Much like its U.S. counterpart, the self-storage market in the United Kingdom experienced a slowdown in construction of new facilities and worked hard to maintain occupancy levels in 2011. Many operators offered concessions to entice new customers. Yet the U.K. industry has shown greater resilience to the economic downturn than other commercial sectors.
A survey in mid-2011 by the Self-Storage Association of the United Kingdom (SSA-UK), in association with Drivers Jonas Deloitte, showed the U.K. self-storage market has weathered the recession intact and is looking forward to a period of steady growth. Respondent confidence has improved since 2010, with many operators expecting to raise rental rates in the coming year. The data also showed an increase in lengths of stay at self-storage locations.
The survey, now in its fifth consecutive year, collects data from SSA-UK members. Drivers Jonas Deloitte, a firm specializing in property consultancy, transaction and advisory services, was commissioned to produce the report based on the responses as well as its own analysis of factors relevant to U.K. self-storage operators. Responses were gathered from 82 separate companies and 440 self-storage facilities.
Drivers Jonas Deloitte estimates there are 800 self-storage facilities in the United Kingdom, with 36 percent owned by the largest operators including Big Yellow Group PLC, Safestore Holdings PLC, Shurgard, Access Self Storage and Lok’nStore.
Revenue and Occupancy Remain Steady
Despite the economic challenges, the leading self-storage companies the United Kingdom faired well over the past year. Big Yellow Group, which operators more than 60 facilities, posted a profit during the first half of 2011. The company reported annual store revenue increased by 7 percent and cash inflows from operating activities (after net finance costs) increased by 14 percent despite concessions. CEO James Gibson said the company is “encouraged by the continuing positive performance of this business."
One of the U.K.’s largest operators, Safestore Holdings, reported an increase in total occupancy during the third quarter. The company’s sales grew 5.4 percent to £24.1 ($39.2 million). Overall occupancy rose 3.8 percent points to 63.2 percent, and the average self-storage rental rate was 2.9 percent higher. The company also opened one new facility in Paris, brining the company’s portfolio to 119 self-storage facilities.