Local Plan Regulation 18 Promoting economic growth and meeting employment needs

Policy E2
Promoting economic growth and meeting employment needs

  1. The council will require the retention, enhancement, and intensification of existing employment uses on suitable sites, and support new proposals which would deliver a strong, diverse, sustainable and inclusive economy to meet the identified needs in the Employment Land Study. For the purpose of this policy, economic uses mean office floorspace (E(g)(i)/(ii)) light industrial, self-storage, logistics, and related uses (E(g)(iii)/B2/B8, and related sui generis (SG) uses which may include labs, 'green tech' and uses typical of innovation districts.
  2. All developments must:

    a) optimise the use of land and maximise opportunities to increase job densities (see E1);

    b) make provision for flexible employment premises that can be adapted to the needs of different employment uses, particularly where there is not a specified end user; and

    c) in large new business developments, the provision of small units, flexible configurations, and affordable space suitable for small and medium enterprises will be required unless justified by the type and nature of the proposal and subject to viability.

    d) The design and layout of the development must ensure that the proposed uses can successfully co-exist with surrounding uses taking into account Agent of Change principles.
  3. All proposals for the provision or re-provision of economic uses must be designed to meet the needs of occupiers and provide a high standard of workspace in high specification, sustainable (e.g. energy efficient) buildings which offer flexibility of design to provide for a variety of different occupiers including SMEs and grow-on spaces. All new employment floorspace proposals must be sufficiently detailed to demonstrate fit out beyond shell and core and include:

    a) adequate floor-to-ceiling heights which are sufficient for the operation of the intended use as well as the provision of services requirements such as ventilation, heating, lighting, electricity and cabling;

    b) adequate doorway and corridor widths together with clear and flexible floorplates with few supporting columns, to allow for ease of movement and facilitate the efficient use of the floorspace;

    c) level thresholds and inclusive access throughout the building;

    d) adequate servicing and loading facilities, including access bays and service yards, and goods lifts for multi-story developments, as appropriate;

    e) facilities that promote active travel, including cycle usage, such as workspace showers, changing rooms, and lockers, proportionate to the scale of the development and quantity of cycle parking required;

    f) natural light and ventilation. Windowless and basement economic floorspace will be resisted.

    g) Up to date, and high specification telecommunications connectivity, including broadband connections and mobile connectivity; and

    h) in the case of employment uses which require vehicular use and onsite parking, the provision of EV charging facilities. Further guidance on sustainable construction, development and provision of EV charging facilities is provided in the Climate Change SPD.
  4. When considering new employment floorspace or the extension of existing floorspace the council will also take into account:

    a) the nature of employment opportunities generated in the new development in terms of skills and training opportunities (see policy E5); and

    b) whether there will be displacement of other uses such as community facilities or housing.
  5. The borough's three town centres and the White City and Earls Court and West Kensington Opportunity Areas will be the preferred locations for new office development above 2,500sqm. Proposals outside of these areas for large new office development (above 2,500sqm) will be subject to meeting the sequential test as set out in the NPPF.6.
  6. The council will support proposals for the provision of premises and sites that meet the specialist requirements of sectors including research-based activities within existing clusters such as the Innovation District, and for creative enterprises especially where they are local startups and SMEs in the Creative Enterprise Zone.
  7. The council will support land and premises last used for industry, logistics and related services which contribute, or have potential to contribute to local and London's strategic capacity where the site meets the London Plan criteria for location and development of these uses. In addition:

    a) opportunities for intensification and co-location will be supported where they would make provision for the varied operational requirements this sector and demonstrably make best use of land taking account policy E1 and meet London Plan policy criteria; and

    b) the council will support and protect employment uses including industry, logistics and related services, operating from railway arches which also provide small scale and more affordable space meeting the needs of micro-SMEs in the borough. Further guidance is contained in the Railway Arches SPD.
  8. Where necessary and justified, the council will use conditions and/or planning obligations to limit uses consented within use Class E to achieve the objectives of this policy and in line with the NPPF and accompanying PPG, to support economic growth and to mitigate the impacts of development given the range of uses that need to be fully assessed. Where new business floorspace is conditioned for a specific use, changes to another commercial or industrial use appropriate for the site and employment area will only be permitted where there is no reasonable prospect of the unit(s) being retained for the conditioned use, evidenced by a robust and recent marketing exercise; and such changes of use would comply with other Local Plan policies.

