Out on a 30-acre site in the inter-war suburb of Hayes, in Hillingdon, a colossal claw crane is ripping out the remains of a former Nestlé roastery plant.
As soon as June 2020, the first stages of London’s first large-scale, mixed-use industrial and residential development will be launched in its stead.
Demolition is scheduled to finish this summer, with works on the industrial units starting immediately afterwards, to open in summer next year.
Barratt London, SEGRO’s residential partner on the site, also plans to open the first of six housing blocks in 2020, with the remaining residential element launching in stages until 2025. The buildings will range from four to 11 storeys, surrounding a courtyard.
It has taken SEGRO four years to reach this point, since it acquired the former factory in 2015, but its long-awaited plan to join industrial and residential premises together is finally coming to fruition.
“This is the first time [this will be] done on a large scale,” says Alan Holland, business unit director for SEGRO’s Greater London portfolio, as the company lays on a tour alongside Barratt.
“They are co-located, but clearly separated. Both the residential and industrial parts of the market need further maturity for us to expect them to mix up further than that, but we have started to overlap in some sites in certain locations.”
Steve Lord, development manager at SEGRO, adds: “We are in discussions with occupiers, and I’m pretty certain we will get prelets signed over the next year or so.
“There is a lot of demand for the west side of London, and there isn’t a lot of supply.”
Who is building what
SEGRO’s side
- 240,000 sq ft light industrial space
- Four units; four occupiers
- More than 500 new jobs
- Open 24/7
Barratt’s side
- 1,381 new homes; 483 affordable rent and shared ownership (35%)
- Six residential blocks ranging in height from four to 11 storeys
- Mix of studios, one-bed, two-bed and three-bed flats
SEGRO expects the site will primarily host customer fulfilment centres for occupiers looking to drive e-commerce growth.
One of the units also has planning consent for data centre use.
Lord also predicts heightened demand from companies because the site is close to Heathrow Airport, where there is very little supply, compounded by the possible construction of a third runway.
“We anticipate some occupiers [will be] relocated by the third runway, as well as further demand for businesses needing to be near the airport,” Lord says.
There will also be 32,140 sq ft of leisure and community space. Public amenities will include a café, gym, garden allotments, running track and underground residential parking. The heritage, 1930s art deco-style frontage, designed by Wallis Gilbert & Partners – the architects behind the famous Hoover Building in Perivale, Ealing – will be retained.
The neglected canal frontage next to it will also be opened up as a public amenity, with moorings for canal boats and new facilities for the local canoe club. A new footway crossing to the site is also being built, the funding for which is currently being put together.
Reconciling beds and sheds
The concept of integrating industrial with residential has not come without its challenges.
“We had to get comfortable with SEGRO,” says Martin Scholar, head of planning at Barratt. “For them, it was important their industrial occupiers would not be [disrupted] by complaints from residents – but they need 24/7 access to their units.
“Similarly, buyers for our flats should not be disturbed by activity – lorries beeping and deliveries happening at 4am, for example – coming from SEGRO’s part of the site.”
SEGRO’s solution to this has been to close off the end of its adjacent avenue to reroute heavy goods vehicles. It will also manage industrial noise by soundproofing its residential block with brick backs.
“There is already a high background level of noise, and traffic always comes up and down. On the adjacent road there will be a 20% increase in traffic, but on the main road it will only be a 2% increase because it is a busy main road,” says Lord. “So in terms of net increase, it is not significant.”
Mixing it up
A dearth of supply in London has led SEGRO to assess whether it can expand some of its existing sites in the capital with more mixed uses.
“The biggest constraint is finding sites,” says Holland. “This was an absolute gem – it is 30 acres in London. Land is so scarce – it is hard to find a site with sufficient scale, and character, to make it work.”
If the REIT could have had its way, the industrial element at the Hayes site would have comprised multi-storey blocks; but since it is a conservation area, there are several restrictions.
Meanwhile, SEGRO says the notion of putting residential elements either above or on top of industrial units will become a reality at some point in the future, but currently causes too much of a headache around ownership.
Lord says: “There are ownership and investment issues because you are mixing up different investment categories – what is the vehicle that would own that structure?
“There are ways around it, but it is more difficult to do than normal. There are also practical construction issues – noise transfer or vibrations – but again it is possible to solve [these problems]. It has been done elsewhere in other countries.
“It is simply driven by the economics. As land prices go up and up, the day is closer when those expensive and difficult developments become the best option. So I anticipate we will see those as time goes by.”
Holland adds: “My view is there is no technical reason you couldn’t have resi units above industrial. It will probably be a progression; you might have an intermediate use which could be student accommodation and then perhaps private.
“But you need large-scale sites for that to happen, which are generally integrated into transport improvements. And that is a constraint – those larger sites tend to be in zones three or four.”
On the whole, however, nothing is off the table for SEGRO, with student accommodation and build-to-rent highlighted as sectors with particularly promising growth.
“The long-term direction of travel means big capital cities with 10m people will need to work out a way of factoring in [last mile] logistics,” says Holland.
“There is a lot of experimentation going on as the supply chain moves and changes, and we are keen to be at the forefront.”
Planning ahead
Scholar reflects, however, that the road ahead for future ‘beds and sheds’ schemes has become more difficult on the resi side of the equation, as planning policies tighten.
While the London Plan has broadly acknowledged the request for more balance between industrial and residential, Scholar finds its policies would now be far more restrictive than they were when proposals for the Hayes site were drawn up.
“If we were running the planning arguments now, four years on, we would have a different scheme,” says Scholar.
“They have really toughened up on the re-provision of industrial floorspace, plus the push towards up to 50% affordable housing. In my opinion, we would have a project that would be much harder to get through planning now than we had before, from a residential perspective.”
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