Since 2021, the demand for industrial open storage (IOS) land has surged, leading to rapidly increasing values, particularly in the North West. David Newman, a partner in our commercial transactional agency team, highlights the expanding diversity of investors attracted to these opportunities.
Until recently, industrial open storage (IOS) sites were largely acquired by private investors and owner occupiers as typically the designated planning permission and the required infrastructure was in place for storing materials and equipment.
However, the market is now seeing a broader range of purchasers, including institutional investors who had not previously considered IOS as an attractive proposition for their investment portfolios. Many are now drawn to the diversity it adds to their portfolios as a different asset class and the fact that longer and more formal lease structures can be agreed offering longer-term income.
The traditional demand driven from the construction industry for the storage of materials, plant and equipment is now expanding to support supply chain distribution networks for HGV and van parking, as well as a drive towards electric vehicle charging facilities and battery storage.
Our commercial agency team has been extremely active in this market, seeing values for small sites ranging from £550k to £700k per acre. We have assisted clients with several disposals including former CEMEX sites:
- A 0.52-acre site on land at Cowling Brow in Chorley comprising a securely fenced and cleared concrete hardstanding with the plant and fixtures removed
- A 0.49-acre site in Morecambe that was decommissioned and comprised a securely fenced concrete hardstanding
- A 1.05-acre site located at East Prescott Road in Skelmersdale near J5 of the M58, again comprising a decommissioned plant providing a securely fenced concrete hardstanding.
This increased demand is expected to continue, and despite the economic uncertainty, further increases in rental and capital value are anticipated, albeit at a more modest rate.
