The Industrial Open Storage (IOS) sector has grown rapidly, shifting from single-site owner-occupiers to strong demand for leased spaces. Limited stock is driving rental growth, and the quality of sites vary. Some sites have been owner occupied for many years without the management information and processes expected by institutional investors, making thorough Technical Due Diligence (TDD) essential.

Top tips when acquiring open storage sites

Tenants use IOS plots for a range of purposes including; car parking, fleet storage, last-mile distribution, waste processing, and EV charging. Thorough technical due diligence is required early to provide strategic advice on risk mitigation and future management of the site.

We explore key considerations for site acquisition, hidden risks, and environmental impacts below.

Size and layout

A hidden issue we see during our site inspections is the shift of boundaries over time, and these no longer corresponding with the title that is being purchased. In such cases, changes are not always visible from the ground; we therefore collect GPS references, drone data and imagery to overlay this against the title to identify any discrepancies or encroachments.

Verifying the size and shape of the site on the ground matches that of the title to capture any potential areas of trespass.

Inspecting boundaries thoroughly is key to ensure no openings have formed from adjoining landowners or long-term routes over the site which may have acquired a right over time. Once we have obtained the data from our inspections, we can assist with drawing up plot layouts in consultation with the purchaser to meet its requirements.

Hard standings and utilities

Check the availability of essential utilities like electricity, water, and sewage systems. Ensure that there is sufficient power being supplied to the proposed site and it has the appropriate capacity for its intended use. There has been a significant shift in usage trends, with a wide range of different uses for these sites e.g., some plots are utilised for storing scaffolding or road signage for electric truck charging. So, ensuring the available supply to the site is appropriate for the likely occupiers is essential.

Supplies to some sites may have been downgraded by the tenants over time to avoid paying standing charges on a power supply they are not using. That supply would then be allocated elsewhere by the DNO meaning a separate application and additional expenditure is required to increase the supply to the site. Depending on the arrangement and orientation of the site, it may be possible to off-set any shortfall in power supply from the grid with a PV array and battery storage to form a Micro-grid. Our in-house Energy Solutions team can advise further in this regard.

For open storage use, the condition of the hardstandings is key. Some tenants may require full reinforced concrete hardstandings  with integrated drainage and others may require a hardcore base only. However, the condition of the hardstandings will deteriorate over time and costs for repairs can be significant.

Mapping high resolution drone imagery onto the measured survey data, our survey notes, and engagement with our cost management team allows us to provide robust costs to work into your proposed bid for the site.

Intensity of use of the sites can change significantly overtime. Site survey can provide an insight to how well the hardstandings are performing currently and suggest measures to ensure longevity.

Building fabric implications and environmental contamination

Past land uses should be investigated to detect potential contamination from prior industrial activities and address any hazardous materials. Buildings with significant damage, especially those containing asbestos, can substantially increase costs even if they’re to be demolished.

Surface water and foul drainage to sites can vary significantly. If the below ground drainage system is in poor condition and situated beneath a heavily trafficked hard standing, it could result in ground movement and damage to hard standings or buildings. Also, some sites may not be connected to the mains drainage.

Often, tenants’ attention will only be drawn to drainage when there’s problem, therefore, in some circumstances a leak could be left for some time before being dealt with. A lack of maintenance from tenants and landlords over time could result in drainage being blocked and contamination of the sub-soil. In addition, it is possible the below ground drainage could have been amended or extended on an ad-hoc basis over time. It is vital to inspect drainage connections and the condition of below-ground drainage systems to assess appropriateness, contamination risks and potential costs.

The liability of ownership and benefits of planning ahead

Conduct a thorough title search to identify any legal disputes or issues with the property ownership. One potential hidden risk is the long-term liability of owning a contaminated site, which may not be officially recognised by local authorities but could be causing offsite pollution.

Accessibility and planning

Access routes to any site from key transport links should be carefully considered. Some may include shared access routes, bridges or roadways that are owned or maintained by third parties. A comprehensive survey early in the process can resolve these issues prior to acquisition. This can also identify any potential shared drainage issues, such as accessing a pump located beyond a railway. Ownership and maintenance responsibilities can be complex, but understanding these early is crucial.

EPC and Decarbonisation reporting

Any conditioned buildings that are present on site will potentially require an EPC. Many of our clients require high level advice on the EPC status of the buildings on the site and measures they can put in place to generate an improved rating and to reduce the carbon footprint of the site. We therefore provide reporting on the most efficient measures to achieve this and approximate costs of implementing these.

We can help!

Managing open storage sites requires strategic planning for efficiency, compliance, and sustainability. At Hollis, we help clients assess location, infrastructure, and risks to protect their investments.

Our ESG experts provide insights on environmental impacts and sustainability, and with growing demand for energy efficiency and carbon reporting, we offer guidance on integrating EV charging and PV systems to enhance energy supply.

With in-house specialists in PV, cost management, environmental consultancy, engineering and much more, we deliver well-rounded support to futureproof your sites.

Get in touch with Mike Turner, our IOS Lead, or Russell Garnett, Head of Environmental for bespoke solutions on your next project.