Self-storage markets worldwide are at various levels of saturation in regard to development. The global business community has gained knowledge from watching the evolution of the U.S. industry, which has shortened the learning curve in many areas. The result is newer storage facilities, many of which are upscale and rich in amenities.
Self-Storage Down Under
Outside of the United States, Australia has led the self-storage charge. Established players, prominent in the most populated areas, include Storage King, Kennards Self Storage, Guardian Storage, Fort Knox Self Storage and National Self Storage. The Gold Coast and Brisbane have the highest concentration of square meters of storage space per capita. Overall, Sydney and Melbourne have the highest total self-storage units.
Australian storage sites tend to be larger, containing more units than facilities in other countries. It’s not uncommon to find sites with 2,000-plus units.
Due to changes in the economy since 2008, new projects have become increasingly difficult to fund. The downturn has also caused a decrease in rental demand in Australia.
Across the Pond: Self-Storage in Europe
The European self-storage industry has seen extensive growth. Although that market is not as mature as the U.S. market, it contains areas of significant development. There are approximately 1,350 self-storage sites in Europe, with England having the most of any one country. Major players are Big Yellow Self Storage, Access Self Storage, Safestore Self Storage, Shurgard Self Storage and Easybox Self Storage.
“The downturn in the U.S. market has had a ‘knock-on effect’ to the European market,” says Barry Frost of Sentinel Systems Europe, a provider of self-storage management software and security systems. Although this may have slowed new development, he says the demand for storage space has increased due to plant closings, businesses collapsing, and people who have been forced to relocate.
In most European markets, there is room for more industry development. “There are still opportunities in Europe to build profitable self-storage,” says Les Kelly, president of Rite Place International, a Parker, Colo.-based company that offers self-storage design and construction-management services.
He points out that upfront construction costs in Europe are as much as 75 percent more than in the United States; but because there is higher consumer demand, operators can charge higher rates. This means higher net operating income that will more than offset the costs to build, he says.
Finding a vacant factory or warehouse to convert into self-storage is one way to trim construction costs and be in business faster. In addition, the government offers incentives to build new businesses in some areas, such as Wales.