The socio-economic impact of businesses in the railway arches
4.
Industrial space in London
4.1
A key way that the portfolio addresses constraints in the commercial property market is through industrial space, which is the dominant type of space within the portfolio, comprising approximately 51% of total commercial space and 55% of rental value. 27 Industrial space has remained the dominant type of space since the acquisition of the portfolio from Network Rail, with The Arch Company continuing to support a wide range of businesses and organisations.
Pressures on industrial space in London
4.2
In recent years, the amount of industrial space in urban areas has fallen significantly across the UK, largely because of conversion to housing. 28 In London, the amount of land in industrial use has fallen from approximately 8,250ha in 2001 to 6,900ha in 2020, with this decline occurring faster in inner London (inner London saw a 36% decline in space compared to an overall 18% fall). This decline is predicted to continue in future years. 29 The declining stock for industrial space aligns with a period of rising demand. The growth of e-commerce and last-mile logistics has meant that industrial space near consumers and businesses is increasingly highly sought after. Some estimates suggest that already in the UK, more than 500 football pitches worth of last- mile space is required to serve this demand, and this figure is growing rapidly. 30 This last-mile delivery space is crucial to ensuring local economy principles, particularly in the supply chain, are still applied in urban centres, with this type of space being used by businesses across a wide range of industries that support the urban economy. Industrial businesses and industries are crucial to sustaining economies and communities, enabling businesses to meet their supply chain requirements and providing jobs for local residents. However, the cost and availability of industrial space continues to be a barrier to business activity. This is particularly true in urban areas where industrial land faces increasing conversion pressures. In urban areas in particular, industrial and logistics space is being lost at a rapid rate. In London, the city lost 26% of its industrial floorspace to other uses between 2001 and 2023. 31 Similar declines can be seen in each of the largest urban centres in which The Arch Company operate: in Manchester 34% of the city’s industrial floorspace has been lost. In the central areas of cities and towns, this figure is even higher.
4.3
4.4
4.5
27 Of the properties used for commercial purposes, excluding car parks, residential properties, and properties for which the use class is not recorded. ‘Industrial’ encompasses general and light industry, storage & distribution, and vehicle repair and servic ing.
28 Centre for London, 2022. Making Space: Accommodating London’s Industrial Future.
29 Greater London Authority, 2023. London Industrial Land Supply Study 2020.
30 Knight Frank, 2021. How much space is needed to service the last-mile and where is consumer demand greatest?
31 Centre for London, 2022. Making Space: Accommodating London’s Industrial Future.
18
Made with FlippingBook. PDF to flipbook with ease