Facing Down Challenges in the Canadian Self-Storage Industry

As the COVID-19 pandemic continues to recede, businesses across Canada are assessing its economic impact. One sector that has seen significant change is self-storage. 

In recent years, the Canadian industry has been on the rise, with more individuals and businesses using storage to meet their needs. In fact, it’s grown at an average annual rate of 3.1% over the past five years, reaching $1.1 billion in revenue in 2021, according to research firm IBISWorld. Much of that growth came in 2020 and 2021, and though the data is difficult to obtain, I can say that we at Montreal Mini-Storage have enjoyed stellar growth over that time frame, with a more than 800% increase in the number of sites. That’s our steepest jump in our 20-year history!

In response to a change in consumer behavior in which many Canadians moved out of large cities into suburban, exurban and rural areas, we entered several markets outside of Greater Montreal. This included a big push into the Laurentian Mountains, where we acquired or built six locations to support the influx of inhabitants and new home-based businesses.

We also opened Clickspace, a hub for e-commerce entrepreneurs, with storage solutions conveniently adjacent to office space and services. This allowed us to capture more rentals from the many people who are now working from home.

Market Shifts and Challenges

Now that we’ve passed the three-year mark of the start of the pandemic, the self-storage market is changing yet again. Demand has moderated and is slowly returning to historical averages, introducing new challenges and opportunities. Some parts of Canada are now oversupplied with storage units, resulting in price pressure and decreased profitability for many operators.

To make matters more difficult, the hike in interest rates and widespread economic concern impacting most industries has caused a shift from construction and expansion to consolidation and cost-cutting measures. The inflationary environment for labor and utilities as well as huge increases in property taxes and insurance premiums have stretched margins and the viability of some self-storage projects, forcing industry professionals to focus on improving our current offerings and organic growth initiatives to stay ahead.

Yet, despite these unprecedented obstacles, we remain optimistic about the future. With more people moving and downsizing, along with government plans to increase immigration, the demand for self-storage space is likely to remain strong in the coming years. However, to stay competitive, we’re focusing on optimizing our operations and reducing overhead. Data analytics has become an integral part of our day-to-day to streamline operations and improve the customer experience. It has allowed us to create tailored solutions to meet our customers' specific needs and deliver them where and when they want them.

Technology has also made its way into our business, with the introduction of new tools like reservation apps, online payments and contactless access to make the customer journey more seamless. We’ve introduced innovation internally, too, to increase our productivity and bottom line.

Most notably, this time of reckoning has catalyzed our green initiatives. We’re proud to be leading the charge by implementing eco-friendly practices across our entire real estate portfolio because these are the values that matter the most to our customers and team.

Self-storage remains an important and growing player in the Canadian economy. While the challenges we face are significant, the opportunities are many. As a facility operator, we remain committed to innovation and adaptation as we continue to exceed customer expectations.

Simon Berman is co-founder and CEO of the Montreal Mini-Storage Group, which operates 23 locations in Quebec, Canada. With nearly 20 years of experience in developing and operating self-storage, he leads the business’ growth as an owner-operator. He also serves as an advisor for charities and community organizations in the Greater Montreal Area. For more information, email [email protected].