A Latin Solution

Serge Kaoune Comments
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When I co-founded Easybox Self Storage in 2000 with the objective of developing self-storage in Italy and Spain, I admit I felt a certain amount of apprehension. Why were we the first to develop in these countries? Was the product just a Northern European phenomenon? What if it did not appeal to the Latin mentality? Five years later, it’s obvious my fears were unfounded. The Spanish have taken to storage like ducks to water, and Easybox is no longer alone in its ambitions.

Spain's Demand Centers

In Spain, it’s easy to see why there should be a demand for self-storage. Spanish cities are population-dense by nature, and the labor force is becoming more mobile within the country. Approximately 78 percent of the country's 40 million people live in the towns and cities. In Madrid alone, with a population in excess of 3 million, 600,000 new homes have been built and occupied every year for the past three years.

This growth is partly to satisfy an influx of people to the capital from the rural areas. It’s also due to young Spanish people who now tend to purchase their own homes as soon as they become part of the active population rather than continuing to live with their parents until (and sometimes beyond) marriage. With a booming economy, growing purchasing power, continuing construction and a feel-good factor absent in many other European Economic Council (EEC) countries, properties are changing hands at ever increasing prices.

Barcelona, between a range of hills and the Mediterranean Sea, is a bustling city of 1.5 million people and arguably the most dynamic and prosperous commercial center in the country. Enormous apartment blocks house hundreds of thousands of people whose only storage space seems to be the outside balcony. The city has become a popular venue for international trade fairs and is one of the largest container ports in the Mediterranean. The high-speed rail link with Madrid will add to the importance of Barcelona as a business center.

Other large cities such as Valencia, which will host the Americas Cup in 2007, and Malaga in the south have experienced substantial growth in recent years and offer tremendous potential for our industry. Only Seville among the larger cities struggles to overcome a high unemployment rate; but it remains a very popular tourist resort and cultural center.

Roadblocks

But all is not perfect for the self-storage operator in Spain. While potential customers may be plentiful, properties that fit the requirements of visibility, access, size and, of course, affordability are much harder to find. Not only is there a strong industrial real estate market, but zoning changes in favor of commercial, office and residential use/construction have permitted property owners to reassess the value of their holdings, relegating industrial builders to areas away from the self-storage customer base.

This development trend may be less of a problem than it would be in other countries, since Spain has taken full advantage of the EEC subsidies available to improve its transport infrastructure. Road communication in and around the major Spanish cities tends to be excellent. Thus, the inevitable proliferation of self-storage facilities over the coming years will likely take place outside city centers.

Construction regulations are another hurdle. Municipal authorities have different regulations and are not consistent; however, the fire department usually has the strongest say. A thorough understanding of the rules and regulations is essential for negotiating with local authorities and can save many months in the process of obtaining licenses. A year or more of delay is common when there is a backlog of applications. But if an application is properly presented and negotiated, the wait can be drastically reduced. For example, our 88,000-square-foot facility in Barcelona was built and opened for business 10 months after we purchased the land.

Reaching Customers

From an operational point of view, the Spanish self-storage market varies little from that of other countries. However, referrals seem to play a larger part in attracting customers than in more northern European countries. The average length of domestic customers' stay is slightly shorter than those of our Northern counterparts, but this may be because of the novelty of the product. It’s also necessary to cater to "Spanish hours" and allow customers access until well into the night; an efficient access-control system should eliminate any potential problems.

All in all, operating self-storage in Spain has much to recommend it. The people are friendly, the sun shines most of the time, and if you can find the sites or properties, the frustrations are no more than in any other country. And if you cannot, there’s always mañana.

Serge Kaoune, a French national, is the co-founder and country manager for Spain of Easybox Self Storage. A pioneer of self-storage in the Italian and Spanish markets, he has been involved in the industry since 1996, mostly in France with Abacus Self Storage, and as an operations manager for Access Self Storage. Easybox operates six facilities in Barcelona and Madrid, Spain, and Milan and Rome, Italy. For more information, e-mail skaouane@easyboxstorage.com.

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