Consumer awareness of self-storage is also low among people living in major cities. It will take some time before the industry becomes known to a wider population and people begin to trust self-storage operators with their belongings.
It’s also worth noting that Russia is very diverse in terms of income per capita. Moscow citizens have the highest personal income, earning an average of $21,000 per year. Saint Petersburg workers are second, while those in most other cities make significantly less.
Despite the self-storage industry's early troubles, its future is very bright. As people learn more about the availability of this service, self-storage will become more popular. In terms of development, it’s estimated Moscow alone needs at least 30 more facilities in the nearest future to satisfy the growing demand.
Unlike many western populations, most Russians live in small apartments (40 to 80 square meters), and the population density in major Russian cities is very high. Moscow, for example, is rated the second-most densely populated city in Europe. These facts suggest the trend toward out-of-home storage is here to stay.
Expansion to other regions will start soon as the nation’s economic situation stabilizes and personal income improves. However, lease rates in newly developed municipalities will probably remain significantly lower than in Moscow or St. Petersburg.
The significant growth potential of the market means self-storage facilities are expected to become the asset of choice for institutional investors in Russia. The only obstacles keeping them from investing now is the lack of a positive track record and overall statistics.
Russia Self-Storage at a Glance
- There are 12 self-storage facilities operating in Moscow, with five more under construction, and two in St. Petersburg. No other cities offer self-storage.
- The average facility has three floors and approximately 5,000 square meters of rentable space.
- There are eight mobile self-storage facilities in Moscow.
- Total rentable space is about 70,000 square meters. The average unit size is 5 square meters.
- The average revenue per square meter is about $30. Revenue depends on unit size and duration of the stay.
- Most operators offer a wide range of services such as packing, loading and unloading, and transportation.
- The average facility employs four people. Some services, such as security, are outsourced.
- Most customers are households. Business customers make up roughly 15 percent of the market. This is because small businesses are still rare in Russia. The economy is driven mostly by large corporations.
Pavel Matveev is the general director of Sklad-Activ, a company developing self-storage facilities in Russia. He began working with self-storage operator Skladovka in 2009. Previously, he was an investment vice president for a private equity fund. To reach him, e-mail email@example.com .