Repurposing empty urban spaces: an opportunity to develop last-mile logistics hubs

The City of London has vowed to decrease the impact of freight vehicles by delivering three last-mile logistics hubs this year and a further two by 2025. The draft local plan, City Plan 2036, states that underutilised spaces in car parks “should be considered a priority for use as last-mile logistics hubs to support this ambition.” 

These last-mile logistics facilitate deliveries by removing large fleets of delivery vehicles from the roads. Last year, London leased 39 car parking spaces at London Wall Car Park to Amazon for last-mile logistics to fulfil consumer demand. 

As city centres look to promote more electric vehicles (EV), this also presents opportunities for more mixed-use urban developments. For example, in Paris, the French commercial developers SEGRO and Icade have undertaken the redevelopment of Gobelins rail station to incorporate a mix of office space and logistics space. The development will house a 75,000 sq-m underground logistics centre intended for urban distribution and last-mile delivery and feature charging infrastructure for EVs. 

Land acquisitions

British think tank The Centre for London reported that 24% of London’s industrial floorspace has been lost over the past 20 years. Most retail facilities and building layouts are not practical for logistics usage, with structures that are difficult to adapt and limited parking for delivery vehicles. This makes it even more impressive that property company British Land has been adding these types of spaces to its portfolio to meet this demand. Its acquisitions include turning Sheffield’s Meadowhall shopping centre and Finsbury Square Car Park into urban logistics delivery centres. 

Mike Best, Head of Logistics at British Land, tells Automotive World  that British Land decided to take on this project due to the growth of e-commerce over the last few years, accelerated by the pandemic. Consumers are demanding shorter than ever delivery times from third-party logistics providers like DHL, DPD, Amazon, and FedEx. Simultaneously, new ultra-fast delivery firms, such as Getir and Gorillas, promise to deliver supplies to consumers within minutes. 

Best explains that British Land’s broad expertise in development and planning has enabled it to expand its portfolio to adapt and acquire these spaces to fulfil such demand. “There is a growing need for inner-city logistics space but a chronic supply shortage. We see this space as an opportunity to leverage our expertise to acquire and develop logistics assets to deliver multi-storey developments or repurpose retail parks, car parks and other assets to urban distribution hubs,” he says. 

However, delivering the suitable logistics supply in urban areas, particularly London, is a challenge due partly to space constraints. As Best elaborates: “It requires innovative solutions to increase density and repurpose space. However, these challenges play to our expertise in site assembly, planning and delivering complex developments in Central London.” 

Urban spaces

He also notes the environmental considerations around freight vehicles travelling to and from distribution hubs, “We are helping to facilitate the greening of the supply chain in urban areas by reducing vehicle movements.” According to MIT Centre for Transportation and Logistics, freight vehicles account for 8% of global greenhouse gas emissions. 

More delivery hubs equal less overall distance travelled per vehicle. On top of that, British Land also equips EV infrastructure across sites, meaning reduced emissions and the ability to recharge. 

“The conversion of inner-city assets to logistics hubs presents a significant opportunity to deliver on higher value-creating opportunities in development and growth segments of the market.” He notes that in the first year of British Land’s urban logistics strategy, it has established a portfolio totalling £1.3bn ($1.64bn) of gross development value from repurposing these sites into delivery hubs. 

We are helping to facilitate the greening of the supply chain in urban areas by reducing vehicle movements

In February 2022, British Land announced its acquisition of three warehouses at Hannah Close in Wembley—now let to Amazon, Euro Car Parts, and the North London Waste Authority. Simon Carter, Chief Executive at British Land, comments, “This acquisition is another example of the strong progress we are making against our strategy to address the chronic shortage of urban logistics space in central London via intensification and repurposing.” 

Best highlights that spaces with the most potential to be converted into urban logistic sites are centrally located and have a broad catchment area for vehicles to make the most use. He says these factors, coupled with strong transport links to residential areas, “indicate that sites have the potential to satisfy significant local consumer demand for fast delivery services.” 

According to research by property consultants Knight Frank, if online shopping continues to boom over the next five years, retailers could require an extra 12m sq ft (1.1m sq metres) of additional space for last-mile deliveries by 2025, when e-commerce is forecasted to account for 30% of all retail sales. Matched with the City of London’s Plan 2036, more spaces could be developed into urban logistics spaces, transforming the future of urban freight delivery.