Industrial land in London: no net loss and SIL policy

Industrial land in London is protected more firmly than in almost any other part of the planning system in England. The London Plan 2021 sets a no net loss principle for industrial floorspace capacity across the capital, applied borough by borough, and it designates Strategic Industrial Locations where other uses are resisted outright. A scheme that proposes housing on a working industrial site is arguing against the grain of the development plan from the first line.

The position is not absolute. Intensification, co-location and substitution all appear in the plan as routes to reconcile industrial capacity with housing delivery. But they are routes with conditions attached, and the evidence base a borough will expect is substantial.

What Strategic Industrial Locations protect

Strategic Industrial Locations are London's reservoir of capacity for industry, logistics and related functions, designated in the London Plan and mapped in borough local plans. They exist because the functions they host, waste management, freight consolidation, utilities, wholesale markets, construction supply, film studios and light manufacturing, need large sites with good road access and tolerance for noise and vehicle movements, and because those sites cannot be recreated once lost.

Within a Strategic Industrial Location, the plan directs boroughs to refuse proposals that would compromise the integrity or effectiveness of the designation. Uses expected there are industrial and related, which in use class terms means B2 general industrial, B8 storage and distribution, and certain sui generis operations, along with ancillary functions serving those uses.

Offices, retail and residential are not expected uses. A proposal to insert them needs either a boundary review through the local plan process or an argument that the site is functionally separate from the designated area, and the second of those is harder than it looks.

The no net loss principle and how it is measured

No net loss applies to capacity, not to floorspace as built. That distinction is the one applicants most often miss.

Capacity is assessed by reference to what the land could accommodate, so a site currently occupied by a single-storey shed at low plot ratio is not assessed on that shed. The question is what industrial capacity the site could provide if developed to a modern standard. A replacement scheme that re-provides the existing floorspace on a site that could carry twice as much may still represent a loss of capacity in policy terms.

Boroughs are grouped in the plan according to whether they should retain their industrial capacity, provide additional capacity, or allow limited transfer of industrial land to other uses, and the group a borough sits in changes the conversation completely. Check that categorisation before any option appraisal, because it determines whether release is even a conversation worth having.

Measurement is normally expressed in floorspace terms with plot ratio and yard space considered. A scheme that re-provides floorspace but removes the yard, the service access or the vehicle circulation has reduced functional capacity even where the square metres balance, and a borough's employment officer will say so.

Intensification, co-location and mixed use

Intensification means getting more industrial capacity from the same land, usually through multi-storey industrial buildings, deck access, stacked units or better site layout. It is the route the plan prefers, and it works best on sites with good access and enough depth for servicing.

Co-location means industrial and residential on the same site, and it is permitted in limited circumstances outside Strategic Industrial Locations, subject to conditions that are strict for good reason. The industrial capacity has to be re-provided, usually in full and sometimes with an uplift. The industrial floorspace has to be usable in practice, with the servicing, yard space, clear heights, loading doors and hours of operation that occupiers actually need. And the residential element has to be designed so that it does not constrain the industrial use, which is where the agent of change principle bites.

The practical test for co-location is whether a real occupier would take the industrial space. Units with 4 metre clear heights, no dedicated yard, shared access through a residential courtyard and restricted delivery hours do not let, and boroughs have become adept at spotting them. Design the industrial space first, then fit the housing around it, and expect to evidence the specification against market requirements.

Noise is the other half of this. An noise impact assessment for a co-location scheme has to address noise from the industrial use into the proposed homes, applying the agent of change principle so that the cost of mitigation falls on the new development rather than on the existing operator.

Locally significant industrial sites

Below the strategic tier, boroughs designate their own locally important industrial sites and identify non-designated industrial land. Protection is real but less absolute, and the local plan policy wording governs.

For these sites the argument usually turns on demand evidence. An employment land assessment is the document that carries it, and it needs to address current occupancy, rental levels and trends, vacancy rates in the local market, the site's physical suitability for continued industrial use, and the borough's own employment land evidence base. Where the borough has recently adopted a local plan supported by an industrial land study, arguing against its conclusions requires better evidence than a single agent's opinion.

Marketing evidence is usually required as well, and the same scrutiny applies as in any other marketing test. Realistic terms, an appropriate period, agents who actually deal in industrial space, and a full record of enquiries.

Evidence required to justify release

A release case that gets taken seriously normally contains all of the following, and a case missing any one of them tends to fail at officer level:

1. A site capacity study showing what industrial capacity the site could deliver if intensified, drawn rather than asserted.
2. A viability appraisal testing the intensified industrial option honestly, including abnormal costs and realistic industrial values.
3. Marketing evidence over a meaningful period at terms an industrial occupier would accept.
4. Market evidence on supply and demand in the relevant sub-market, referenced to published studies rather than assertion.
5. Where re-provision is proposed elsewhere, a mechanism securing it, because an unsecured promise of capacity somewhere else carries little weight.
6. An assessment of the economic consequences of the loss, which is where an economic impact assessment covering jobs, supply chains and displaced occupiers does real work.

Timing matters too. A release argued during a local plan review has a route that a release argued through a planning application does not, and for a large site the plan-making route is often faster in practice even though it feels slower.

Where a borough plan takes a different line

Borough local plans sit alongside the London Plan, and the development plan is read as a whole. Some boroughs apply tighter protection than the London Plan requires, designate additional local sites, or set their own re-provision ratios for co-location schemes. Others have identified specific areas for managed transition through an opportunity area framework or an area action plan.

Read the borough policy first, then the London Plan, then the borough's industrial land evidence base. Where the two plans differ in emphasis, the borough's more recent adopted policy will usually be the one the case officer applies, with the London Plan as the strategic context. And where an opportunity area planning framework covers the site, its industrial capacity assumptions are the starting point for any negotiation.

Note: this article covers the London position. Outside Greater London, industrial land protection runs through local plan employment policies and national policy on the supply of employment land instead, and the designations described here do not apply.

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