A Year for Expansion: Self-Storage in Canada 2007

In the Capital Regional District (Victoria), no new supply was added in 2007, although a facility of approximately 29,000 square feet was opened in Central Saanich last February. The current supply is estimated at less than two square feet per capita and comprises approximately 640,000 square feet in 20 facilities. The average facility size is 32,000 square feet.

Rents were increased significantly in the trade area in 2007, following the lead of the two facilities that entered the market in 2006. The last survey was made in May 2007, and the range in rents was from $17.88 to $22.56 per square foot.

Total supply of storage in the Nanaimo Trade Area is 317,000 square feet in 14 facilities, or approximately 4 square feet per capita based on the population of Nanaimo City or 2.14 square feet per capita based on the regional trading area population. The average facility size is 22,647 square feet. The inventory of self-storage includes a large proportion of container storage (13.5 percent of the supply) as well as first-generation older developments.

Rents in Nanaimo are significantly lower than those of either Victoria or the Vancouver Lower Mainland, ranging from $9.36 to $16.20 per square foot per annum. High occupancies of 95 percent or more were recorded when the trade area was surveyed in May and September 2007.

Overview of the British Columbia Market

The effect of the tightening of financing is to slow development in the B.C. region. Developers seeking financing are faced with higher equity requirements, more stringent qualification requirements, higher interest rates and higher fees.

In the past year, the B.C. market has been characterized by very few sales except for three sales of smaller facilities in smaller towns, and one sale of a smaller suburban Lower Mainland facility that changed hands twice in 2007. A four-property portfolio was tied up for eight months, but the prospective purchaser recently decided not to complete the transaction.

High land prices and rising construction costs are resulting in developers having difficulty making the numbers work on new projects in urban areas. Three developments have been dropped because of high costs, and one large expansion to an existing facility has been deferred. However, rents are still stable or rising in most markets.