The economic need and planning perspective for open storage / IOS sites

Open storage / Industrial Outdoor Storage (IOS) refers to “land and sites used for outdoor storage, distribution, processing, servicing, and parking.”

In this report, we challenge the sector’s traditional image and present the case for open storage as a market segment in its own right, that is an important part of the industrial property market, and is a vital enabler of broader economic activity.

Our key findings and recommendations for IOS

A vital part of the supply chain

Economic importance

Open storage / IOS is becoming an ever more vital part of the UK’s supply chain. This is being driven by structural changes in the way economic activity is undertaken, including the rise of online shopping and last mile delivery, the need to build resilient supply chains, the increased use of electric vehicles, and the impact of carbon reduction / congestion measures in many urban areas.

Efficiency and capacity of open storage sites

Open storage / IOS enables greater capacity in the supply chain through the storage of containers and pallets, and parking / servicing HGVs, as well as more efficient and environmentally friendly last mile delivery in urban areas through localised van parking and EV charging.

What do the occupancy statistics say

In our sample of open storage occupiers on professionally owned and managed open storage sites, vehicle parking (mainly vans and HGVs) made up 35% of the total area occupied in urban locations, rising to 75% around strategic transport nodal points.

Growth in demand

Growth is evidenced in accelerating enquiry levels for open storage sites, which have seen a 470% increase from 2019 to 2023. Demand exists across a broad range of sizes and specifications, but there is an increasing focus on premium Class 1 sites, which are required for activities such as HGV parking.

Broader economic and societal benefits

IOS as an economic enabler

Although open storage sites do not generally provide high density employment, they are incredibly important as enablers of employment and economic output. Therefore, the perceived economic benefits from open storage should not be assessed purely, or predominantly on the employment density of a site, because much of the economic benefit is delivered offsite.

Social benefits

In addition to enabling economic activity, open storage has the potential to help deliver broader societal benefits. This includes reducing carbon emissions through facilitating a greater use of electric vehicles and reducing traffic congestion through fewer required trips and less total mileage for centrally located sites.

Non-supply chain uses of IOS

A broad variety of non-supply chain uses also remain important to local economies, including heavy plant hire & storage and containerised self-storage, as well as ‘traditional’ uses such as scrap metal and builders’ yards.

Economic value

IOS as an economic enabler

There is no underlying reason for the economic value of open storage sites to be lower than that provided by a building such as a factory or warehouse. However, built floorspace is typically considered to have a higher economic value than storage land. As a result, economic activity on urban open storage tends to get crowded out to locations where there is greater land availability, and this may not be efficient or rational from an operational point of view.

Vital industrial component

Open storage / IOS should be seen as a vital component of the modern industrial function, and not an optional extra.

Supply challenges

Supply has failed to keep pace with demand in terms of quality, quantity, and security of tenure. This reflects the many challenges facing the sector, including the lower perceived economic value compared with warehousing and logistics space, the higher value of other competing uses (notably residential), and a planning system that does not always recognise its importance.

Recommendations

Planning system for open storage sites

It is essential that the planning system enables the delivery of significant additional and upgraded open storage sites. However, open storage is not defined within the planning system, and it does not constitute a specific use within the Use Classes Order.

Local Planning Authorities should consider adopting specific policies to protect and promote open storage sites.

A review of broader planning policy should be considered, as the current Use Classes no longer reflect the way in which industrial, logistics and parking sites are used.

Permitted uses of IOS

HGV parking and vehicle charging should ideally be a permitted use on B8 sites, as even though the direct employment benefit is debatable, there are clear benefits in terms of lower congestion and emissions, as well as the function of enabling broader economic activity to take place.

Classification and policy reviews

A separate Use Class for open storage would be helpful as part of a wider review of the Class E commercial and business uses and class B8. This should reflect factors such as the hours of operation and the nature of use.

Sector transparency

The open storage sector remains relatively opaque, with no reliable stock, availability or take-up figures. However, this is gradually improving, and will improve further as the sector matures.

Conclusions

In short, IOS is creating new jobs which are making a valuable contribution to GVA in the UK (and globally) as it evolves.

If you would like a detailed copy of our report, please contact one of our Carter Jonas experts.

Carter Jonas expertise

As a multidisciplinary property business, we collaborate across development and commercial teams to offer a complete development life-cycle service. Our in-house commercial expertise distinguishes us from traditional planning consultancies. We provide the following services:

Pre-purchase Due Diligence

• De-risk your purchase with strategic planning insights.

• Identify optimal planning strategies based on occupier needs.

• Assess planning restrictions and prospects for success.

Planning Application Preparation

• Manage consultant teams for planning applications.

• Address site-specific issues such as drainage, flood risk, transport, and ecology.

• Navigate planning context for potential site occupancy and stakeholder discussions.

Local Plan Promotion

• Influence planning policy to support unrestricted B8 Open Storage use.

• Provide evidence for development need and site suitability.

• Long-term asset management and local plan promotion.