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Unlocking the Opportunities for Co-Location

15 July 2022

Our assessment is that the co-location concept has great potential to alleviate land use pressures and address the practical challenge of enabling residential development

Paul Galgey Associate Director London

The ability for housing delivery in London and beyond to keep pace with continued demand faces the significant added pressure of rising industrial land values. Driven by changing consumer and operational trends accelerated by the pandemic, the demand for industrial space and last-mile logistics facilities shows no sign of letting up.

This upward trajectory is placing Local Planning Authorities in a precarious position whereby sites identified as being suitable for residential development can potentially no longer be relied upon to stimulate housing delivery at the levels expected. Industrial operators are now able to compete with – and potentially outbid – residential developers for sites, when historically it was the housebuilders who had the upper hand. This trend might be particularly challenging where, for example, industrial sites are identified for intensification with new housing, but are more profitable if they remain in their existing use.

The solution that has been widely promoted is that of “co-location”: the so-called “beds on sheds” typology of stacking housing on top of industrial space. Co-location is promoted through Policy E7 of the London Plan and marks a ground-breaking concept of intensifying under-utilised land to optimise planning gain through mixed-use development. We are increasingly seeing Local Plans promote their own co-location policies, with some looking towards masterplan zoning principles to introduce the fledgling concept on a wider scale.

However, Planning Potential’s ‘on the ground’ experience shows that there remains a reticence around permitting co-location schemes, in part, driven by the lack of “real life” examples in the UK as to what constitutes successful practice. The Greater London Authority has published best-practice guidance on core development principles, but the comfort for planners is invariably seeing real-world examples, of which there are few. Those of us championing the concept as a viable solution to land use pressures point to the approach taken in locations such as Fish Island, Hackney and along the Old Kent Road in Southwark, but it remains the case that until enough schemes have become fully operational, it still feels like a step outside the comfort zone for some planning authorities.

What is the solution? Our experience tells us that LPAs must exercise a more pragmatic approach to the range of non-residential uses that a co-location scheme should accommodate. It should not be necessary to demonstrate that a space is suitable to accommodate a full range of traditional B Class uses, and it is fair and reasonable to limit the range of end-users to, for example, light industrial workshops, safeguarding the amenity of residents above.

The imposition of planning conditions that control hours of operation, maximum noise levels and servicing restrictions does limit the range of operators who can practically occupy the industrial space. Prospective occupiers can determine whether their operations can adequately be accommodated within a co-location scheme, with more intensive operations likely favouring less constrained locations elsewhere.

Local Plans should recognise that not all sites identified for intensification are suitable for co-location. Zoning areas for co-location is potentially too generalised a concept because suitability is generally dependent on site-specific circumstances, demanding a more granular approach to site allocation. The typology works best on sites with flexible access solutions – particularly corner or island plots where industrial servicing can be fully separated from the residential areas. Plot size is also a key determinant on suitability – mixed use works best where there is sufficient room for servicing yards and industrial break-out space and where there are opportunities to create “buffer zones” between homes and non-residential areas – for example through landscaping and amenity space provision.

Our assessment is that the co-location concept has great potential to alleviate land use pressures and address the practical challenge of enabling residential development to keep pace with the clamour for industrial space. However, it requires a refined methodology from spatial planners to identify specific plots where the concept can best be implemented; and a pragmatic approach which acknowledges that not all types of industrial end-user can be successfully married with residential development.