Beds and sheds in London – the future is bright

Will developments combining industrial and residential uses become a common feature throughout London?

London needs 66,000 new homes a year. With online retailers such as Next promising next day delivery for an annual fee of less than £20, logistics companies need more space to sort and deliver parcels 24/7. Lockdowns 1, 2 and 3 are causing the permanent closure of flagship stores such as Debenhams on Oxford Street despite Boohoo’s acquisition for £55m and as consumers shift towards buying more online, traditional retailers’ need for space is decreasing. This article explores how beds and sheds developments could help satisfy the current real estate needs of the retail, logistics and residential sectors.

So what are beds and sheds?

The phrase refers to developments where residential occupiers and logistics are placed on top of or next door to each other.

What is causing the increase in demand for beds and sheds?

Simply put, demand for traditional retail sales is falling whilst demand for logistics and warehousing space is increasing. For example, Property Week, Savills and Tritax Symmetry’s fourth annual Industrial and Logistics Census in association with Analytiqa found that:

A sign of the times?

What does the future hold for beds and sheds?

Six architects were asked by Savills and Property Week to design their vision of a future urban mixed use environment linking residential and employment requirements.

The Helix, UMC Architects’ design, is an urban distribution hub which facilitates last-mile deliveries and serves the co-existing inhabitants. By combining storage, distribution, mixed use and residential facilities in one, HELIX would generate ‘on demand’ delivery.

Source: Hawkins\Brown

Fast>Fwd is Hawkins\Brown’s design for an urban block which combines collection points, a showroom, delivery and warehouse functions. A residential structure sits above customer collection space and the warehouse roof provides outdoor space for residents.

What are the challenges facing the beds and sheds sector and the solutions?

Take DPD as an example. DPD UK will commence trials of the Volta Zero, the world’s first purpose-built full-electric 16-tonne delivery vehicle in Q1-2021 to operate in London’s Ultra Low Emission Zone to support its micro-depot strategy.

As for drones, proponents of the technology believe large-scale drones will carry goods of less than 2.5 kg up to 15 miles, which should reduce road congestion, vehicle emissions and delivery costs.

For instance, Wing run by Google’s Alphabet, has been trialling drone deliveries of coffee, food and medication in an Australian suburb since 2018.

Starship is helping to solve the last mile delivery problem with fleets of autonomous robots which take food deliveries to residents.

The future is bright

Logistics is hungry for space. Traditional retail is shrinking. London has a housing shortage. The intensification of land use through sheds and beds developments could be the solution to all three.

We are here to help

The experienced team here at Newmanor Law, specialists commercial property lawyers, have the knowhow to assist mixed use developers. Please speak to Karen Mason, on +44 (0)20 7464 4081 or email karen.mason@newmanor.com to find out more.