“Why don’t I own this?” The words of oil prospector Daniel Plainview to his property advisor, querying the land rights for his oil pipeline to the California coast in the Oscar winning film ‘There Will Be Blood, and a blunt, single sentence reminder of the need for early due diligence on large scale developments.
Fast forward from the Californian’ oil boom of the late 19th, early 20th centuries - to the internet, omnichannel retail, and the ensuing boom in logistics developments, with strategic distribution centres and warehouses now key property assets, from the ‘Golden Triangle’ and beyond.
While demand has moderated somewhat from recent record figures CBRE’s 2023 Q1 Logistics Market Summary shows the diverse occupier base, and ongoing resilience of the UK’s logistics sector, relative to the macro-economic climate.
The report shows Q1 2023 investment volumes at £0.96bn, with all regions experiencing prime rental growth in Q1 – though at a slower rate than the levels seen in 2021 and early 2022.
Bringing developments forward
The delivery of large-scale logistics developments and supporting infrastructure requires pre-emptive due diligence to avoid stumbling blocks that can potentially delay and compromise their operation.
The Hillside Parks Ltd case – analysed by Shoosmiths’ planning experts - focused attention on the significance of structuring multi-phase and multi-plot developments in such a way that mitigates the risk of their planning status being compromised by subsequent partial ‘slot in’ applications.
While Hillside served as a recent reminder of the need for applicable planning applications to have a sustainable ‘big picture’ basis at the outset, there are other potential landscape-based matters that could impact on the make-up of a logistics development and the timing of its implementation.
Local authority ‘open space’
Designated uses of land owned by local authorities can entail requirements to be satisfied for the purpose of their disposal. Land designated as ‘open space’ cannot be disposed of without the local authority first advertising its intention to dispose of the land, and then considering any objections to the proposed disposal.
The practical implications of these requirements are two-fold.
Firstly, it is critical to identify land designated as public open space as early as possible. This is key to ensuring the disposal process is complied with, so it would bear scrutiny under any judicial review and avoiding the potential consequences of non-compliance with the disposal being subject to applicable statutory restrictions.
It is also important to factor in the time it takes to exhaust the disposal notice process with the local authority into the negotiation of the contract for the acquisition of the land for development, ensuring that process is exhausted early on, rather than at a later stage, which risks impacting planned timings.
Public rights of way
Staying with local authority constraints, another dynamic that can arise is public rights of way, which may need to be stopped up and/or diverted in order to implement the intended development, via applicable Town and Country Planning Act powers.
The procedure for obtaining any necessary stopping up or diversion order will need to be factored into the overall development timetable. An order can take several months to be confirmed, subject to the resolution of any objections.
Stopping up and diversion orders are tied to the provision of planning consent being confirmed on the granting of planning permission, or conditional on planning permission implementation. To use time efficiently, the stopping up and diversion process can be run in tandem with the planning application.
Where utilities apparatus is contained within public footpaths, a stopping up or diversion order cannot be confirmed without the consent of the applicable utilities’ operator.
Telecommunications infrastructure
Identifying existing utilities infrastructure as early as possible is not only important for planning the practical implementation of a development, but also for establishing the rights that underpin the maintenance of such utilities, and any restrictions imposed on any development in their vicinity
In terms of telecommunications apparatus, aside from the contractual provisions under any document in place for them (wayleave, easement, etc.), these are likely to be afforded statutory protection under the Electronic Communications Code - updated to its current form in 2017.
Telecoms operators have extensive powers under the Code, which regulates the legal relationships between operators and landowners.
Where a prospective development requires the removal or relocation of telecoms equipment covered under the Code, a landowner may serve notice on an operator. However, that is subject to a lengthy and potentially contentious process, which may require legal proceedings before the equipment can be removed or relocated, with the initial Ofcom prescribed notice from the landowner requiring at least 18 months’ notice to terminate the operators’ statutory rights.
Exolum pipeline system
A national oil pipeline network originally constructed during World War II, and permanently retained by law as the former ‘Government Pipeline and Storage System’, is now owned by the Spanish company Exolum, having been sold to it following privatisation under the Energy Act 2013, which transferred all the pipeline operator powers previously held by the government to Exolum.
Comprising 2,000 kilometres, the Exolum system is the UK’s largest fuel pipeline network, representing 50% of the entire UK network.
Oil pipelines within the Exolum system are conferred protection by virtue of varying prescribed easement strips - from 3 to 50 metres wide - running horizontally on each side of the centre line of the pipeline, within which works are not permitted without Exolum’s consent.
Where such an oil pipeline is present within land earmarked for development, it needs to be quickly ascertained whether the intended development design can work around the pipeline - and pipeline easement strip - remaining in situ, or if the pipeline will need to be diverted with Exolum’s consent.
As developers continue to look to bring logistics projects forward, where the targeted operational timetable is key, it is imperative to mitigate potential risks as early as possible in order to avoid compromising the development timetable.
The factors outlined give examples of landscape-based matters that may need to be navigated as part of the planning of a project, to avoid unwanted surprises and delays.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.