The votes are in and the flavour of the month is self-storage!

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At the beginning of Q4 last year, a client asked us: Are many of your other clients looking at self-storage?

Our answer: No.

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But within a few weeks we were approached by three new clients, enquiring about self-storage modelling. So, what triggered this sudden surge in interest?

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1. Surging Demand for Storage Space

The rise of online shopping and the trend towards smaller living spaces, has led to a growing need for additional space. Individuals and businesses alike are seeking to secure convenient storage solutions for their belongings. Self-storage facilities offer a flexible and accessible option, making them ideal in today’s dynamic market.

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2. Urbanisation and Housing Trends

As urban areas continue to expand, and mortgage costs remain high, living spaces are more compact and all available area is used for living rather than storing. Having a self-storage unit has become the norm for those in need of extra space without the commitment or ability to rent or buy a larger property.

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3. E-Commerce Boom

The e-commerce boom and transformed the retail landscape, with more businesses relying on online platforms for their sales. This surge in online retail has created a parallel demand for storage and distribution facilities. Self-storage plays a crucial role in accommodating inventory overflow for small businesses, with many of them offering shipping services as well. Even larger retailers are dabbling in self-storage as they look for more flexible warehouse solutions.

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4. Economic Resilience

The self-storage industry has demonstrated resilience during economic downturns. Even in challenging financial climates, people and businesses require storage solutions. The ability of self-storage investments to weather economic storms makes them an attractive option for risk-averse investors looking for stability in their portfolios.

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5. Low Operating Costs

Self-storage doesn’t take a lot of overheads, just a watertight unit and good security. Investors can potentially reduce operating costs further by placing solar panels on their roofs. More technological advancements can increase profit margins further – from state-of-the-art surveillance systems to sophisticated inventory management tools – technology has made it easier for investors to manage and optimise their self-storage investments.

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6. Room for Growth

According to Savills, the US boasts 9.44 sq ft of storage per capita, while the UK and Europe have 0.73 sq ft and 0.21 sq ft, respectively. And according to the National Association of REIT (NAREIT) self-storage has been the best performing asset class in the US since 1993.

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With a burgeoning demand for storage space and a sector that has proven it’s resilience, savvy investors and recognising the potential for substantial returns by capitalising on the self-storage boom. As the saying goes, “the best time to invest was yesterday, the second best time is now.”

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Thank you so much for reading. If this resonates with you then please get in touch, or sign up for our LinkedIn newsletter or join our mailing list for more.