Figures applying to the European storage sector often differ, yet it’s important to compare markets. Steel Storage Europe Ltd. recently tallied the results of a U.K.-wide self-storage survey, aimed to track industry size by number of facilities and net-leaseable space and growth. The survey, now in its third year, was presented at the European Annual Self Storage Association conference in Prague last March.
Using the Yellow Pages to estimate total self-storage facilities in the United Kingdom, the survey revealed 1,632 entries fell under “storage” or “self-storage.” Upon clarification, 976 entries were identified as self-storage facilities. The number comprises the top-10 operators, in which many companies have multiple properties, as well as the independent sector. Large operators include Safestore with 70 stores, Big Yellow with 36 facilities and Shurgard with 18 sites.
Headline growth among the top 10 is roughly 10 percent a year, the survey showed. Within this large-operator category, 231 sites average net-leaseable space of 44,000 square feet, totaling more than 10 million square feet combined. The group operates 24 percent of the total number of facilities; 52 percent are owned by traditional operators and 24 percent fall in the container-storage category.
Reflecting on these numbers, it’s apparent large operators hold a significant position, but they’re not controlling the industry. The U.K. industry is still young; enormous opportunity exists for independent operators and smaller companies to expand and open more sites.
The independent market includes two sectors: traditional (internal units) and containerized self-storage, which breaks down as follows:
|Number of Facilities||506||239|
|Total U.K. Net Leaseable||14,354,856 SF||6,817,305 SF|
The top-10 owners charge prices up to 12.5 percent higher than their independent counterparts—highlighting the emphasis marketing and operations play within the industry.
Large U.K. operators maintain a 75 percent occupancy rate with annual revenues of £620,000 per site, calculated by using the average price per square foot (for major operators) of £18.80 a year. Independent facilities earn approximately £340,000 annually with 75 percent occupancy; but smaller sites and lower achievable prices (approximately £16.08) lowers the entire yield.
Traditional U.K. self-storage includes large and independent operators for a total of 737 sites. The term “traditional” describes mainstream self-storage made popular in its original markets—the United States and Australia—whereby customers rent on flexible terms, securing their units with individually owned keys. While independent companies are growing at an annual rate of approximately 18 percent vs. large operators at 10 percent, the latter manages facilities that are approximately 55 percent larger.
The traditional market as a whole has about 24 million square feet of built, net-rentable space, according to survey figures. Considering the U.K. population hovers near 60 million, simple math deduces the industry offers .3 to .4 square feet of storage space per person. Compared to the U.S. market, which stands at approximately 5 square feet per head, the U.K. industry is still in its primary growth stages with mass opportunities for change.
For example, 11 percent of independent traditional self-storage features container storage as well, says the survey. The combination of traditional and containerized storage possibly reflects planning-restriction issues. Containerized storage often provides an acceptable ancillary income to traditional facilities. However, containers aren’t the only solution; single drive-up units or drop-down units are effectively the same thing on a metal-skid base. It’s a good way to eke a bit more net-lettable area out of your site.
Nobody thinks the European or the U.K. market will be as saturated as in the United States. But certainly, the sector has a long way to go. It could probably grow to 1 to 1.5 square feet per capita in the United Kingdom, which is close to the status of the Australian market.
The success of the U.K. self-storage industry survey has prompted Steel Storage to investigate the European self-storage industry. The survey will aim to identify the overall size and trends comparable to those of the more mature markets in the United States and Australia. As countries such as France, Germany, Holland, Ireland and Spain expand their own self-storage sectors at an ever-increasing pace, the European storage market will be closely observed by many over the coming years.
Spain for example, has experienced a vast increase in facilities over the last two years with companies such as Bluespace and City Self Storage operating 20 facilities across the country and another 30 operators based in Barcelona, Madrid, Valencia and other cities. The European Steel Storage Survey offers a complete picture of the industry to compare with other markets as well as provide important information for investors—and potential new entrants—in the industry.
To receive a complete copy of the most recent Steel Storage U.K. Self Storage Industry Survey results, visit www.steelstorage.net.
Michael Homan is the managing director of Steel Storage Europe Ltd., a U.K. branch of the Australian company Steel Storage Group, a storage design and construction company. Steel Storage has been serving the global self-storage market for more than 15 years, with the U.K. branch alone contributing to the development of more than 500 facilities across Europe. For more information, visit www.steelstorage.net.