When the entire station site was in the process of being redeveloped into its current incarnation, the original carriage shed was demolished to make way for the transport headquarters incorporating bus servicing bays and office administration block for the whole of Isle of Man Transport; this necessitated the building of a replacement carriage shed, smaller than the previous incarnation and located on the site of the old coal yard at the mouth of the station entrance, parallel to the Douglas River.  This new shed ensures that the service fleet are kept undercover when not in use (it had been common practice for many years to stable the stock in the platform roads and only place them in the old carriage shed for the winter months) as well as providing covered storage for some of the non-operational fleet.  The shed is constructed of steel girders and clad in green corrugate, and has four carriage roads being home to the operational fleet as well as No. 5 "Mona" (owned by the Isle of Man Railways & Tramways Preservation Society), F.27 and F. 28 (the "Empress Vans" of 1897) and the incomplete structures and component parts of the ex-County Donegal railcars.