Strong demand for UK self-storage sector as occupancy reaches record high

Strong Demand for UK self-storage sector as occupancy reaches record high

Strong demand for self-storage space in the UK has resulted in occupancy reaching a record high and outstripping supply, according to new annual research into the sector’s major operator and customer trends from Cushman & Wakefield and The Self Storage Association UK (SSA UK).


The SSA UK, alongside Cushman & Wakefield, has produced its 13th annual industry report, which examines a range of data points and surveys on the growth prospects for the sector in 2019. The UK is a key market for use of self-storage, with 46% of all European space situated in either England, Scotland, Wales or Northern Ireland - despite consistent growth in mainland Europe.


The report estimates there are now approximately 1,582 self-storage sites in the UK, offering around 45.6 million ft² of space with an average store size of 28,800ft². The annual sector turnover has now reached €835.6m (£720m). Of the total number of sites, 381 offer predominately container based self-storage.


Some 78 new stores opened in 2018 of which 38 were container-based stores. Around 15% of the new space created in the sector was added through the expansion of existing stores, or fitting out previously unused space. With the majority of major cities well served, many of the new openings were smaller sites in regional locations. When combining the increase in occupancy rates and space available, there were an additional 1.3 million ft²  of self-storage space used by customers in 2018 which is a 3.9% increase.  


Elsewhere, the report states that occupancy on current lettable space is 77.2% which is an increase of 1.4% on last year. The UK average net rental rate has remained stable at €26.82 (£23.11) per ft² per annum compared to €26.78 (£23.08) for the previous 12 months. Operators in the East Midlands and the North experienced the largest gains in rental rates.


As well as interviewing operators, the report’s findings are also based on in-depth surveys with self-storage customers as well as the general public to understand usage trends and general awareness.


Key findings include:

·         71% of self-storage customers are aged 40-69-years-old. Only 10% are aged 20-34.

·         35% of customers have kept their unit for three years or more.

·         75% of customers travel less than 20 minutes to their unit and 60% travel less than 15 minutes.

·         21% of customers are divorced, separated or widowed.

·         29% of customers visit their store once a month with 23% visiting once or more a week.

·         56.9% of people cannot name a self-storage store in the local area

·         Over 50% of people have a limited understanding of the product, having either never heard of it or knowing little about the service that is offered


Rennie Schafer, Chief Executive, Self Storage Association UK, said: “The UK is a European market leader when it comes to the usage of self-storage, yet at the same time our annual report shows there is still relatively low awareness of the concept and the brands within it from the public at large. That is changing over time and the use of self-storage is undoubtedly reflective of the way we live and work. It is there for domestic reasons such as people moving house, a death in a family or starting a new relationship. Equally, growth in online businesses is fuelling the need for storage facilities and is supporting a wave of entrepreneurs. More than a third of the space is taken by commercial customers. Overall, occupancy levels and profitability growth within the sector indicate demand is growing faster than supply, but at a lower rate than compared with the previous 12 months.”


Oliver Close, Partner, Cushman & Wakefield, said: From an investment perspective, the growth and underlying fundamentals of the sector mean there remains significant interest. This is coming from a variety of sources including institutions and private equity as well as family offices. There is also definite evidence of consolidation in the market with only a limited number of mid-tier size operators. We are also seeing significant competition for development sites in the best locations as affordable opportunities are limited due to competition from a range of other land uses. Prominent locations are also highly sought-after as the physical presence of a store is a great permanent advert when overall public awareness is still limited.”


The report also looks at the state of the self-storage sector across Europe. In 2018, including the UK, there were 3,882 self-storage facilities totalling approximately 102 million ft² of space. Developed markets like Spain and Sweden are continuing to show consistent growth and Germany has also demonstrated significant development in recent years. In addition, there is now storage in almost all the Eastern European countries with markets like Poland, Romania and the Czech Republic having large purpose-built self-storage stores with some major brands developing.

Related News