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17 February 2017

Not too long ago, the idea of sleek modern offices or residential sitting above a logistics centre would have been unthinkable. But times are definitely a-changing. A shortage of available land, the demand for high-density urban housing and the unprecedented rise in online shopping have forced a re-think on the shape, size and consolidation of uses for logistics buildings in urban locations.

The growth of e-commerce demands logistics buildings be sited in accessible locations of high population to meet ‘last mile’ delivery for major retailers’ ever-demanding customers. In our recent Property Week article, we argued that logistics should be treated as essential infrastructure in areas of urban expansion to meet the growth of online retail and consumer demand. Urban logistics, we argued, would ensure minimal impact to the local environment and greater supply-chain efficiencies for local communities and businesses.

Yet, whilst consumers now expect cost-effective and speedy same-day delivery, they may not be so keen on living near a logistics park. Tackling the perception that residential and logistics do not mix is a key design challenge. Considering scale in the design of inner-city logistics will make them more appropriate for residential developments and therefore easier to integrate into mixed and multi-use masterplans. Supplied by parcel centres on periphery sites, small-scale micro hubs can consolidate uses, such as click-and-collect or fulfilment centres, reducing the requirement for height as goods will not be stored for long periods.

To mitigate key environmental issues such as noise, air quality and congestion, logistics operators could switch to light commercial vehicles to complete the final-leg delivery or service click-and-collect stations located for consumer convenience. Vehicles could be electric – or at the very least, alternative fuel. This, in turn, will impact upon scale – smaller scale electric vans will not only be cleaner, but will take up far less space and you would no longer require spacious yards to cope with multiple HGV manoeuvres. Smaller scale logistics would also reduce the perceived need to provide expensive and land-hungry mitigation measures such as landscaping and bunding.

We recognise, of course, that land in urban locations will inevitably be expensive. A single, small-scale logistics facility – however attractive it might be to residents – will perhaps not always be the most cost-effective use of land, particularly in areas of high demand such as London and the South East. The advantage of small-scale urban logistics facilities is that they give you space to build above, maximising the value of the site for landowners, developers and landlords. So perhaps rather than thinking about logistics sitting side by side with residential, particularly in space-constrained inner-city sites, we need to start thinking about these buildings being multi-layered, with office space, PRS housing or student accommodation sitting above ground-floor urban logistics facilities.

There are, of course, other hurdles for the industry to overcome if we are to make this multi-use, multi-layered approach work – not least will be the ability of different funding parties to work together in joint venture and with different funding streams for each use element. A good example of this is at St Pancras Way in Camden where student accommodation provider UNITE secured planning consent in partnership with Travis Perkins for a 564-bed scheme over a new trading facility on the ground floor.

The other major hurdle is, of course, ensuring that there is an allocation of employment land close to or within areas of residential expansion, such as in London or the cities of the Northern Powerhouse. This can be done via the call for sites and LDF process. Local Authority land is also available and the ‘One Public Estate’ programme will assist in identifying the best use of sites in these portfolios.

At Stephen George + Partners we’ve already had major success in delivering logistics adjacent to residential where understanding residents’ concerns and addressing them with design solutions enabled us to deliver our clients’, stakeholders’ and the market’s aspirations. {click here to view Dunstable}. However, we need to further educate local authorities, not only on the importance of logistics to employment and the economy, but also on the demands of the 21st century consumer.

James Nicholls, Stephen George + Partners

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