(Commonwealth) _ St. Modwen Logistics, a prominent logistics owner and developer in the UK, together with property adviser Savills, has underscored the need for improvements in the planning system to support the burgeoning logistics sector. The two entities are calling for measures to encourage the development of modern, sustainable warehousing, addressing the escalating demand in this industry. A decade-long analysis conducted by St. Modwen Logistics and Savills has revealed that historical land constraints have constrained industrial demand in the UK by 29%. The national availability of industrial space has consistently fallen below the ‘equilibrium rate’ of 8%, where supply and demand are balanced. This shortage has prompted many rapidly growing companies to curtail their expansion plans, leading to inefficiencies in supply chains. According to Savills, annual demand for new logistics space surpasses the delivery of new units by a staggering 58%.
In response to the UK Government’s call for evidence on the freight and logistics sector and the planning system, St. Modwen Logistics and Savills have put forth five key policy recommendations to enhance the planning system’s ability to accommodate the growth of the freight and logistics sector. Suggest the implementation of a national policy that recognizes industrial and logistics facilities as critical national infrastructure. Introduce guidance that acknowledges the importance of wider supply chain employment and the indirect gross value added (GVA) as part of the broader planning balance. Advocate the use of the Savills/St. Modwen Logistics ‘Suppressed Demand’ Model within national planning practice guidance (NPPG) as the foundation for assessing future demand for logistics space. Propose that local authorities establish five-year employment land supply targets, paralleling their approach to residential land supply.
Favor the reintroduction of a strategic tier of planning to broaden planning authorities’ scope of considerations beyond housing market areas and travel-to-work patterns when evaluating potential new logistics developments. Recommend the implementation of a government-led training program to upskill local government planners, local members, and planning inspectors in commercial markets and the key trends and market conditions influencing future logistics demand. These proposed measures have the potential to empower the planning system to play a pivotal role in facilitating the growth of the freight and logistics industry. The evidence also suggests that between 2011 and 2021, higher-skill roles within the logistics sector increased by almost a fifth (17%), with significant growth in professional occupations, which saw a more than one-third (36%) increase. These roles are typically associated with engineering and technological professions, reflecting the sector’s increasing adoption of automation and robotics. There has also been a rise in traditional office-based roles, with an 11% increase, as more businesses choose to consolidate their operations under one roof, utilizing Grade A office spaces within warehouse buildings.
Richard Hickman, Senior Director of Planning at St. Modwen Logistics, stressed, “Logistics is a high-productivity and high-growth sector and one of the engines of the national economy, supporting an increasing number of high-skilled jobs across the country. The policy changes we recommend would unlock the delivery of high-quality new warehouse space in the locations where it is most needed.” Mark Powney, Director of Economics at Savills, added, “The logistics sector has been the fastest growing commercial sector in the UK for over a decade. Jobs in the sector pay better than the national average across an increasingly diverse range of occupations. It is time the planning system takes measures to plan proactively for commercial uses in order to help our struggling economy. As part of this, improving the way we plan for the strong demand from logistics occupiers must be a major focus.”
