Open storage rental growth significantly outpaces prime industrial

Rents for prime UK open storage properties have increased by 24% over the past year, according to fresh data from Knight Frank. The storage rent rises are significantly ahead of prime industrial and logistics, which recorded rental growth of “just” 6.8%. With prime industrial rents increasing by 53% over the past five years, many businesses whose storage needs are not limited to indoor facilities are now looking at open storage solutions as a more cost-effective alternative, said Knight Frank. South Yorkshire shows the strongest growth in prime open storage rents, with a 55% rise. This is followed by the Midlands, up 53%, Scotland, up by 31%, Wales, up by 27%, and the North West, which saw rental rises of 26%. A lack of supply is expected to see rent rise further. Deirdre O’Reilly, associate in the commercial research team at Knight Frank, said: “In recent years, growing occupier demand for better-quality open storage sites has led to this nascent subsector’s emergence as a specialised and distinct asset class. New and larger operators are expanding the scope of open storage requirements, using sites for a broader range of purposes and longer-term components of their operational strategies.” She added: “Like the wider industrial market, prime open storage sites offering higher operational quality, superior features and excellent connectivity to large urban centres, motorways and ports are the most attractive and increasingly sought-after. However, the supply of prime sites is highly constrained, driving up rental values for the limited number of prime opportunities that are available.” Photo © Alexander Schimmeck/Unsplash