ao link

Get updates from The Developer straight to your inbox Yes, please!

Urban logistics: We must plan for this new city-centre asset class

The increased demand for couriers is forcing logistics centres to move into urban centres. We need to proactively plan for this, writes Marco Fok

Linked InTwitterFacebook
We need to address the physical needs of the Amazon economy in the city. Lawrence Glass/iStock
We need to address the physical needs of the Amazon economy in the city. Lawrence Glass/iStock

In December 2020, the City of London Corporation granted 39 car-parking spaces to Amazon within the London Wall Car Park for a last-mile logistics hub.

 

To see a government body working directly with the private sector to create a delivery station in the heart of The City is unprecedented.

 

When we traditionally think of logistics, we think of large distribution centres on the side of motorways near the outskirts of towns. These behemoths dot the countryside, facilitating the transport of everything from groceries, to electronic goods, to clothing.

 

Large 40-foot semi-trailer trucks are loaded up on the edge of town and brought into city centres. But a semi-trailer is not what arrives at your front door to deliver your online purchases. That’s because there’s an intermediate step where the trailers’ goods are moved into light trucks, courier vans, even bikes.

 

Undeniably, these new logistics hubs fulfil a need, but what is the most effective way to integrate these new uses of real estate into urban centres?

 

COVID-19 and lockdown measures have accelerated e-commerce and the logistics sector as people shift their consumption from in-store purchases to ordering online. Retail closures are increasing this reliance on online shopping and couriers. More and more packages must be delivered, driving the demand for spaces which facilitate this last stage, or “last mile”, of the delivery process.

 

This has significant implications for the future of cities. Online shopping is pushing last-mile facilities into urban centres, next to residential areas, offices, and your favourite coffee shop. Undeniably, the creation of these new logistics hubs fulfils a need to meet shifting consumer habits. But what is the most effective way to integrate these new uses of real estate into urban centres which already have significant competition for affordability, liveability, and resources?

 

The London Wall Car Park conversion for Amazon in the City of London is significant as this may be one of the best examples of policymakers responding positively and acting in a proactive way to facilitate the integration of logistics into an urban centre. Repurposing parking spaces turns an otherwise under-utilised asset into a revenue stream and a key piece of infrastructure for people living and working nearby.

 

The final leg of parcel deliveries from The City’s logistics hub will be undertaken by e-cargo bike and on foot, which is expected to take up to 85 vehicles off the road each day, meaning up to 23,000 less vehicle journeys within central London. In addition to substantial commercial value, this approval for this transformation will also contribute towards the City’s target of reaching net zero carbon emission by 2040, improving air quality and road safety alike.

 

The City’s logistics hub is expected to take up to 85 vehicles off the road each day, meaning up to 23,000 less vehicle journeys within central London

 

Given the unstoppable growth of e-commerce, the rise of urban warehouses and last mile distribution centres is inevitable. Once large sheds on the outskirts of town, logistics assets will move closer into the centre and integrate into the urban fabric. This integration can happen through thoughtful and productive policy choices, as in the London Wall example, or can happen without conscious choice of how the city may be affected.

 

In Paris, the integration of urban warehouses with other uses is already underway with the redevelopment of the Gobelins rail station by Segro and Icade. The project is will targeting to deliver a mix of commercial uses above and below ground, including 75,000 sqm of underground logistics centre with electric vehicle and delivery tricycles charging infrastructure. It will also include two office buildings totalling 14,000 sqm, in addition to dedicated sport facilities, urban greenhouses and a 1.3-hectare garden.

 

The masterplan development was selected by French national rail company SNCF and the City of Paris through the Reinventing Paris 2 competition. Here, as with London Wall, we see a progressive policy decision prevailing through the repurposing of older, under-utilised assets into new assets with a positive impact for the local cityscape.

 

We must not neglect the limited opportunity to maximise the positive impact of this new asset class

 

Urban logistics can do more than bring same-day delivery to your home, it can create jobs closer to city and town centres, facilitate economic recovery and provide a much-needed tax base for local governments, helping to supplement the deficit from battered retail. It’s not just Amazon that will take up these spaces either. Given the land constraint, urban logistics can be made up of smaller unit sizes which are more fitted to growing local businesses and entrepreneurs.

 

Urban logistics is growing fast: according to Fairfield Market Research, the last mile delivery market is expected to reach a compound annual growth rate of 16% from 2021 to 2025. We need to consider how this new asset class can contribute to the future of cities.

 

We need to proactively manage this transition and plan thoughtfully for these assets in urban centres. We can integrate these centres in a sustainable, thoughtful manner into the existing fabric, but we must not neglect the limited opportunity to maximise the positive impact of this new asset class.

 

Linked InTwitterFacebook

Sign up to our newsletter

Get updates from The Developer straight to your inbox


© The Developer 2020 - Tweak Ltd., Kemp House, 52 - 160 City Road, London, EC1V 2NX. Tel: 020 7772 8384