Data Centre Boom Drives Record Institutional Investment in Industrial Outdoor Storage
Bisnow · 10 September 2026
TL;DR
Industrial outdoor storage (IOS) — think truck yards, heavy equipment depots, and construction staging lots — is attracting record institutional capital in the United States, even as the trucking sector contracts. A $672 million refinancing deal between Realterm and Starwood Property Trust in August 2026, covering 78 properties across 830 acres, set a new benchmark. Institutional capital now accounts for 45% of IOS investment, up from 30% four years ago. Total IOS investment reached $14–16 billion in 2025, a 15% year-on-year increase. Data centre developers — who use IOS lots for construction staging and equipment storage — now represent roughly 20% of new demand. Nationwide vacancy sits at just 3.6%, well below the 6.5% industrial average, while rents rose 1.6% year-on-year to $11.07 per square foot per month in Q2 2026.
Our take
This is a US-market story, but it carries real signals for South African commercial property investors and developers worth paying attention to. The IOS asset class — essentially well-located, hard-surfaced open lots near logistics corridors — remains largely informal and fragmented in South Africa. Most such sites are owner-operated or leased through informal arrangements, meaning there is no equivalent institutional market here yet. But the underlying thesis translates: chronic undersupply, low capex relative to built industrial, and growing demand from logistics, construction, and increasingly data centre rollouts. South Africa's data centre pipeline is accelerating, with major campuses under development in Johannesburg, Cape Town, and increasingly secondary nodes. Those projects need staging yards, equipment storage, and laydown areas — exactly the IOS use case. Local industrial landlords and developers sitting on underutilised hardstand or surplus yard space adjacent to data centre corridors should take note. For SA investors, the broader lesson is that niche, supply-constrained asset classes with multiple demand drivers can outperform conventional industrial even in a difficult macro environment. As interest rates ease and institutional appetite for alternative real estate grows locally, IOS-style assets could attract formalised attention from listed property funds and private equity. Watch this space — particularly around the N14 and N1 corridors in Gauteng where data centre density is highest.