FORTUNATELY FOR ME, I'VE ALWAYS HAD A TWO-WEEK BREAK over the holidays, as my main business is not a retail operation such as a self-storage facility. So this festive period has always been a great relaxing fortnight, spending time at home with my family. During this time, I've always managed to reflect on the last year's business achievements and think about objectives for the coming year.
For the European self-storage industry, 2002 was another exciting growth year; although the "City" (the U.K. financial world) lost some of its appetite for our offering as the listed players continued to rack up store-opening losses in the immature marketplace. The 30 percent growth in facility numbers continued, thanks in part to more independents entering the market. But most of the bigger players slowed their store-opening campaign to appease the doubting City.
In 2001, two notable U.K. acquisitions provided industry models for self-storage funding in the United Kingdom and Europe. Mentmore PLC (now trading as Spaces UK) acquired the nine-site Aardvark Self Storage Ltd. for $46.5 million (£30 million) and the three-site Rent-A-Space chain for an undisclosed sum. Hopefully, these two cases will help grease the hinges of the funding doors for existing and future independent operators and ensure the future of European self-storage growth.
The U.K./European self-storage market looks set for another year of double-digit growth. This growth will come from the vast majority of new conversions. The top seven operators look like they're going to make up 50 percent of the future market, with single-site independents and small-chain operators of two to five sites making up the other half.
The market is gradually changing as income streams become more easily accessible to entrepreneurs with proven track records. I believe quite a number of small-chain operations will be developed and quickly sold to the big boys that need to satisfy their growth targets with acquisitions and reduce their new-store opening losses.
How can the last 12 months be surpassed? It may be a challenge, but Europe's self-storage industry promises to be robust. Set your yearly ambitions high. Establish business goals now, if you haven't already done so. I wish you the best of luck. Just remember, the harder you work, the luckier you get.
Andrew Donaldson is the founder and chief executive of Active Supply & Design (CMD) Ltd. of Cheshire,