A few years ago, I sold the company I founded, City Self-Storage, to a real estate group. The sale left me with mixed feelings. I was pleased my financial position was improved, but I immediately missed working with industry colleagues. I packed my office and moved to a nice, small office in the embassy district in Oslo West, Norway, where ... nothing happened and nobody called. After a few months, my identity crisis was full blown.
My business partner, Lasse Hoydal, and I brainstormed our next enterprise. Over sessions of pizza and beer, we discussed everything from developing software for the self-storage industry to opening a car wash. Nothing was appealing. We were restricted for a time from opening a new storage business by the mandates of our non-compete contract. So we invested most of our funds elsewhere and waited.
I moved to Nice, France, to study in a language school in Villefranche. Studying the intricacies of la langue francaise made me forget everything about my career dilemma. Then I observed how many people had difficulty finding storage space on the Riviera. Lasse and I concluded there was real potential here for self-storage (or self-stockage, as it’s called in France).
The non-compete agreement expired, and we decided self-storage was what we really knew and liked. We boldly moved to start over.
Learning From the Past
I wanted to avoid all the things I didn’t like about my former company. There was, for example, nothing wrong with working in five countries, but it involved a lot of travel and heavy costs related to regulations in these different markets. And I wanted to have a private life, not only work and travel. I developed a couple of golden rules:
- Keep it small.
- Choose a nice, warm place where you can bring your family.
- Do not purchase a property without seeing it in person.
Armed with these rules, Lasse and I founded Eurobox Self- Storage in 2003. Our objective was to build a smaller company with 100 percent focus on good cash flow. We also wanted to include containerized storage on the sites if possible. Shipping-container storage is a profitable industry in the United Kingdom. And an oversized parking lot is ideal for rows of drive-up containers in addition to the interior units.
The first property we bought was an old dairy plant outside Oslo. The only problem was I couldn’t view it in person, and there was already an offer on it. I reviewed the property on the broker’s website and e-mailed a bid the same day. A few hours later, we were the proud owners and had broken our golden rule No. 3.
A few months later, when my father told me about another property in Norway, we experienced how hot the real estate market had become. We didn’t even have time to look at photos online, so we bought the site unseen, breaking our third rule again. I finally decided the rule didn’t serve us well and struck it from our list.
Rule No. 2 was much easier to live by. As you can imagine, Norway can be a cold and dark place in winter. Having an office in Southern Europe would be a good change of environment. Since Nice is sunny and warm, it was the perfect place for work and holiday. Where else can you work self-storage during the day, and visit Monte Carlo to play the role of 007 in the casinos at night?
What Europeans Need
The objective of the new company was to limit the complications that occur from establishing too many stores in several countries. Eurobox has five stores in and around Oslo, Norway; one in Nice and another in Marseilles, France. Our largest store, with 750 units, is in Oslo. The other Norway facilities have 200 to 400 units, but each shipping container also counts as a unit. The two sites in France have about 200 containers each.
Suitable sites will always be difficult to obtain. In Scandanavia, it’s hard to secure a building permit in the city centers, so we have purchased properties and converted them. Many cities in Southern France don’t require permits for containerized self-storage. This allowed us to open our two sites offering only this service on two centrally located pieces of industrial-zoned land.
The company’s largest store, Oslo West, has 98 percent occupancy, although it doesn’t offer containerized storage. The other sites in Oslo are in a rent-up phase, but should reach the same occupancy in 12 to 18 months. The sites in France are also doing well, with 95 percent occupancy.
Although containerized storage is usually kept outside, the company’s newest store on the outskirts of Oslo will also offer indoor containers. This is an alternative for our customers to keep their goods in the comfort of a heated environment. An added benefit is building permits aren’t required for indoor containers, since they’re classified as temporary.
Marketing is done through newspapers, the Internet and online Yellow Pages linked to our website. Drive-by trade is also significant. After a year of learning and experimenting, the sites are filling filled up nicely.
So now Eurobox is up to seven sites. Moreover, rule No. 1, to keep it small, has yet to be broken. Self-storage is still fun, and one of the best ways to build value and positive cash flow in the real estate industry today. Compared to my earlier life with its enormous workload, financial risk and no free time, my post-sale days are a delight.
Carl August Svensen-Ameln is the chairman and majority owner of Cron Industries S.A., a holding company for Eurobox Self-Storage and other unrelated investments in France, Scandinavia and the United Kingdom. For more information, visit www.cron.no.
News From Around the World
U-Haul Names Toronto as Top Canadian Destination
The results of Phoenix-based U-Haul’s 2006 U-Haul National Migration Trend Report, “Top 25 Canadian Destination Cities,” indicate Toronto was ranked No. 1 for the fifth year in a row. Calgary, Edmonton and Montreal all held their positions respectively for the third year running. Ottawa, Vancouver, London, Victoria, Hamilton and Quebec City rounded out the top 10. The report was compiled from more than 83,000 U-Haul transactions occurring between Jan.1 and Dec. 31, 2006.
Big Yellow Collaborates With eBay Experts
Residents of Brighton and East Sussex, England, can now make extra cash by taking their unwanted goods to an eBay drop-off station at the local Big Yellow Self Storage. Auctioning4u has collaborated with the storage company to provide the eBay sales service. Now in its fourth year, the auction company has 10 drop-off locations, 25,000 square feet of storage space and a home-collection service.
Lok’nStore Breaks 1 Million Square Feet
U.K. storage company Lok’nStore’s acquisition of a new-build site in Harlow, Essex, England, brings the company’s total rentable square footage to 1 million, the company reported in March. The store will carry Lok’nStore’s distinctive orange branding and provide 69,000 square feet of self-storage space. The site, expected to open in spring 2008, has all the necessary planning consents and will cost approximately £5 million once fully constructed and fitted out.
Canada’s Storage Demand Booming
Canada’s demand for self-storage has not abated, The Chronicle Herald reported in March. According to the Canadian Self Storage Association, there are 2,800 such facilities in the country. The industry offers features such as climate control, 24-hour access and high-tech security. It has come a long way since 1984 when the first Metro Self Storage in Halifax was established at a dilapidated warehouse down on the docks.
Big Yellow Breaks Ground on Self-Storage in Dubai’s IMPZ
European self-storage operator Big Yellow broke ground on a five-building, 280,000-square-foot facility in the International Media Production Zone (IMPZ) in Dubai to cater to local companies as well as the residential community within the zone and neighboring developments. The construction, being carried out by Core Construction Co. and Steel Storage Middle East, is expected to be complete in 12 months. The facility will be “one of the most advanced warehousing structures in the Middle East,” according to Ryan Cornelius, chairmain of Big Yellow FZ, a franchise of UK-based Big Yellow Group PLC.
Also present at the ground-breaking ceremony were Fahad Hareb, operations manager of IMPZ, and Ihab Al-Ramlawi, managing director for Core Construction.
Big Yellow is a U.K.-based self-storage developer and operator. Launched in 2000, the company has purchased 58 storage sites, 42 of which are open. It aims to expand its portfolio internationally, providing more than 3.6 million square feet of storage space. For information, visit www.bigyellow.co.uk.
IMPZ, part of Dubai’s vision to develop itself into a global media hub, aims to provide a pro-business environment, sophisticated technology and community infrastructure to support and foster the growth of media-production companies from around the world. Catering exclusively to in the graphic-arts, publishing and packaging industries, it is an initiative of the Dubai government under the patronage of parent company TECOM Investments (a member of Dubai Holding). The complex will be housed on more than 43 million square feet of land in the heart of commercial Dubai. For details, visit www.impz.ae.