Industrial outdoor storage comes of age

Growth moderates as the market matures 

Industrial Outdoor Storage (IOS) has traditionally occupied a relatively overlooked corner of the UK industrial property market. That is changing. Growing occupational demand, extremely limited supplies of suitable land and increasing institutional investment are helping IOS develop into a distinct operational real estate sector. 

At its simplest, IOS provides the yards and open land businesses need for activities ranging from vehicle and trailer parking to container storage, plant and equipment, waste management and construction. But its role is expanding as logistics networks evolve and new requirements emerge from ecommerce, infrastructure, utilities and other land-intensive industries. 

Our latest research reveals a market that is still recording rental growth, albeit at a more sustainable pace following the rapid increases of recent years. Across the 41 UK markets tracked, prime IOS rents increased by 2.8% in the year to Q2 2026. Over three years, however, the increase is much more substantial at around 39%. 

There are notable regional differences. Over this three-year period, London and the South East have seen rents rise by 42.9%, compared with 35.1% in markets outside the region, demonstrating the particular pressures evident in and around the capital. 

Demand is confronting a constrained supply base 

One of the defining features of IOS is the difficulty of increasing supply, particularly in urban markets where land faces intense competition from alternative uses. 

At the same time, occupational requirements remain significant. Knight Frank recorded 529 new IOS enquiries across the UK during the first half of 2026, representing an estimated requirement for approximately 1,386 acres. For context, 493 enquiries were recorded during the whole of 2025. 

There is a strong geographical bias to this demand. Some 72.3% of H1 2026 enquiries included London and the South East, with 70.5% focused exclusively on the region. Requirements also favour comparatively small sites, with 41% of enquiries seeking less than one acre. In London, that proportion reaches 48%. 

For owners and investors, this creates an interesting mismatch between the quantity of land theoretically available and the stock that businesses can actually use. 

Knight Frank is tracking 278 available IOS sites across London and the South East, yet only 15 are confirmed as offering high-quality surfacing, utilities, security and unrestricted access. Larger plots are particularly difficult to secure, with only six available sites above five acres in Greater London. 

The fundamental economics also help explain occupier interest. On average, prime IOS rents across the UK are around 77.5% below prime rents for warehouses larger than 50,000 sq ft. For occupiers whose operations do not require fully enclosed buildings, IOS can therefore provide a materially lower-cost form of industrial accommodation. 

A market serving more types of occupier 

The profile of IOS demand is evolving too. 

Vehicle storage represented almost half of enquiries in H1 2026, but requirements also came from waste, aggregates, container storage, self-storage, plant hire, construction and leisure uses. More broadly, Knight Frank’s research identifies growing requirements associated with EV infrastructure, utilities and last-mile logistics. 

Major infrastructure and construction projects could provide an additional source of demand. The research identifies 370 consented UK construction schemes valued at more than £200 million each that had started or were expected to commence in 2026, up from 216 starts in 2025. Infrastructure and utilities represent 149 of those schemes. Large projects can generate requirements for compounds, materials storage and other operational land during construction, while improvements to infrastructure can subsequently alter logistics and freight patterns. 

IOS income growth diverges from underlying land values 

Prime IOS rents have risen by around 39% over the past three years, while prime industrial land values have declined by approximately 6%, highlighting the market’s evolution towards an income-led asset class. 

Why investors are looking at IOS differently 

Perhaps the most significant development is taking place in the investment market. 

Over the past three years, the approximately 39% rise in prime IOS rents has occurred while prime industrial land values have declined by around 6%. That divergence is significant because it suggests that the investment case for IOS is becoming less dependent on the future value of the underlying land and increasingly connected to the income that an asset can produce. 

The structure of that income is changing as well. Knight Frank data shows average IOS lease terms increasing from 6.0 years in 2023 to 8.0 years in 2025. At the same time, institutional and specialist owners are investing in asset specification, planning status and more structured leasing strategies. 

The result is a market attracting an increasingly sophisticated range of capital and investment strategies. But future performance is unlikely to be uniform. Planning status, location, accessibility, security, site configuration and suitability for local occupiers are all likely to become increasingly important determinants of performance. 

IOS may still represent a relatively specialist part of the industrial market, but its economic role is becoming harder to overlook. As the sector develops, the opportunity lies not simply in recognising growing demand, but in understanding which sites, locations and specifications are best positioned to capture it. 

Read the full Knight Frank UK Industrial Outdoor Storage Market Report 2026 for detailed analysis of occupier demand, rents, supply, investment activity, planning and the structural forces shaping the sector.