Self-Storage: Part of an International Community
|Copyright 2014 by Virgo Publishing.|
|By: John Fogg|
|Posted on: 12/14/2009|
Self-storage markets worldwide are at various levels of saturation in regard to development. The global business community has gained knowledge from watching the evolution of the U.S. industry, which has shortened the learning curve in many areas. The result is newer storage facilities, many of which are upscale and rich in amenities.
Outside of the United States, Australia has led the self-storage charge. Established players, prominent in the most populated areas, include Storage King, Kennards Self Storage, Guardian Storage, Fort Knox Self Storage and National Self Storage. The Gold Coast and Brisbane have the highest concentration of square meters of storage space per capita. Overall, Sydney and Melbourne have the highest total self-storage units.
Australian storage sites tend to be larger, containing more units than facilities in other countries. It’s not uncommon to find sites with 2,000-plus units.
Due to changes in the economy since 2008, new projects have become increasingly difficult to fund. The downturn has also caused a decrease in rental demand in Australia.
The European self-storage industry has seen extensive growth. Although that market is not as mature as the U.S. market, it contains areas of significant development. There are approximately 1,350 self-storage sites in Europe, with England having the most of any one country. Major players are Big Yellow Self Storage, Access Self Storage, Safestore Self Storage, Shurgard Self Storage and Easybox Self Storage.
“The downturn in the U.S. market has had a ‘knock-on effect’ to the European market,” says Barry Frost of Sentinel Systems Europe, a provider of self-storage management software and security systems. Although this may have slowed new development, he says the demand for storage space has increased due to plant closings, businesses collapsing, and people who have been forced to relocate.
In most European markets, there is room for more industry development. “There are still opportunities in Europe to build profitable self-storage,” says Les Kelly, president of Rite Place International, a Parker, Colo.-based company that offers self-storage design and construction-management services.
He points out that upfront construction costs in Europe are as much as 75 percent more than in the United States; but because there is higher consumer demand, operators can charge higher rates. This means higher net operating income that will more than offset the costs to build, he says.
Finding a vacant factory or warehouse to convert into self-storage is one way to trim construction costs and be in business faster. In addition, the government offers incentives to build new businesses in some areas, such as Wales.
Self-storage development is also expanding in Asia. Big Orange Self Storage now has five facilities in Hong Kong and Singapore. “The industry is in its infancy in Asia, and Asian banks are reticent to lend to this new and niche type industry,” says Angus Miller, the company’s CEO. “The capital side of the business has greater links to the global economy, and this aspect will be slow to recover.”
With an estimated 250 existing self-storage sites and more in the planning stages, Latin America is also seeing growth. Mexico is the leading country for self-storage in this region. Countries such as Brazil, Chile, Colombia, Costa Rica, Ecuador, Panama and Puerto Rico have modern self-storage facilities similar to those in the United States.
Although the global economy has taken its lumps, there are still markets in which demand for self-storage is high. Of course, finding quality real estate in the right location is a crucial element, no matter where development is considered.
The expansion of self-storage across the globe has helped solidify the products and processes of vendors and operators in the United States. The world is moving toward one big marketplace, with less restrictions and more free trade. Self-storage is truly becoming part of an international community.
Self-storage operators everywhere understand the critical role security plays at a facility. Tenants need to know their belongings will be protected. They also need to feel safe while on the premises. Studies show that one of the biggest reasons tenants choose to rent at a particular facility is site security.
Self-storage operators throughout Asia, Australia, Europe and New Zealand work diligently with security distributors to coordinate product choices and installation. The key is identifying the necessary system components and understanding how these pieces fit together, particularly how the system is unique to each site. Access control, individual door alarms, surveillance cameras and lighting are all considerations.
The goal is to create a visibly secure and pleasant environment that reassures renters, encourages prospects to rent, and discourages wrongdoers. Working with experienced self-storage security companies has helped many facility operators accomplish this.