Comment

6.7 The borough has many positive attributes which support economic development, and it continues to be an attractive location for many multi-national companies including Disney, with major mixed-use development under consideration or underway centring on the former Earls Court site and Olympia. The continued presence of large businesses is welcome because of their contribution to the local economy and in providing jobs and opportunities to residents. This range of employment uses goes across the scope of employment land uses, including some sui generis uses (as defined in the glossary). The Council's Employment Land Study (2025) has identified a number of sub-markets within the borough, including creative industries which the council is keen to encourage, and has worked with the GLA to designate a Creative Enterprise Zone within the wider Hammersmith/ Olympia area. Imperial College continues to grow within the borough, introducing significant spin-off biomedical and related employment. The council is keen to build on the presence of Hammersmith Hospital/Imperial College and Charing Cross Hospital by encouraging further growth of bio- medical and other related companies.

Employment needs

6.8 National planning policy (NPPF 2025) and the London Plan require Local Plans to identify and plan for business and employment needs within the plan period and looking up to 20 years ahead. The locational and premises requirements are specific to the type of uses -for example offices are main town centre uses, whilst light industrial, industrial and warehouse uses should be located away from high PTAL areas and residential areas. The Employment Land Study provides updated occupier demands and future needs information for a range of economic employment uses. There is a degree of uncertainty about future supply, partly due to office uses enjoying permitted development rights to change to other commercial uses without planning permission, and the significant new office pipeline which may or may not get built out. The council intends to remove 'E class permitted development rights via an Article 4 Direction which is currently under consideration by the Secretary of State. This would have the effect of protecting a supply of land that can meet future needs in highly sustainable locations, and which could potentially be retrofitted or rebuilt to meet modern requirements in sustainable buildings, including for emerging new businesses suitable for office locations which have been promoted in the NPPF and the council's Industrial Strategy.

6.9 To drive the decarbonisation of the UK's non-domestic building stock, commitments have been made to encourage the construction of more energy efficient buildings and upgrading/retrofitting existing buildings through the implementation of restrictions on private lettings based on energy performance. The energy performance of buildings in the UK is monitored through the Energy Performance Certificate (EPC) system, and non-domestic buildings must comply with Minimum Energy Efficiency Standards (MEES) to be lawfully leased. This is likely to impact 86% of properties in Hammersmith and Fulham's building stock. Protection of employment land is important to allow the borough's employment stock to meet modern requirements such as through retrofitting or redevelopment into highly sustainable new buildings including for new and emerging industries as set out the NPPF. Policy E1 complements this approach by ensuring that land is used most effectively and efficiently, exploiting the high PTAL locations to provide higher densities and achieve net job gains.

6.10 The council wants to strengthen the economic base of the borough, and this Local Plan aims to ensure there is sufficient land and floorspace to meet the needs. The council's Employment Land Study has provided updated evidence on demand, supply, economic market areas and property market and has identified key trends and projected requirements as follows:

Office floorspace

  • the projected demand for up to 2041 is for an estimated net additional 71,724 sqm
  • there is approximately 1,128,580 sqm of office floorspace across 674 properties
  • supply of office floorspace in Hammersmith & Fulham has increased by 18.6% since 2014- average rental value growth in the borough has been 38% over the last 10 years

Industrial space and land

  • Net demand for industrial land is projected to decline by 0.52 ha up to 2041 . This decline is reflective of the constraints on industrial land supply within Hammersmith and Fulham, as an inner London Borough with limited available space that is suitable for industrial activities. However, as a proportion of existing stock, the effect is projected to be modest over the Local Plan period.
  • The B8 warehousing market is characterised by larger floorplates, with 85% of all B8 units in LBHF being more than 1,000 sqm size. Most of the warehousing floorspace is located in the OPDC area.
  • Trends in demand over the last 10 years indicate vacancy rates in LBHF were generally low until 2020, at which point they began to rise, most significantly in 2023.
  • Following significant growth of 78.9% between 2016 and 2019, rents across LBHF have been relatively stable in recent years.
  • The latest published CoStar data shows there is approximately 30,611 sqm of light industrial floorspace, 42,763 sqm of general industrial floorspace and 177,537 sqm of warehousing floorspace in the borough.

