Draft London Plan recognises I&L and data centre need – but does it address the scale?

One of the most significant changes is the identification of a requirement for approximately 520 hectares of industrial land by 2050 to support future storage and distribution demand across London. This represents a major departure from previous approaches and an explicit acknowledgement that the capital's economy, supply chains, housing delivery, and increasingly its digital infrastructure, all rely on a sufficient supply of industrial land. As a statement of intent, it is one of the strongest aspects of the draft Plan.

However, the more interesting debate is not whether the need figure should be 520 hectares, or higher. The real question is whether the assumptions used to translate floorspace demand into land requirements are realistic.

Are the intensification assumptions realistic?

The supporting evidence relies heavily on intensification, redevelopment and significantly higher plot ratios to reduce the amount of land required to accommodate future demand. In principle, that is sensible. London has finite land resources and making more efficient use of existing industrial land must form part of the solution.

The challenge is that the evidence appears optimistic about how widely those assumptions can be applied in practice.

Table 8-4 of the Economic Uses Supply and Demand Study (p. 104) adopts plot ratio assumptions which imply development densities substantially above those typically achieved across much of the existing logistics market. While such densities may be achievable in specific circumstances, particularly on highly constrained urban sites or in selected multi-storey schemes, they are unlikely to represent the norm across London's industrial stock. The risk is that exceptional examples become the benchmark against which future land requirements are assessed.

Modern logistics facilities require servicing yards, HGV circulation routes, trailer parking, power infrastructure, employee facilities and sufficient operational flexibility to accommodate changing occupier requirements. These are not inefficiencies; they are fundamental operational requirements. While intensification and higher-density development have an important role to play, they should not be assumed capable of bridging the entire gap between demand and supply.

This matters because underestimating land requirements can create a false sense of comfort. A land need figure may appear less challenging on paper while remaining difficult to accommodate in reality.

Data centres: strategically important, but how much capacity is needed?

The second area where the Draft London Plan raises important questions is data centres.

The introduction of a dedicated data centre policy is welcome and reflects the growing recognition that digital infrastructure underpins almost every aspect of London's economy. The policy provides a clearer framework for considering issues such as electricity supply, water availability, clustering opportunities and heat recovery. That is a significant step forward and provides a degree of certainty that the sector has long sought.

While the Plan clearly recognises data centres as strategically important infrastructure, it is notably less explicit on the scale of future demand than it is for I&L uses. There is no equivalent land requirement, floorspace target or evidence-led assessment of how much capacity London may require over the plan period.

Without a quantified understanding of future data centre demand, policymakers cannot fully understand the scale of future power requirements, infrastructure investment or land requirements. More importantly, the Plan does not fully address the reality that I&L uses, data centres, open storage, self-storage and other infrastructure-related activities are increasingly competing for the same finite supply of strategically located land.

As artificial intelligence, cloud computing and digital infrastructure continue to expand, understanding the scale of future data centre demand will become increasingly important. Without that evidence base, it is difficult to assess whether London is planning for the infrastructure it will actually require or simply establishing a policy framework to respond to proposals as they emerge.

The case for cross-boundary provision

A further question is whether all of London's future I&L and data centre requirements should be accommodated within Greater London's administrative boundary in the first place.

The functional geography of London's logistics and data centre markets extends well beyond London itself. Occupiers, labour markets and supply chains operate across a much wider economic geography encompassing areas outside the capital.

Given the competing demands placed on finite land resources, there is a strong argument that a proportion of London's future requirements should be accommodated in well-connected locations beyond the Greater London boundary. In many cases, these locations can provide larger development sites, better access to strategic infrastructure and opportunities for modern logistics and data centre development at a scale that is increasingly difficult to achieve within London.

The draft Plan itself appears to recognise this challenge. The introduction of Broad Locations for Growth (BLGs) in the Green Belt represents a notable shift in approach and an acknowledgement that protection and intensification of London's existing industrial land alone will not be sufficient to meet future needs. Whether individual BLGs ultimately prove suitable or deliverable is open to debate, but the principle is significant. For the first time in many years, the Plan implicitly accepts that additional land supply may be necessary.

Indeed, the draft Plan's acknowledgement of both industrial land shortfalls and the potential role of BLGs arguably strengthens the case for a broader city-region conversation about how and where future growth should be accommodated.

The challenge is that such an approach requires genuine cross-boundary planning.

While the Draft London Plan acknowledges the need for collaboration beyond London's boundaries, it provides relatively little detail on how neighbouring authorities might contribute towards meeting future I&L and data centre requirements through a coordinated sub-regional strategy. Given the scale of the challenge, this feels like a missed opportunity.

A significant step forward – but important questions remain

Overall, the Draft London Plan represents genuine progress. It acknowledges that I&L space, data centres and supporting infrastructure are fundamental enablers of economic growth. The debate has moved on from whether London needs these uses to how much land they require and where that land should be provided.

The bigger question is whether the Plan has fully grasped the scale of future need, the realities of modern logistics and data centre operations and the increasingly important role that neighbouring authorities may need to play in accommodating London's future growth. As consultation progresses, those issues are likely to become some of the most important and contentious debates in the plan-making process.

Further information

Contact Mark Powney or David Wasserberg