Residential and industrial: not such strange bedfellows after all?

This SPR seminar on “The competition for space: residential vs. industrial” was held on Wednesday, 2nd May 2018 at Savills, 33 Margaret Street, London, W1.

With the supply of land getting ever tighter across many parts of the UK, combining industrial and residential uses in a single development is starting to make sense.

As Kevin Mofid of Savills noted in his introduction, the move toward online shopping has led to growing demand for retail logistics space. At the same time the need for new residential space is also escalating, particularly in and around London. 

Lucy Greenwood of Savills Residential Research explained this problem is being intensified by green belt restrictions on development. The London Plan published in December 2017 is looking to help remedy this by allowing residential to be included in strategic industrial locations.

Given these conditions, mixed industrial-residential projects have now started to appear and can play a valuable role for occupiers and investors alike. 

In the first of two case studies, Martin Meech of Travis Perkins described their redevelopment of an old depot near St Pancras station they had occupied for many years, replacing it with a student housing block and new delivery depot below. As a collaboration with Unite, the student housing specialists, who provided finance and acquired the freehold, the project satisfied the requirements of both parties. But he highlighted the difficult planning process, which had taken two years.  The current Use Classes Order did not help, as the classifications were designed for a world before the internet.

In another example, Segro, have integrated residential and industrial space in their redevelopment of the Nestle factory in Hayes, splitting the site 50:50 between the two uses. Conservation Area status added and extra planning hurdle, explained Steve Lord, but it added value in the long run. Getting residential and industrial to work side by side presents particular challenges for managing transport access and noise, but it helped that the local area already had industrial and residential uses in close proximity.

Darryl Chen of Architects Hawkins Brown noted that industrial-residential mixed use can mean many things, particularly for the ‘industrial’ element, which can stretch from artisan activities through storage to manufacturing. Nearer to the centre of London, limits on available space have led to more vertical mixes along the lines of the Travis Perkins scheme.  Further out there are more possibilities for side by side schemes like Segro’s, which may have fewer design constraints.

The audience Q&A highlighted that affordable housing needs to be factored into any residential proposal.  This can make it harder to get the numbers to stack up.  Still, there was agreement that mixed residential-industrial is an idea whose time has come.

Tim Horsey