Although Spanish self-storage did not emerge until 2001, its expansion and acceptance has been some of the fastest in the “Old World.” In fact, this market’s growth is higher than the European average. Spain ranks No. 4 in the European Union in terms of the number of self-storage facilities, behind Great Britain, The Netherlands and France. And the prosperity of Bluespace, the country’s largest self-storage operator, matches that of the general industry.
The flourishing of Spain’s storage industry is the result of large, latent demand driven by the country’s social and demographic conditions, which have led to an increased need for residential and commercial storage in major urban areas:
- Metropolitan areas such as Barcelona, Madrid and Valencia boast large populations.
- Changes in the residential real state sector have resulted in higher prices and the construction of much smaller houses with square footage below the European average.
- Spanish disposable income has significantly increased, and more people are buying houses, and need storage during their relocation.
The market’s spectacular growth is also due to the increase of public knowledge regarding self-storage. This has happened due to factors like proximity, visibility, the Internet and, of course, the high advertising investments of operators.
According to the figures provided by the Spanish Self-Storage Association, approximately 70 storage facilities are operating in the country:
- 39 percent are in Catalonia (the autonomous region leader in the industry, mostly in the county of Barcelona).
- 23.4 percent are in Madrid.
- 14.6 percent are in the Comunidad Valenciana (half in Valencia, half in Alicante).
- 7.3 percent in the Balearic Islands (most of them in Palma de Mallorca).
- 15.7 percent are in Andalusia (Málaga), Basque Country (San Sebastián and Vitoria) and Asturias (Avilés).
Spanish self-storage demographics indicate 70 percent of customers are individuals and 30 percent are businesses requiring temporary or permanent space. Those statistics are similar in the rest of the European countries.
The latest survey statistics indicate the robust growth of the Spanish storage market. The accompanying chart compares the number of sites in the countries leading the European industry, and the years in which those storage markets were launched.
Only six years after the introduction of self-storage to Spain, the market’s growth has surpassed that of most European countries. But recently, two major factors have contributed to a slowdown of the Spanish economy. The decline is being driven by real estate prices, which have reached the highest levels in history. Yet, Spanish spending power has not achieved average European levels.
These factors may hinder overly ambitious business plans. A similar situation occurred in France a few years ago when, after the initial years of high market growth, a slowdown period followed, and many self-storage operators disappeared.
In October 2002, fellow businessman Arnaud Ripert (from France) and I opened Spain’s first self-storage site under the Bluespace brand name. The pioneer facility was in a leased building with 853 units and about 5,000 square meters of space. Our aim was to build the Spanish self-storage market by offering the highest quality of service. The industry was new and had few customers, but awareness of the product increased quickly, and within a few months, units started to rent at a rate of 250 square meters per month.
Only five years after its opening, Bluespace has become the largest storage operator in Spain, with more than 16 percent of the country’s existing stores. The company has 11 facilities offering more than 71,000 square meters of space: Barcelona (6), Madrid (3) and Valencia (2). Four more facilities are under construction.
The growth of Bluespace parallels that of the Spanish industry. After the first facility opened in Hospitalet (Barcelona), we established sites in Badalona and Montcada, and opened other new facilities in rented buildings near Barcelona. We rapidly filled more than 7,500 additional square meters.
In January 2005, we expanded with a rented building in Campanar, Valencia. The year also marked an important change in the company’s growth strategy, as Pramerica Real Estate Investors became a majority shareholder. Since then, Bluespace has continued expanding, but has purchased its own buildings.
In 2006, we acquired stores from Easy Box in Leganes (Madrid) and El Prat de Llobregat (Barcelona), branding them with the Bluespace name. Later in the year, we opened two more sites in Barcelona: one on Rambla Guipúzcoa Street and another on Sant Just Desvern.
This year has been our year of expansion in Madrid, with the opening of two new stores in the Spanish capital, Julián Camarillo (city center) and Alcorcon (South area). The company now boasts about 6,000 units. We’re also building four new stores—one in Barcelona, another in Valencia and two in Madrid—and planning to acquire three new locations in the near future. In addition, we’re expanding our Barcelona sites with additions to the Rambla Guipúzcoa and Sant Just facilities. Once construction is complete and these stores are 100 percent occupied, the total offering of Bluespace will be about 70,000 square meters.
Investing in Growth
The Bluespace strategy is to acquire and develop six to eight new facilities per year, with the objective of having 45 operational stores in Spain within five years. These facilities will be in Barcelona, Madrid and Valencia, cities where Bluespace already operates, because of their higher storage demand and growth potential.
To meet its expansion aims over the next 12 months, Bluespace secured the financial support of Pramerica, which has contributed €70 million share capital. In addition, Hypo Real Estate Bank Internacional AG granted €125 million to finance the acquisition of new facilities in June.
Self-storage is growing more rapidly in Spain than in most European countries. It’s an industry of great economic potential due to increasing social demand and awareness. Spanish self-storage is quickly marching toward acceptance, expansion and prosperity, with Bluespace hand-in-hand.
Entrepreneur Alexander Ruckensteiner is a co-founder, director general, board member and shareholder of Bluespace self-storage. He holds doctorates from the MTI Sloan School in Boston and the University of Austria. His last executive position was as CEO of Kneissel-Raichle, a sporting-goods manufacturer. For more information, visit www.bluespace.es.