This site is part of the Global Exhibitions Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


The Next Market Cycle for South Africa Self-Storage: Insight From an Industry Operator


By Gavin Lucas

Self-storage operators in South Africa saw little growth over the past year. Rental rates have flat-lined, few new developments are under way, and the industry’s image suffers due to the existence of some poor-quality, low-cost projects. Market consolidation and the emergence of new, higher-quality facilities will help the industry reach the next market cycle.

The South African economy is in its second year of a recovery from the recent severe recession, however, there are few signs of acceleration in the underlying growth rates. While economic conditions have improved, these are anything but boom times for the S.A. economy or its property owners.

That said, the drawdown in the S.A. property market wasn’t as deep as that in other regions. Vacancies have gradually picked up in the office and industrial markets—more in the office market than anywhere else. Prime retail assets have been stellar performers, whereas secondary retail locations have underperformed. The impact has been limited new supply in the office, retail and industrial sectors.

It has been a slow grind for South Africa self-storage operators, in both vacancies and rents.

Stor-Age Self-Storage South Africa***

Industry Growth and Quality

The South Africa self-storage market is still in its infancy—20 to 25 years behind the U.S. market and 10 to 15 years behind the Australian and European markets. While the industry is starting to see the first signs of market consolidation in certain cities, overall, it's still dominated by poorly located, low-cost, low-quality facilities. Combined with a lack of professionalism, sophistication and public awareness of the benefits, self-storage still has a way to go before it reaches the next stage in its development lifecycle.

The South Africa self-storage market grew from an estimated 120 facilities in 2007 to approximately 220 facilities in 2010, with a lot of that development occurring during 2007 and 2008, largely in Johannesburg and Pretoria. This growth was characterized by a many poor-quality facilities developed on the urban edge or in typical “farm-type” locations. I estimate that of the 220 facilities, less than 25 percent could be classified as quality third-generation stores, with the significant majority being single-story operations.

« Previous12Next »
comments powered by Disqus