for sustainability.  This new report shows how warehousing is also making an important contribution to the Government’s levelling-up agenda, with 70 percent of demand for warehousing property coming from the North”.

Gwyn Stubbings, Planning Director at GLP and Chair of BPF’s Industrial Committee adds, “The Covid-19 pandemic has demonstrated that our industrial and logistics facilities are a key part of the nation’s critical national infrastructure.  Alongside our supply chains, they support the functioning of a strong economy and the way we live our lives by ensuring we have what we need at the right time. They are as crucial as the roads, rail, airport and port facilities needed to move goods around the country.”

He adds, “Enabling the sector to reach its full potential is essential to driving economic growth but our planning system remains a barrier by not allocating enough land in appropriate locations. If the industrial and logistics sector is to play its full part in the economic recovery and levelling up it is vital that we create a more agile planning system which is more responsive to the sector’s needs.”

The report argues that the supply-demand dynamics of warehouse space have been distorted since 2011, with annual take-up averaging 34 million sq ft over that period, 46% higher than the net delivery of new space. This chronic shortage of warehouse space has seen rents rise 61% – more than twice the rate of inflation – and the national vacancy rate stay consistently below the ‘equilibrium’ rate of 8% which is recommended in national and local planning policy.

The British Property Federation has called for greater support for industrial and logistics space as critical national infrastructure within national planning guidance. Its recommendations in its Employment Land Manifesto, published in 2021 included:

  • Binding targets for delivery of employment space, including logistics space, alongside housing targets
  • Introduce a presumption in favour of logistics space where sites meet certain criteria around transport connectivity and appropriate for the development of large buildings
  • Modernise Employment Land Reviews so that real time information on trends such as ecommerce growth inform allocation of land for logistics
  • Ensure logistics is planned for separately to other industrial uses in Local Plans
  • Adaptation of Design Codes to be appropriate for logistics developments

Melanie Leech, Chief Executive of the British Property Federation, concludes, “For over a decade planning policy has underestimated the need for logistics space in and around major population centres to support the growth of ecommerce and create robust and resilient supply chains.  Demand for warehouse space is currently at an unprecedented level, but future demand is likely to be significantly higher as the digital economy continues to expand, and supply chains are reconfigured post-Brexit. It is therefore imperative that we find new ways to balance the delivery of housing with modern warehouse facilities, which will create a broad range of employment and help revitalise regional economies.”

READ full report>

Filed under: News

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