Industrial Outdoor Storage (IOS) is emerging in Europe and has grown in popularity among institutions in recent years. IOS provides storage space and facilities for businesses that require outdoor storage of goods, equipment, and/or vehicles. IOS facilities include various property types, such as vacant land, fenced yards, container yards, parking lots, and specialised storage facilities. The IOS market in Europe is new and emerging compared to a more mature market in the US. The transactional data is therefore slightly more limited and there is not, as yet, a "standard" way of proceeding in this respect
The following however should be considered at an early stage when purchasing an IOS facility or negotiating an IOS lease:
ESG - IOS facilities are more likely to be subject to environmental regulations and permits. Land that is currently used as IOS is often contaminated or illegally occupied. Liability in respect of issues need to be dealt with in the purchase and sale agreement and/or lease.
EV charging - It is also worth considering whether EV charging points could be placed on the IOS site and if so, whether those chargers may be used by the larger overarching industrial area. Licences will need to be entered into in relation to these.
Permitted use – The planning permission for the site should also expressly cover the proposed storage use. We have seen many instances where the planning permission is not sufficiently extensive, resulting in wider transactional delays. Value will be added to the IOS site if it can be repurposed. Whilst permitted use of the IOS site should naturally align with the planning consent, it should likewise not be too restrictive, and flexibility should be incorporated within the drafting.
Yield up - Agree at the outset the condition that the premises shall be returned in at the end of the lease term. This has been a contentious aspect in many of the IOS matters on which we have acted this quarter, the tenant expecting a far more limited obligation than ordinarily institutionally expected.
