Location, location, location...

LOGISTICS UK joined the British Property Federation, and other membership associations, at the round table hosted by the Department for Levelling Up, Housing and Communities (DLUHC). Whitehall colleagues from the Cabinet Office and the Department for Transport (DfT) were also in attendance. This was a deep dive into the issues which large multinationals and SMEs currently have in finding the right site in the right location.

Logistics UK has been engaging with DLUHC and the planning division of DfT throughout the year, as well as inviting DLUHC to speak to the business group’s Warehouse Working Group at both meetings held so far this year and at a DfT-led planning roundtable in the spring. Data from these meetings confirm that the demand for warehousing has increased dramatically since 2012, with the number of business premises used for transport, logistics and warehousing in the UK having almost doubled in the last decade.

The pressure on availability of warehousing space was already increasing before the Covid-19 pandemic, largely driven by online retail, but has exponentially grown in the past two years, with supply chain pressures encouraging more stockpiling among retailers and manufacturers. At the same time, growth in the number of hauliers and couriers since 2011 has contributed to a sharp rise in new warehouse construction projects as online retailing grows and traditional businesses diversify and expand.  

Vacancy rates for warehousing space have fallen to 2.8%, the lowest ever recorded. However, rising inflation and interest rates are leading to a high cost of borrowing and for raw materials which could stifle expansion and construction plans in the long term. Of particular concern is the growth in operating costs are also increasing, with increased pressure on budgets for transport, energy, and labour.

Logistics UK’s Warehouse Working Group has agreed that a review of permitted development rights is needed to support changes at existing warehouse sites and is something Logistics UK will campaign for. This will enable warehouse operators to make certain changes to existing sites without the need for new planning consent. In addition, Logistics UK intends to work with planning authorities to raise awareness of logistics and help planning officers to understand the value of logistics sites to the local economy and community when making planning decisions. 

Logistics UK is liaising with DfT on stakeholder engagement regarding the upcoming Future of Freight (FoF) planning consultation, which is being led by DFT with DLUHC input, when it is published this winter. Logistics UK will continue to engage with DfT and DLUHC on this work as the government aims to review where the potential for growth exists in the warehousing sector and as the industry considers future challenges and solutions to future growth for warehouse sites, including land use and planning impacts. Separate to DfT’s consultation, DLUHC wants to know how government can help with the current blockages to planning – Logistics UK stands ready to identify the challenges that exist and work with government to identify potential solutions which will assist in futureproofing the industry. 

Alexandra Herdman, public policy manager, Logistics UK

For more information, visit www.logistics.org.uk