Build vs Buy Analysis
Decide between building a new cold storage facility and acquiring/retrofitting an existing one. Model CAPEX, time-to-revenue, risk and expansion optionality — with Optimistic / Base / Pessimistic scenarios.
Build new (greenfield)
Buy existing + retrofit
Build new
Buy + retrofit
Fastest to revenueDecision heuristic (not financial advice)
- Time-to-revenue < 9 months critical → lean Buy.
- Design must support ASRS, transcritical CO₂ or GDP pharma → lean Build.
- Bank/ECA is unfamiliar with your market → Buy (brownfield) often finances faster.
- Facility must scale 2–3x in 5 years → Build with modular expansion joints.
Building your own cold store makes financial sense when you need stable, long-term capacity: owned facilities typically cost USD 900–2,000 per m³ to build but only USD 25–60 per pallet per month to operate, versus USD 15–35 per pallet per month for 3PL rental with no CAPEX. As a rule of thumb, above roughly 70–80% sustained utilisation over 5+ years, owning beats renting; below that, 3PL is cheaper and far more flexible.
Frequently asked questions
When is renting 3PL cold storage cheaper than building?
When utilisation is seasonal or below about 70%, or when the horizon is under five years. You pay only for the pallets you use and avoid CAPEX, permits and maintenance.
What CAPEX should I budget to build a cold store?
Roughly USD 900–1,400 per m³ for chilled and USD 1,300–2,000 per m³ for frozen, including envelope, refrigeration, racking and installation. Land, power connection and permits are extra.
What hidden costs appear in the build option?
Grid connection upgrades, backup power, commissioning, spare parts stock, maintenance contracts, and 1.5–3% of CAPEX per year in ongoing servicing.
- Cold Room Cost Benchmarks
- How to Write a Cold Storage RFQ
- Cold Storage Project Cost Center
- All Cold Chain Buyer Guides