By Tatiana Kolyuchkina
Self-storage is a young yet fast-developing industry in Russia. While the country’s overall economic situation remains unstable, self-storage has been able to grow as businesses close or downsize, and individuals buy household appliances and other goods before prices go up. Consumer demand has made it possible for the industry to expand despite the rise in taxes, the drop in investment activity and the increased cost to build facilities.
New storage operators entered the market this year, and many existing ones opened new facilities. Last spring, the product became available in Siberia for the first time, with the opening of properties in Tyumen and Novosibirsk. The latter is the administrative center of the Siberian Federal District, one of Russia’s nine federal districts, and the country’s third most populated city.
Self-storage exists in five cities:
- Moscow, population 12 million
- St. Petersburg, population 5 million
- Novosibirsk, population 1.5 million
- Kazan, population of 1.2 million
- Tyumen, population 697,000
Most of the sites are still centered in and around Moscow. There are seven big players and about 10 small companies with three or fewer facilities.
Obstacles to Growth
The main restriction to development is the lack of suitable buildings in Moscow. Many developers, my own company included, have chosen to convert existing warehouse space to self-storage.
Another hindrance is the murky and unclear Russian laws. Due to a hangover from Soviet days, real estate (the warehouse sector in particular) is loosely governed, and legislation remains vague and uncertain. Basic tasks such as establishing title ownership, getting permission to build, and receiving electricity and water is a tremendously fraught and time-consuming process. The lack of clearly established fire-safety standards for self-storage is just one example. All of these factors have stifled industry growth.
Although the Russian Self Storage Association was established in 2013, its agenda doesn’t include the legal support of local self-storage businesses. It also can’t speak for the industry on the federal level due to the relative insignificance of this young industry. As a result, many operators don’t recognize the value of such an organization and speculate that it might be too early for a national association.
The Russian self-storage industry faces many challenges. Still, growth is on the horizon as industry developers, investors and owners recognize the need for self-storage in this country.
Tatiana Kolyuchkina is chief specialist of commercial department at Samosklad Self-Storage in Russia. The company opened its first facility in 2011 and currently operates three facilities in Moscow. Samosklad plans to open 20 to 25 facilities by 2018. For more information, e-mail [email protected]; visit www.samosklad.ru.