Is open storage the new asset class in the industrial sector?

The below table shows typical rents for open storage land, comparing the spring 2024 rents with those recorded in 2021. Park Royal, Croydon and Heathrow stand out as the most expensive monitored locations at £10.00 psf, followed by Enfield at £8.00 psf and Slough at £6.00 psf. 

The table illustrates the sharp rise in rents in London over the last two years. Indeed, on average rents in this market area have increased by 77%. Rents for Class 1 sites have continued to increase over the last 12 months, although the rate of growth has slowed. This deceleration has been particularly marked in the regional markets, where high growth rates represented an element of catch-up with the London / inner south east and were starting from very low base rents.

_{Note: Stated ERVs assume a 1.5 acre (net useable) average Class 1 site scoring a minimum of 85 on the Carter Jonas classification scoring system. The site is assumed to be serviced and fenced, with a concrete surface, broadly unrestricted B8 use and available on a lease length of 3-5 years.}

Growth has been led by London and the inner south east, at 3.3% over the six months to spring 2024, and by 9.5% over the last year. Meanwhile, growth across the regional locations has been more restrained, averaging 0.7% over the last six months and 2.1% over the last year. Since 2016, Class 1 rents in London and the inner south east have risen by an average of 18.9% per annum, whilst the regional markets have seen a broadly similar rate of growth of 18.1% per annum.

To read about the current rental trends open storage, read our latest Open Storage Update report.