GUEST ARTICLE: The Misconception of Job Loss in Office-to-Industrial Redevelopment

The property industry is facing a conundrum: the way the commercial world operates has changed faster than the attitudes we need to support it. This article comes from Tom Jansons, Development Director at Jansons Property…

“It goes without saying that the pandemic evolved the way we live and work. Many industry analysts believe the pandemic accelerated e-commerce growth by 5 years, pushing forward the need for logistics hubs to service that demand. At the same time, work routines changed permanently with ONS statistics for 2024 showing the 40% of workers no longer work full time in an office – if at all. As a result, the demand for large, out of town office spaces has decreased at the same time as the need for more industrial space has rapidly risen.

It seems logical then that the change of use from office space to industrial is a natural progression needed to facilitate the way we live now. But a misconception held by both planners and the wider public is stalling this evolution. An idea pervades that converting office buildings into industrial or logistics hubs leads to a net loss of employment. This notion is frequently raised in planning discussions and by the public but it’s not reflective of the real economic impact of industrial redevelopment.

Equally as prolific

While office buildings tend to have high job density per square foot because of the size of space workers require, large industrial units can be equally as prolific employers through roles like machine operators, assemblers, supervisors, engineers and technicians. Warehouses and distribution centres require a workforce to manage inventory, package goods and handle shipping and receiving operations.

Warehouse managers, operators, logistics managers and drivers add to the employee list – with facility maintenance, equipment repair, safety management and janitorial services increasing it even further. Industrial operations also create roles for skilled trades like electricians, welders, machinists and other skilled workers to keep the facilities running smoothly, along with indirect or secondary employment in supply chain jobs, raw materials, equipment, parts and other businesses that feed into the industrial supply chain.

The idea that driving people back into occupying office space is the only way to encourage the employment market in the UK is an outdated and inaccurate assumption, and one that we need to be able to move past to re-invigorate the property market. Data from global workplace insights company Leesman shows that 74% of UK employees plan to be in the office two or fewer days a week and say their corporate clients report they will need 30% to 40% less office space than they did before the pandemic.

‘Unlikely to see a renewed popularity’

Even with an upturn in workers returning to the office, we’re unlikely to see a renewed popularity of these out-of-town office behemoths. Instead, city-centre, consolidated workspaces are becoming the norm – the right size and convenient enough to house the number of employees office working on any particular day.

Meanwhile, the demand for industrial and logistics floorspace isn’t going to diminish. Based on current capability utilisation rates, the UK could need more than 112 million square feet of warehousing space – an area of more than 1,700 football pitches – within the next five years according to Knight Frank. To meet even part of this demand, the property industry is relying on attitudes towards industrial redevelopment changing rapidly.

Part of the ‘lower employment’ misconception stems from the fact that very few people get to see what goes on inside a vast, industrial building. Even though the warehousing and logistics sector contributes £163 billion in GVA to the UK economy, the critical role warehouses play is always ‘behind the scenes. And without full understanding of what goes on within and around an industrial park, these spaces remain misunderstood and underappreciated. 

GDV

Millions of people work in warehousing and these industrial areas play a critical role in our national life. Our recent acquisitions of two business parks with a Gross Development Value (GDV) of £100 million has demonstrated that the demand for new, high quality industrial and logistics space remains strong and stable. These two parks will be re-developed to create 300,000 square feet of prime industrial space but it’s only the tip of the iceberg.

In order to meet the demand that our country requires to facilitate the way of life we’ve evolved into, we need the planning process to catch up with the speed of change. We need to dispel these widespread misconceptions about the imagined superiority of office employment and see these fundamental industrial units as indispensable tools for how we live now.

The way we live and work has changed. Now it’s time for attitudes to catch up.”