What is open storage land?
Open storage land is land upon which equipment, products, items and objects can be stored, or used for off-site parking, including van fleets, excess trailers and heavy goods vehicles (HGV's).
Sites can be manifested in several different forms and fulfil a broad spectrum of purposes, all lending to a complex yet consistently in-demand asset class. Many sites are often basic in nature, with inconsistent and uneven surfaces combined with insecure perimeters. Problems with drainage, security, demolition, and contamination are commonplace. But in recent years, there has been an increase in demand for better-quality sites. This sector is now emerging as a distinct asset class and is becoming more sophisticated. Users are increasingly seeking key features such as:
- 24/7 onsite security/monitoring with secure boundaries and floodlighting
- Level and consistent surfacing with good drainage
- Mains services
- 24/7 unrestricted access to, from and whilst on site
- Access to welfare facilities or the ability to install the same
- Accessibility to the wider road network
Growing demand for open storage space has been driven by a multitude of factors, including the strong growth in e-commerce, the loss of land to redevelopment and the emergence of electric vehicle (EV) charging locations.
But only recently has the market been recognised as a defined asset class. To date, many sites have been let without the use of agents but results from data that Avison Young has collected show that demand has been generated from a broad range of occupiers, including:
CONTAINER STORAGE
Principally required around container ports such as Felixstowe and Southampton. Demand has increased considerably in recent years because of port congestion.
FLEET OPERATIONS
The high levels of vehicles needed to service e-commerce operations cannot always be accommodated within warehouse service yards; therefore, space is required to house vehicle overspill. Additionally, many transport operations are conducted by a separate party to the warehouse. These companies need space to park their fleets and to repair and service vehicles. Such facilities are needed for vans through to HGVs. This type of tenant includes major third-party logistics providers (3PLs).
CAR PARKING
Car manufacturers require parking and pre-delivery inspection facilities, both adjacent to docks and inland. Similarly, space is needed by car rental companies and for the storage and inspection of second-hand vehicles at the end of leases or where vehicles are purchased by websites (such as Cazoo and Motorway).
HGV REST STOPS
The University of Sheffield conducted a survey of Lorry Park users in 2019. This found that 40% of trucks in the UK parked in non-designated spaces overnight and assigned spaces were 20% below demand. The survey also found that in 2017 more than 1,000 cargo-related crimes occurred, 72% of which were outside designated parking spaces. There are an increasing number of enquiries from operators for high quality facilities in port locations and inland across the UK adjacent to arterial routes. This has been driven by the HGV driver shortage and the need to attract talent into the industry. Sites will offer food and beverage facilities, restrooms and fuel.
BUS STORAGE
Both large and smaller operators have a need for secure storage which may include washing facilities and vehicle maintenance.
INFRASTRUCTURE & CONSTRUCTION PROJECTS
Schemes such as HS2 or Cross Rail have required a large number of off-site open storage compounds for plant and machinery.
EV CHARGING / GREEN REFUELLING
This will be a fast-growing sector over future years as the decarbonisation of vehicles grows to meet UK Government targets. HGVs appear unlikely to rely on electric power but rather will progress to hydrogen and bio-diesel. Again, these facilities can be provided on open storage land. For EV, typical occupier requirements are for between 1 – 4 acres, although these can be smaller scale within urban environments. Access to sufficient power is critical.
CONSTRUCTION MATERIALS
A number of prominent operators are active in this sector, including requirements for concrete and aggregate storage alongside building materials. Such facilities may require the installation of weigh bridges and welfare amenities. In addition, occupiers such as timber merchants will wish to erect basic structures at their cost to protect materials from the elements.
WASTE
Demand from this sector is consistently strong; however, supply is particularly acute because of the need to secure waste licences. Requirements are for both waste processing and the storage of bins and vehicles and there is a particular shortage of sites for dirty uses such as scrap. Level surfaces are required with good drainage. Rental values have risen, and premiums can be secured where land has a waste licence.
SELF-STORAGE
Open storage land can be used to accommodate containers on multi-level to provide self-storage facilities.
RAIL TERMINALS
These are limited in number but are growing in response to the decarbonisation benefits of rail as opposed to road transport. Such sites will be from a minimum of 10 acres upwards and will require a high-quality concrete surface.
DARK KITCHENS
Increasingly occupying prefabricated/ semi-temporary kitchen facilities together in urban locations, which also house fleet vehicles
FILM INDUSTRY
Particularly in London, there have been a number of requirements from the TV and film industry for storage of sets, equipment, vehicles and welfare facilities, typically on a short-term basis of between 3 – 12 months.
PLANT HIRE / PLANT YARDS
Both contractors and plant hire businesses have a continuing need for space of this type, often on a long-term basis. Such sites will likely require basic structures to protect equipment provided at the tenant's cost.