Luton commercial property sector set for take-off after airport expansion plans approved

The government’s go-ahead for the proposed expansion of London Luton Airport could herald a “once in a generation” boost to the region’s commercial property market, attracting major business investment and creating thousands of new jobs.

The economy of Luton and the surrounding area is poised to benefit enormously, with several major warehouse and industrial developments in the planning pipeline and others about to get underway.

It was recently announced that London Luton, currently the UK’s fifth busiest airport will be allowed to almost double in capacity.

Transport secretary Heidi Alexander granted a development consent order for the airport’s plans to expand its perimeter and add a new terminal, allowing for a potential 32 million passengers a year. Around 16.7 million people used the airport last year. It is well situated for the Oxford-Cambridge arc championed by Chancellor Rachel Reeves for future economic growth.

Eamon Kennedy, senior partner and head of industrial and logistics at Kirkby Diamond, said: “There is growing confidence in Luton as an excellent place to do business. With the announcement of London Luton Airport’s expansion, it’s clear the region's economy is soaring and poised for further significant growth.

“We believe this could herald a once in a generation event, with commercial property investors and developers already ploughing enormous resources into the development of 2.5 million sq ft of warehouses and industrial units in and around Luton.”

He added: “With several major projects in the planning stages, further investment is expected to flow into the area. Occupiers will be drawn from the south, attracted by the new Grade A units in an excellent location, well-connected to the airport, and offering lower labour costs.”

It was recently announced that global industrial property specialist Goodman had acquired the former Vauxhall manufacturing site in Luton. Goodman will work with Luton Council and the community to bring forward development proposals for a mix of employment uses at the Kimpton Road site.

Goodman plans to redevelop the site, which is close to the airport, into a high-quality commercial and industrial park, attracting businesses from various sectors including advanced logistics, manufacturing, engineering and digital infrastructure. It is estimated the regeneration could create more than 1,700 jobs once complete.

Developer Hampton Brook has acquired a six-acre site and secured planning consent for a trade park located to the west of Luton Road. Meanwhile, Aviva is planning to develop a site on Toddington Road, with plans to create new industrial units and distribution facilities. At Junction 10 of the M1, Wrenbridge is investing £31.5 million in a 37-acre project that will establish a new workplace, logistics, and warehouse commercial gateway to Luton. Additionally, Prologis is redeveloping the former Vauxhall Motors headquarters, Griffin House, and the BWI Group site on Windmill Road to create a high-quality logistics and business park. Collectively, these developments highlight the significant investment that is pouring into the city.

Cllr Javeria Hussain, deputy chair of Luton Rising, the Luton Council company that owns London Luton Airport and associated assets for community benefit, said: “It’s hugely encouraging to see the confidence that is currently surrounding economic and employment growth in Luton. This is reflected in the significant interest we have seen for the stylish, contemporary office space in our new business and employment hub at Morton House where we are already attracting new inward investment and supporting the Council’s work to make sure that Lutonians have the skills to be in prime position to take up the new employment opportunities coming on-stream.”