UK Industrial Outdoor Storage Market Deep Dive with Charlie Barnes of Roebuck

BREAKING DOWN THE UK IOS MARKET WITH CHARLIE BARNES OF ROEBUCK

 Charlie is an Investment Director at Roebuck running the IOS investment segment of the business. He joined from Mileway (a Blackstone portfolio company), Europe's largest last-mile real estate owner which was recapitalized for €21BN. He started his career at Valor Real Estate Partners, a specialist infill industrial real estate investor.

Roebuck's core competencies lie in utilizing occupier relationships to unlock transport-advantage IOS sites.

Charlie, take us through Roebuck’s journey into IOS.

Unlike most of the investor/operators in the sector, Roebuck has a long track record in the sector since 2010 and has managed and leased over 45M SF of IOS real estate to date, with strong ties to premier businesses within the 3PL, Fleet Servicing, Equipment Rental, Automotive, and Construction sectors.

Historically, interest in the IOS sector was for large format sites characterized with long indexed income profiles acting as income strips or covered land. We have purchased, managed, and sold across all IOS formats including biomass, car storage, container yards, rail integrated, and truck depots.

In 2015, we realized how important these sites were to the end users when we purchased a 53-acre Ford Cars site from a US Private Equity Fund (who owned the asset through a non-performing loan book). We ended up selling the site back to the tenant, generating an unlevered MOIC of 2.3x in 6 months.

Our latest IOS strategy was launched in 2024.

How does the occupier piece fit into IOS?

A sale-leaseback transaction is often the closest most investors come to speaking to their future tenant. Uniquely, we have a long track record of working with occupiers on their existing sites and expanding their footprints. When it comes to the IOS sector (and unlike Contract Logistics whereby a 3PL can pass £PSF rent through to the end customer contract), these facilities are often non-revenue generating but serve a critical infrastructure piece within a network of sites for maintenance, storage, and preparation of product.

Working closely with a handful of these occupiers has allowed us to de-risk acquisitions through manipulating existing in-place leases or pre-leasing during vacant site acquisitions such as our acquisition of Tankersley (pictured below – list to IOS List article here)

How are you combating the poor-quality nature of existing product?

How are you combating the poor-quality nature of existing product? Developing new IOS product from greenfield development normally does not stack. With an all-in cost of £15 PSF plus the cost of land acquisition makes the numbers tricky when most investors are looking to generate 8%-9% Yield on Cost. Meanwhile, refurbishing sites with existing surfacing seems to be the best route as they can be acquired at considerable discount to replacement cost.

For example, taking a high-density industrial property and reducing the built area by ~40% allowing for the creation of a new yard to achieve sub 25% site cover. From the technical perspective, this included upgrading existing drainage, re-roofing the existing warehouse, and upgrading security/lighting provisions. Link to LinkedIn Post here

What are your thoughts on the current market?

There is certainly less "IOS noise" in the market in 2025 versus when the US trend traveled across the pond. When the gun started in the summer of 2023, it felt like every man and his dog was out to get hold of IOS stock. The majority of those investors have refocused their efforts to small bay let industrial or XXL distribution assets where transactions are smoother, higher availability of data to underwrite, and generally less information asymmetry.

The small handful of experienced IOS aggregators currently have a "first mover advantage" in terms of market knowledge, technical knowhow, and developed pipelines. Noting that most investors are still trying to move up the "J-curve" to achieve economies of scale and synergies across their respective portfolios.

There is still plenty to go at for those who are willing to roll up their sleeves with ~£1BN of institutionally owned stock. IOS appears to be the last frontier of the industrial real estate ecosystem with the highest percentage of private/owner-occupier ownership.

Looking into the future, we are starting to see IOS feature on institutional investors' shopping lists, perhaps those with a lower cost of capital as participants become more comfortable with the sector. Peakstone Realty Trust's purchase of $490M IOS portfolio from Alterra somewhat points to what might happen at some point across the pond.

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To connect with Charlie, you can find him here.