Industrial Outdoor Storage: Infrastructure Hiding in Plain Sight

Industrial Outdoor Storage (IOS) has attracted growing attention in recent years, but, in many respects, it remains a relatively underexplored part of the industrial and logistics market.

By Hugh Macdonald-Brown, Head of Logistics, Redevco

When people think about logistics, they tend to picture warehouses, distribution centres and last-mile facilities. Yet many supply chains rely just as heavily on well-located operational land. 

Used to store vehicles, containers, equipment and materials, IOS provides mission-critical infrastructure across the transport, construction and industrial sectors. Its importance to operations, combined with the difficulty of replacing well-located sites, is one reason the sector has attracted growing investor interest.

Historically, much of the market was owned by private businesses and owner-occupiers rather than institutional investors. As a result, ownership remains fragmented across much of Europe.

Demand is also supported by long-term trends, including logistics growth, supply chain optimisation and the increasing operational complexity of businesses.

Developing new IOS assets from scratch can be challenging. Construction costs, land values and planning considerations often make greenfield development difficult to justify, making refurbishment and repositioning of existing sites more attractive.

Many IOS opportunities involve upgrading infrastructure, security, lighting or operational layouts to better meet occupier requirements. In our experience, value creation often comes from understanding how occupiers use space and improving the asset accordingly.

This is one reason local expertise matters so much.

IOS is characterised by significant information asymmetry. Market knowledge, occupier relationships and on-the-ground presence are important when sourcing opportunities and evaluating risk. Successful investing is rarely about simply acquiring land; it is about understanding its importance to the occupier and how that may evolve.

Redevco have invested in the IOS space since 2011 and acquired close to €500m across 40+ sites which we have seen firsthand the rental growth story and importance of outdoor storage to a number of different industrial occupiers. Our recent activity at Redevco shows the range of assets within this category. We have acquired a logistics fleet facility in Widnes in the UK, vehicle and bus facilities in the Madrid and Barcelona markets, and transport-related sites in Germany. While the uses differ, each reflects the same fundamentals: strong locations, transport connectivity and a clear operational role for the occupier.

MAN truck and bus service facility, Hirschberg

These acquisitions have also reinforced our view that IOS is an inherently local market. At Redevco, we combine knowledge of major logistics corridors with an understanding of individual submarkets, infrastructure links and occupier requirements, both when sourcing opportunities and managing them over the long term.

For investors, IOS represents an increasingly compelling opportunity within the logistics and industrial spectrum. Supported by structurally constrained supply and growing occupier demand, the sector offers the potential for attractive risk-adjusted returns, resilient income streams and portfolio diversification, making it a valuable complement to traditional real estate allocations.

For many years IOS sat outside the institutional mainstream, but that is beginning to change as investors increasingly recognise its role within the wider logistics ecosystem.

For investors willing to look beyond traditional logistics formats, that creates an opportunity. Not because IOS is new, but because it has been an essential part of supply chains for a very long time and is only now starting to receive the attention it deserves.