_The West London industrial landscape gears up for version 2.0 as winds of change blow

On the verge of a major change, the West London Industrial Market has followed the stale paradigm of large yards and old buildings for the past 20 years.

Tom Kennedy June 06, 2019

Given we're seeing the UKs highest rental levels and a housing squeeze within Greater London, we are in a fascinating period which I believe will bring opportunities for those willing to invest in new technologies that will accommodate the intensification of land use.

The Park Royal industrial area (London’s Kitchen) covers 650 ha of land and is gearing up for the arrival of HS2 and Crossrail. Plans for a ‘Super Hub’ at Oak Common where the two lines will intersect is priming the area for large-scale urban regeneration.

The Old Oak and Park Royal area is expected to accommodate 25,500 new homes and 65,000 jobs, making this one of the largest regeneration projects in the UK.

This intensification of residential and commercial use will force landlord and occupiers to invest in multi-storey warehousing, smarter technologies both within the day-to-day operations and in relation to the transportation of goods in and out of London.

The Heathrow Airport expansion is another opportunity on the horizon for industrial occupiers to be part of the largest transport hub in the UK. With 1.5 million metric tonnes of cargo currently moving through the airport each year and the plans approved for an added third runway, the demand for industrial centres in close proximity to the airport will increase exponentially.

Towns such as Reading, High Wycombe and the Thames Valley which are now within touching distance of London could become an occupier’s most cost effective location allowing for distribution both into London and Heathrow whilst also having access to the rest of the UK.

In the short term, it is going to be interesting to see how occupiers are going to react to the increasing rental levels. With some rents now over £20psf, occupiers are having to pick between prime locations and the cost of distribution. Especially with the improvements in green transport and reduced costs in travel, we may see that once prime locations are now not at top of an occupier's wish list.

The ULEZ (Ultra Low Emission Zone) is only going to add to the relocation dilemma with occupiers needing to use electric vehicles to deliver into central London, but only having the limited mileage available with today’s batteries. It won’t be long until we see the first fully electric fleet here in the UK and as soon as that happens everyone else will have to follow.

Whatever happens with the UKs' political woes over the next year, it is clear that the West London Industrial market is still going to move from strength to strength and even though ‘Crossrail/HS2’ and the ‘Heathrow Expansion’ will throw up challenges, I believe there are going to be some major and exciting opportunities within the sector.

Having been a member of the Knight Frank Industrial team for the past year, Tom Kennedy has recently realigned to work within the West London Team, headed up by Gus Haslam. He has been observing the changes, challenges and opportunities in the West London market.