6.11 Industrial floorspace is less prominent in Hammersmith and Fulham, with the Borough being home to no areas (outside of the OPDC area) that are designated in line with the London Plan hierarchy. The borough's industrial needs are met mainly within the OPDC and outer west London boroughs' strategic supply. Nevertheless, there are a number of "clusters" of non-designated industrial land in the borough, usually of 0.25 ha in size or more, which define industrial supply across the borough and contribute to meeting local needs and London-wide capacity. Industrial employment land surveyed largely fulfils local needs and provides local employment, and the ELS concluded that the sites were generally judged to be suitable for continued industrial use. Excluding the OPDC area, most premises are located close to the A4, King Street and surrounding roads, White City, North Hammersmith (Shepherds Bush), and Fulham (Imperial Wharf, Chelsea Harbour, and Fulham Reach). These areas, which also comprise railway arches, continue to function well within a constrained urban environment, with limited evidence of vacancy or opportunities for intensification. Proposals for new, and extensions to industrial land are assessed via the London Plan policies and accompanying Planning Guidance, which includes policies on intensification and co-location, and locational criteria such as access to the Strategic Road Network; proximity to sensitive uses; mix of uses and site floorspace capacity.

Economic growth and innovation

6.12 The council encourages new economic growth and innovation, and Agent of Change principles ensure that the new business/industrial uses can successfully integrate with neighbouring uses (see policy E10). Planning applications will need to be accompanied by details of the premises and its fit- out to demonstrate how the needs of occupiers are met for immediate occupation and ensure take up.

Affordable and SME workspace

6.13 The borough's economy is dominated by SMEs – around 90 % of firms - and to ensure that their current and grow-on needs are met, new developments will be expected to contribute to meeting needs by provide a proportion of small scale accommodation in flexible configurations.

6.14 Affordability continues to be challenging, and the council will seek opportunities of affordable workspace in large new business developments. Successful working of affordable workspace will require an understanding of the occupant, and the type of space required. The council will expect developers to engage with workspace providers in order to manage the space and/or to identify the future occupants of the space. Measures to support affordability include flexible leasing arrangements, cross subsidised rent through S106 agreements, reduced rent arrangements, provide co-hubs or start up space. The council will consider the requirement for affordable workspace in regard to viability and may require the applicant to provide a viability report. The adopted Affordable Workspace SPD provides more details on implementation to support Local Plan policy.

6.15 Where applications include replacement employment uses on existing employment sites, the replacement employment uses should not be of a lesser quality than at present. Where possible, the proposed scheme should be of a higher quality and seek to meet the needs of the employer. The replacement employment uses should not affect the long-term functioning of the employer in terms of either the proposed scale and/or location of the employment use on the site.

Regeneration areas

6.16 The Local Plan will continue to support comprehensive development with the White City and Earls Court and West Kensington Opportunity Area in line with the Industrial Strategy ambitions, through updated regeneration policies and site allocations for these areas. The location is suitable for high density development of housing and main town centre uses in an upgraded environment. Reflecting its high PTAL location and potential footfall contributing to vitality and viability of town centres, the White City and Earls Court and West Kensington Opportunity Area will continue to be included in the preferred locations for new office development above 2,500sqm.

Commercial to residential changes of use

6.17 Recent changes to planning legislation have extended the scope of Permitted Development rights. This means that some commercial uses, such as Class E business uses, can be changed to Class C3 housing without the need for planning permission, subject to a Prior Approval process. Likewise, there is greater flexibility for changes between Class E business uses, for example from office and light industrial to retail, food and beverage, and professional services. Whilst recognising the flexibility and benefits offered by the new Class E in some parts of the borough, particularly town centres, it is vital to exercise control over changes of use in order to plan positively for the Borough's employment land needs. This is particularly important for the Hammersmith Strategic office location, to support new and emerging biomedical and tech industries such as those in the Innovation District, small-scale accommodation suitable for the SME sector and to protect the smaller scale industrial capacity in the borough.

6.18 Regardless of the outcome of the draft Article 4 direction and in line with the NPPF, the council will use planning conditions to limit the range of uses normally permitted within a use class where this is necessary to ensure that employment uses are protected and that the location of employment uses continues to be appropriate to its location. Marketing requirements are set out in Appendix 5.

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