By Molly Bilker
Africa, the youngest sibling in the international self-storage industry, has begun the exciting transition to adulthood, with demand high and consolidation in process. Better-established operators, such as Stor-Age Self-Storage and XtraSpace Self Storage, are reaping the benefits of strong demand, while a tidal wave of technological growth works to inform customers and solidify the industry.
Market Heats Up
South Africa has about 70,000 self-storage units with an average occupancy of 80 percent, according to “HearOnEarth,” a blog by local freelance writer and researcher Matthew Campaigne-Scott. The Self Storage Association of South Africa claims the local industry is the fifth largest in the world. The supply of standard, garage-type units can't keep up with the demand, says Chris Harburn, owner of Giba Storage, a facility that opened in 2011 in Durban, in the KwaZulu-Natal province.
The continued enlargement of cities is a huge contributor to the industry’s growth, adds Abri Schneider, CEO of XtraSpace, which owns 17 facilities. "The urbanization and densification process happening in our country contributes positively to create strong demand," he says.
This year Xtraspace opened three new locations and purchased a former Toys R Us building in Durban it plans to convert to self-storage. The planned 600-unit facility, the company's second in the area, is close to King Shaka International Airport. It will include a business center with flexible offices for small companies, a meeting room and hot-desk facilities, a pool of desks that can be occupied as needed. It will also offer free WiFi and a courier depot operated by Parceljet Couriers. The success of the company's first Durban facility, which opened last year, has been a great success, giving the company confidence for the next one, according to Colleen Hunter, chief operating officer.
Real estate developer Acucap Properties has also expanded its self-storage portfolio. The company created a strategic joint venture with Faircape and SA Self Storage Investments (SASSI) this year to develop several sites. Faircape is a property investment, development and management firm that includes Stor-Age Self Storage among its companies. SASSI is South Africa’s largest self-storage investment trust.
The joint venture has produced 12 operating storage facilities, with nine under construction and an additional nine in the process of acquisition. The facilities will be rebranded under the Stor-Age name, according to Paul Theodosiou, Acucap’s managing director. Stor-Age operates more than 20 facilities throughout South Africa, with its corporate office in Cape Town.
In September, Stor-Age completed its acquisition of eight facilities in the Pretoria area from Public Storage, a South African competitor that is unaffiliated with the U.S. real estate investment trust with the same name. Stor-Age initiated the purchase in May and will rebrand the properties under its trade name.