Navigating the landscape of affordable industrial workspace
By Luke Thrumble, Head of Planning at Glenny
London’s industrial landscape is undergoing a transformation, driven by increasing demand for the delivery of ‘affordable’ industrial workspace (AIWS), under both London-wide and borough-specific planning policies.
This shift reflects a growing recognition that the rising cost of industrial space can be a barrier for industrial start-ups, charities, and other organisations with limited financial resources. While the concept of ‘affordable’ workspace is well-established for office space, it is relatively new for industrial developments – but one that is quickly gaining momentum.
The Greater London Authority (GLA) has been instrumental in driving this change, and its commitment to fostering an inclusive and accessible industrial sector is evident in its latest planning draft policy guidance, which emphasises the inclusion of AIWS in new industrial developments. This stems from the understanding that facilitating access to affordable workspaces can provide vital support to businesses and organisations that need it most. Start-ups, for example, often lack the funds to secure market-rate workspace, and AIWS offers the space they need to grow, driving innovation and entrepreneurship. Similarly, it enables charities and not-for-profit organisations with limited budgets to continue their vital work in supporting London's communities.
The GLA's push for AIWS is gaining traction across London boroughs, with several already incorporating AIWS provisions into their local planning policies, either in adopted or emerging plans. This borough-level implementation is testament to the growing acceptance of AIWS as a crucial element in creating a more equitable industrial landscape.
The implications for developers
While the positive impact of AIWS on business and communities is clear – it cultivates an industrial landscape that fosters economic growth while ensuring inclusivity and accessibility – it also presents a considerable new challenge for developers and future developments.
While the policy framework is evolving, successfully implementing AIWS provisions is not always straightforward. For many large, single-unit warehouse developments, for instance, incorporating on-site affordable workspace may not be practical or financially viable. In fact, without careful strategic planning, the inclusion of AIWS could hinder viability, especially when dealing with tight margins or complex site requirements. While the GLA does suggest offer flexibility, such as off-site delivery or payments in lieu of provision, these options vary across London Boroughs.
For example, Barking and Dagenham requires 35% of floorspace to be allocated to AIWS for developments exceeding 1,000 square metres, while Barnet mandates only 10% for comparable developments. The definition of ‘affordable’ varies significantly by location, too, directly affecting the financial planning of a development. Some boroughs, like Barking and Dagenham, define affordability as a set percentage of market rent, but others leave it open to negotiation, further increasing uncertainty for developers. Similarly, the duration of the affordable workspace designation can differ, ranging from five years in Havering to perpetuity in boroughs like Barnet and Enfield.
This lack of clarity and consistent guidance can create challenges for long-term planning and investment. As AIWS continues to gain prominence, it will become an increasingly critical consideration for developers – one that should be considered at the very early stages of any development appraisal.
Developers must be proactive in understanding the nuances of local requirements, by engaging with planning authorities as early as possible, before significant investment is made. Consulting borough-specific guidance and conducting feasibility studies to assess the financial impact of AIWS provisions early on can help prevent planning delays and unexpected costs, while ensuring that developments are carefully tailored to meet local needs. In this way, it is possible to deliver schemes that are beneficial to all and contribute to building an accessible and thriving future for the sector.
