The Evolving Customer
The expansion drive is largely a response to rising take-up in the first half of 2009, which came from a re-orientation of operators to the self-storage customer base. The housing downturn has caused the domestic market to fall away significantly, prompting operators to change their marketing strategies. They are now targeting more business customers and taking advantage of the increasing number of business startups. For example, Safestore has increased its business customer base from below 20 percent to above 30 percent.
Understanding the benefit of attracting new customers in these tough times, facility operators have specifically targeted small and medium business enterprises. Businesses seeking to reduce costs see value in using flexible and cost-effective storage space for archiving and materials storage.
Though business customers have increased, domestic users are still prevalent. There may be fewer people buying houses, but it appears homeowners are making better use of their space by moving belongings from spare rooms and lofts into self-storage, creating more useable square footage in the home. This is all part of a growing awareness of self-storage in the United Kingdom, something that, over the past few years, has been fundamental to industry expansion. The result is a sector with revenue of more than £360 million per year.
While it has not been an easy environment in which to trade over the last 18 months, there are signs of industry resilience, and the counter-cyclical nature of the business lends support for an upbeat outlook. Most operators report positive indicators including improved customer reservations, more telephone and Web inquiries, and higher Internet traffic. These, along with the prospect of an improving housing market, give cautious grounds for optimism.
Overall, the U.K. self-storage sector seems to be coping well with the economic changes of the past 24 months. The shift in marketing emphasis from domestic to business customers is not only a credit to the industry’s adaptability, but suggests self-storage is developing a more powerful platform from which to emerge from the downturn.
Tim Edghill is the European director of Jones Lang LaSalle Corporate Finance, a specialist real estate investment house of real estate professionals, accountants and bankers. With 18 years of experience, Mr. Edghill has been responsible for the creation and successful implementation of major disposition strategies for clients including J Sainsbury PLC, Railtrack PLC and Severn Trent PLC. He acts for numerous self-storage operators and investors. For more information, call +44 (0) 20 7399 5313; e-mail email@example.com.