Is open storage the new asset class in the industrial sector?
Where is the supply?
We have identified the provision of open storage sites across a number of key urban areas, using data from the Valuation Office Agency (VOA) and the Ordnance Survey. This shows the location and size of sites classed as open storage by the VOA (and therefore shows all sites, not just those available). Whilst this does not provide a complete picture, it is a useful guide to the geographical distribution and size of sites across various markets. The data is available to explore in our interactive map.
How could current supply constraints be overcome?
Given intense competition and high urban land values, increasing the supply of land available for open storage will always be challenging. Further rises in achievable rents and interest from mainstream investors will also increase the viability of the sector, and potentially allow it to compete more successfully against other lower value uses.
We believe there should be greater recognition in planning policy of open storage as a vital and distinct part of the commercial market. Left to market forces, open storage sites will continue to be lost to higher values uses, and planning policy therefore needs to reflect their importance to the economic functioning of an urban area.
Open storage and last mile logistics hubs need to co-exist with competing residential and other employment uses. There is inevitably pressure on land use in most urban areas. However, it is particularly acute in Greater London, and it is encouraging that the new London Plan highlights the importance of getting different land uses to work together cohesively.
Achieving sufficient supply is a long-term problem and we think more creative solutions will be needed going forward. For example, the emphasis on vehicle storage and parking in open storage requirements could be ideal for ground floor use with residential above. This is a similar type of solution to the concept of multi-storey warehousing, which we have examined in a previous research report. Click here to view that report.
