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Challenges in the Maturing European Self-Storage Market

By Rennie Schafer Comments
Europe was a relative late-comer to the self-storage game. After the industry emerged in the United States, it moved to Australia and New Zealand before making its way to the United Kingdom and, finally, Continental Europe. The pattern of growth, however, has been similar: A few innovative entrepreneurs kick-started the business, followed by the entrance of some larger operators with significant capital who increased awareness of the product. This led to more small and mid-size operators, who ultimately offered the larger players acquisition targets, and the industry began to consolidate.

Today, there are more than 3,200 self-storage facilities across Europe, more if you count the small container-based sites. The industry is maturing, but with that growth comes challenges. What makes self-storage unique in this region, and what does the future hold for this market?

Language Barriers

Despite the European free market, the self-storage industry remains fragmented. There’s no single operator that has coverage across Europe. Shurgard is the only brand that has any significant presence, with stores in seven countries. However, while it has sites in many of the major markets, like Germany, Sweden and the U.K., it has less of a presence in South or East Europe, with no stores in Italy, Spain or Switzerland. All the other operators have stores in only one or two countries, or a single region such as the Nordics.

A Shurgard facility in LondonEurope is really made up of a series of submarkets. Each has its own major brands, mid-tier operators and small independents. The language barriers are a major reason for this, making centralized management and the use of customer-service call centers more challenging. Language also limits operator marketing campaigns. Differences in building and planning laws, staff entitlements and other local laws also make it difficult to operate across countries.

Looking at each country in isolation, you’ll see significant variances. For a start, markets like the U.K. (0.65 square feet of storage per person) and the Netherlands (0.54 square feet) have significantly more supply than Italy (0.03 square feet), Germany (0.06 square feet) and even Spain (0.21 square feet).

Knowledge of the product differs greatly across Europe, with solid and growing awareness in the Nordic countries as well as the Netherlands and the U.K., but much lower public awareness in other regions. There are many Europeans who have a potential need for self-storage but aren’t considering it as an option because they’re simply unaware of it. Or, they might also fail to understand the fundamentals of storage use, such as “you lock it and keep the key.” This is an ongoing challenge for the industry.

The lack of awareness is also partly a language issue, as “self-storage” is an English term that doesn’t always translate into other tongues. In English, the name is a very clear descriptor of the product. In other languages, it often gets translated into terms that also mean warehousing. It might even be interpreted as a place where people are stored!

Land Scarcity

The real estate market has limited the growth of the European industry. There’s simply less land available for development than in the U.S., and it’s usually more expensive. Operators need to maximize the return on their footprint, which usually means building multi-story facilities and offering few drive-up units. The traditional ranch-style developments found in the U.S. are almost non-existent in Europe.

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