By Lucia Darnell
Latin America is a part of a world primed for self-storage development. The area includes South and Central America, the Caribbean, and Mexico, all of which have seen an improved economy, cultural changes and an influx of foreign visitors in the last decade. Self-storage is still a relatively new concept in region, and all of these factors are shaping industry development.
The improvement in the economic conditions throughout Latin America has made development a very worthwhile investment for self-storage companies and financiers. One reason is more of the populace is now considered “middle class.” They have some extra money left over after bills, taxes and other necessities are paid. A larger middle class means more small businesses are able to start up and thrive. Both of these groups are great target markets for storage!
An increase in middle-class citizens has also had an impact on living conditions. In the past, extended family members resided together under one roof, for financial reasons and because of tradition. Young, single people could not afford to move out on their own, and it was expected for them to live at home with their parents.
Nowadays, with better financial circumstances, many young adults are moving out of the family home and into newly built high-rise apartments. These affordable residences, however, are extremely small and lack storage space, creating a need for off-site storage rental. Urban areas are even building planned communities that have apartment complexes, retail outlets and storage facilities all within close proximity to each another.
More expendable income among the middle class allows small-business owners to flourish. Many have found they’ve outgrown the available storage in their home or small workspace. Instead of moving into a larger house or paying for an expensive office, it’s often more economical to rent off-site space to store their supplies and goods. Storage facilities are now catering to this niche by leasing workspace specifically designed for entrepreneurs. Small-business owners have access to their own climate-controlled “office” with fax machines, copiers and Wi-Fi. And, of course, they’re in close proximity to their storage space!
A change in cultural and religious views has played a large part in the increased need for self-storage development in Latin America. In these primarily Catholic nations, single people traditionally lived with their parents until marriage not only because of financial constraints but for religious reasons. Cultural views are changing, and many singles are moving out of the family home into their own apartment. From there, some move in with their partner before marriage, making temporary storage useful until further plans can be made.
Divorce is more commonplace as well, now that it has become more socially and culturally accepted throughout Latin America. (Chile was the last country in the region to legalize divorce, in 2004.) Temporary storage is again rented in this situation.
Groups from all over the world are visiting Latin America for myriad professional and personal reasons. Foreign companies need to rent secure storage to house their equipment. Foreign travelers need temporarily storage for their belongings.
The 2016 Summer Olympic Games will be in Brazil. Scores of global companies are currently involved in the preparation for these games, with the anticipation of thousands of international athletes and their families arriving in a few short years.
The newly elected Catholic Pope Francis hails from Argentina. His first official trip as pontiff was to Brazil, with more trips to the area expected in the future. This has made South America a land to which many devout Catholics wish to pilgrimage.
Machu Picchu is in Peru. Built by the Incas circa 1450, it is a bucket-list destination for history buffs and archeologists alike. The Panama Canal is also in Central America. It’s an important maritime passage with worldwide business interests.
Beautiful beaches are found throughout the Caribbean. Honeymoons, business trips and second homes are popular in this area.
Mexico has its close proximity to the United States and leads the way in Latin America for its number of self-storage facilities, with approximately 200 of them. Compare that to the 55,000 storage facilities in the U.S.
The scarcity of storage space available for rent, the increase in potential renters, and the lack of competition are all catalysts for self-storage growth in Latin America. Imagine what we can expect for this industry in the next 20 years!
Lucia Darnell is the assistant vice president and Spanish business director for PhoneSmart, an off-site sales force that provides self-storage operators with call-center services and employee-training programs. She was previously a secretary for the Latin American Self Storage Association as well as a liaison for Latin American operators. She's also an expert in operations and offers training in Spanish to self-storage owners and managers. To reach her, e-mail [email protected] For more information about PhoneSmart; visit www.phone-smart.info.