By Pavel Matveev
The self-storage industry in Russia has recently picked up as economic conditions improve. The first facility opened in Moscow in 2007 but closed after the downturn of the world economy in 2008, which stifled all new developments. However, since 2009, interest in self-storage development has returned to the market.
Several players have entered the Russian self-storage market in a short period of time. Mobius, Skladovka and Vashstorage all recently opened facilities in Moscow and St. Petersburg. Skladovka is the only of the three to develop facilities from scratch. Mobius offers mobile self-storage units, while Vashstorage rents existing warehouses by reorganizing the spaces with mezzanine and partitioning systems.
The leading operator in Moscow is Skladovka, with seven facilities currently renting or being finalized. Unlike its competitors, the company is developing new facilities under western standards instead of renovating existing buildings. Most new facilities in Moscow use mezzanine partitioning in warehouse-like buildings. Developers prefer not to build facilities with multiple floors because it takes significantly more time and makes the process more complicated.
All facilities in Russia are heated and have 24-hour security personnel onsite. Most consumers would never consider leaving their belongings at a facility that didn’t have ample security or lacked home-like conditions for storage. Along with Russia’s cold climate, these factors place financial pressure on operators to offer heated units and invest in security.
The major challenge for self-storage development in Russia is the bureaucracy of local authorities. The average investment cycle (time from project initiation until the facility is opened) is around two and a half years. Of this, about six months is spent on actual construction, with the rest of the time devoted to obtaining hundreds of various permits.
Other barriers to entry are the cost of construction and the availability of utilities near development sites. A new facility can be built for roughly $3 to $3.5 million, not including land, which should be estimated at no less than $500 per square meter. Central heating and electricity can cost another $1 million.