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A Young but Blooming Self-Storage Market in South Africa

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By Heinrich du Plessis

Bloem Self Storage***The South Africa self-storage industry is still very young. Though there are some major players, they mostly operate in the region’s six biggest cities: Bloemfontein, Cape Town, Durban, Johannesburg, Pretoria and Port Elizabeth. When you drive through smaller cities or towns, you do notice smaller “one-man-operated” sites; but the local population is largely uneducated about self-storage, and most view facilities as small, out-of-town places to store goods.

One reason is the industry hasn’t been property marketed. You can find very little information online about self-storage in the region. Possibly another reason is many owners only build a single site to fund their own retirement.

The facility I manage, Bloem Self Storage in Bloemfontein, South Africa, opened 10 years ago as one of the area’s first purpose-built storage facilities. Following are my observations on the local market, including its trends and challenges.

Consumer Awareness

A big challenge we face in South Africa is crime and the public’s perception of self-storage safety. Bloem has a guard at the gate to monitor anyone coming in and out. The property also includes a number of basic security features such as electric fencing, video cameras, and, of course, vigilance from all staff. We’ve minimized the crime risk of which so many people are afraid. The public will understand this better in time as more people use storage and refer their friends.

We’d like more people to be educated about self-storage. To achieve this, my company maintains a well-populated website. We don’t do a huge amount of advertising, as the facility is well over 90 percent occupied. Bigger companies do more marketing and education, so over time, people will take more notice of the industry.

Development

Most storage developments in the area are by bigger companies and are generally concentrated in cities with airports. Distances are vast in South Africa so, for now, it doesn’t look like the big players are willing to break into the smaller towns. Another reason for this is the cost. It’s too expensive to build in a smaller city, which has a lower yield and rental rates. Staffing would also be an issue, as area managers would need to drive the long distances between facilities every month.

When looking at facility design, smaller ones tend to stick with brick and mortar. This might be done out of habit, even though there are other options these days. Another reason is it can be expensive to import new materials. Some of the newer options I’ve seen used include polyvinyl chloride and light-gauge steel-frame construction. Many developers are also choosing to incorporate green elements, such as solar panels and features to reuse rainwater for irrigation.

Smaller towns don’t have multi-story storage buildings, as it creates more legalities with hoists and lifts. Generally speaking, South African customers aren’t fond of hoists and prefer ground-floor units. Big cities now feature some five-story big-box buildings with solar panels and other features, but they’re expensive to build.

Rental Rates

South African customers are looking for several things when they seek storage. Price and security are at the top, followed by location or convenience of entry, and flexible access hours.

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