OUT WITH THE OLD AND IN WITH THE NEW--WHAT A GREAT BOOST TO THE NEW YEAR'S FILL-UP RATES, especially if everyone keeps the old and sticks it into storage! It's already 2003, and we wonder if the incredible growth of storage phenomenon can match last year's. Oh, yes, it can—and then some. Just the known sites due for development by the large developers indicate this year's potential is exciting. Everyone is still moving forward and increasing their portfolios.
The end of 2002 witnessed what was probably the first major competitive acquisition in the United Kingdom, when Spaces Personal Storage acquired Aardvark Self Storage Ltd. and Rent-a-Space. This made Spaces the largest self-storage operator in the country. Could this pave the way for other major companies looking to buy sites and lessen the gap in the facility-numbers game? Or is the market potential still so vast no one really cares who owns the most facilities in the widest geographical net?
Many feel the general lack of competition means anyone who owns even one facility is more than happy with his income and potential. The question is, are the major operators concentrating efforts more in developing new facilities in prime locations or purchasing existing self-storage sites?
I believe all the above is happening. Surely, everyone is watching everybody else. If you can afford to buy a good portfolio from one operator, why not? There will be no faster way to expand your empire. And if you're the operator being acquired, is this not one of the main reasons you started this business? To build a successful company, make some money, have some fun and sell for the big bucks?
Hopefully, all this growth will have a positive effect on potential investors who now see an appealing exit strategy. Anything that gets investors and banks interested and excited about the industry must be good, especially for the guy trying to get his first facility off the ground.
However, new financial avenues for the small, individual operator may not be good for older, well-established companies trying to keep this little gem of an industry all to themselves. Overall, 2002 was a great year for self-storage in the United Kingdom, and 2003 looks just as promising, regardless of the size of your business. Good luck to you all.
Graham Lomax is a founding director of Rabco Europe Ltd., based in Essex, England. Rabco Europe opened in August 2001 to expand The Rabco Corp.'s Orlando, Fla.-based operation into the European market. For more information, visit www.rabcoeurope.com.