By Hayden Harrison
Changes in the U.K.'s housing market have been an advantage for Safestore Holdings PLC, a U.K. self-storage operator. As more people rent dwellings and refurbish their homes instead of moving, more are using storage facilities.
In 2011, Safestore's occupancy grew by 268,000 square feet. This increase put the company at its record occupancy of 3.21 million square feet, approximately half of which is residential customers. However, they’re staying an average two weeks less than at the year end in October 2010.
"The big change which has taken place in the housing market has led to a particularly buoyant rental sector, particularly in London," said Peter Gowers, Safestore’s CEO. "This benefits self-storage because rental occupiers tend to move every 18 months to two years, compared with owner-occupiers who move every seven years. Also, people are moving to smaller flats due to higher rental prices."
Last year, personal inquiries for rental grew 17 percent, making up 91 percent of all inquiries. This increase is due to more people renting and refurbishing. According to a Safestore moving trends survey, 73 percent of homeowners are considering renovating or extending their property instead of moving.
In addition to personal usage increasing, the use of self-storage by businesses has increased as well. Small and medium businesses use storage to store stock, while large businesses tend to use it for logistics.
The company's revenue increased by 6.6 percent from £89.2 million ($116.7 million) to £95.1 million ($124.3 million). After tax, Safestore's profit was £13 million ($17 million). The average self-storage rental rate raised 2.2 percent to £26.11 ($34.1) per square foot. In addition to profit increase, Safestore opened two new stores in Paris and two replacement stores in the United Kingdom.
Safestore operates about 118 self-storage facilities, 23 of which are in Paris. With nearly 41,000 customers, the company employs approximately 500 people. Excluding the 12 Space Maker facilities under its management, Safestore boasts 5.2 million rentable square feet of storage, including 10 expansion pipeline stores.