Update 5/16/17 – While the SSAA continues to work with Hong Kong officials on viable solutions for self-storage operators to meet fire and safety demands, commercial real estate services firm CBRE Hong Kong has also offered its opinion on how the two sides could reach a compromise.

Among the most problematic regulations for self-storage operators to meet are the demand for increased corridor space between units and a larger ratio between windows and total floor area, according to an editorial written by Kelvin Leung, senior director of building consultancy services at CBRE Hong Kong, and published today by the “South China Morning Post.” CBRE believes the amount of available storage space will likely shrink by more than the 30 percent operators claim has been lost from tightening regulations due to the high cost of changing configurations and the likelihood of much higher rental rates.

“Our team at CBRE believes that there are viable solutions that can satisfy the operator and government’s requirements,” Leung wrote. “For example, container doors could be converted into sliding doors so that the corridor space will not be compromised while both doors are open. From our understanding, the [FSD] has increased the corridor dimension from 1 meter to 2.4 meters to create more space for firemen to move between containers in case of an emergency. A sliding door ensures that the firemen’s safety is taken into account without infringing on the self-storage space.”

Leung also called on the government to withdraw or alter its stipulation on the ratio between windows and floor area. “The ratio is a regulatory requirement applicable to office and residential buildings for the sake of airflow and hygiene,” he wrote. “CBRE does not believe that this ratio is necessary or suitable for the purposes of a warehouse. Since the foot traffic of warehouses is much lower than that of an office or residential building, we suggest the government reconsider this overarching requirement and judge each storage company on a case-by-case basis.”

In a letter also published today by the “South China Morning Post,” La Tona reiterated the SSAA’s stance to work with government officials to find common ground. “[The SSAA] shares the same concerns as the public; we are especially concerned about the safety of these facilities,” La Tona wrote. “We understand licensing and higher standard regulations are a consideration, and welcome working with the government to formulate proactive strategies.”

Last month, the Buildings Department, FSD and Security Bureau submitted another proposal designed to improve the fire safety in older industrial buildings, according to La Tona. “We welcome the proposals and believe it is important for the government and relevant stakeholders to work collaboratively on this,” he wrote.

At stake, according to La Tona and CBRE, is having enough storage space to meet consumer demand. “Given the city’s very limited space, self-storage plays an increasingly important role in Hong Kong people’s lives,” La Tona said.

The growth of small residences, particularly “nano flats” with usable space of less than 160 square feet, is among the drivers that necessitate adequate self-storage space in the market, according to Lueng. “These new guidelines have created murky waters for self-storage business owners and landlords,” he wrote. “While safety is a priority, CBRE urges the government and operators to find a middle ground so that the market demand is not ignored.”

“We are happy the government is willing to continue discussing and coming to a balanced understanding of all the issues in order to reach a consensus on storage layout requirements,” La Tona wrote. “Safety is the number one priority, and the industry is open and willing to work closely with the regulators to find a way to best adapt to these new and higher-standard rules, within an achievable time frame.”

2/28/17 – The SSAA believes it has found a workable compromise to help self-storage operators meet fire and safety demands being imposed by Hong Kong officials. To meet the government’s distance and maximum-space requirements, the association will propose allowing operators to install fireproof boards to enclose clusters of units, according to a source. The SSAA came up with the solution after hiring a fire engineer from consulting group Arup and a team of surveyors.

“Fire-safety principles were very difficult for the sustainability [of] the industry, so it was important to match safety and sustainability in order to meet all stakeholder needs to find a win-win solution,” La Tona told the source.

If the SSAA’s proposal is approved by the FSD, operators will need their modifications approved on a case-by-case basis.

Though complying with modifications will be expensive, the costs are acceptable and sustainable, according to Kevin Chan, chairman of the Store Friendly Self Storage Group.

RedBox Storage estimated its costs would be up to HK$20 million and take more than a year to complete, according to the source. Oliver Leung Wing-hong, chief operating officer for RedBox, said he was hopeful the government would consider subsidizing the cost.

Government assistance is also supported by the Hong Kong Mini-Storages Association, which has demanded officials consider interest-free loans to self-storage businesses that can’t afford to make the improvements. The association told a source it estimates about 100 operators have gone out of business already and believes more than half of facilities won’t be able to meet requirements.

"[The government] should not go too far and should consider the feasibility of the regulations," said Peter Hung Kai-kei, chairman of the Hong Kong group.

The Hong Kong association represents about 70 percent of the local industry, a source reported. It has also hired fire engineers to seek suitable counterproposals.

1/18/17 – The Self Storage Association Asia (SSAA), whose members represent about two-thirds of the industry’s gross floor area in the region, indicated it’s working with the Hong Kong Buildings and Fire Services Departments (FSD) on crafting safety standards that meet guidelines and are realistic for storage operators. Some of the standards that resulted in hundreds of citations being issued last month are impractical, Luigi La Tona, executive director of the SSAA, said yesterday during a press conference.

“We are proactively working with the government in order to find safe and sustainable solutions,” La Tona said. Among the requirements the association has been working with members to meet include the elimination of aisle dead-ends, improved fire exits, lighting and signage, according to a source.

One of the sticking points is the requirement for a 2.4-meter gap between storage zones, which La Tona said the industry “could absolutely not meet.” The gap requirement would “drastically” and “negatively” impact the industry because of its need for floor space, he said. The SSAA estimates up to 50 self-storage facilities—about one-tenth of the market—could close as a result of the strict safety standards, a source reported.

An alternative to the gap requirement proposed by the FSD during a meeting with the SSAA on Dec. 30 would create sealed, 50-square-meter “storage islands” designed to stop the rapid spread of fire. “Their ultimate goal is to stop the spread of fire for at least 30 minutes,” La Tona told the press. “They have said this outright. They have been willing to accept alternative solutions to meet their goal.”

SSAA has retained a fire engineer from consulting firm Arup to help it propose possible alternative measures designed to keep a fire contained for at least 30 minutes. It plans to submit two proposals each to the Buildings Department and FSD, a source reported. “The FSD has been very clear that they will accept alternative solutions, and the industry wants to stay in communication and in collaboration with the FSD,” La Tona said.

While the FSD is willing to consider alternative proposals, “commercial considerations could not override public safety,” officials told a source. The FSD considers the 2.4-meter zone gap and a one-meter requirement between storage units and the ceiling to be “feasible and necessary.” The SSAA maintains the 2.4-meter requirement falls under general warehouse regulations and was “unheard of” by self-storage operators before last year’s fires, La Tona said.

The SSAA is hopeful it can reach a compromise with the FSD and announce a new set of approved standards by the end of March.

Launched in 2014, SSAA supports members' interests to help grow the self-storage industry in Asia.

1/3/17 – Government officials have cited hundreds of Hong Kong self-storage operators for building, lease and safety violations following investigation of facilities in the wake of two devastating fires that killed two firefighters last summer. As of Dec. 23, the Buildings Department had issued 571 orders to 259 storage businesses demanding they fix safety problems. In many instances, fire escapes were found to be too few or too long, with storage units taking up too much space within facilities, according to Michael Pang Yuk-lung, chief building surveyor.

In addition, the Fire Services Department (FSD) has issued 1,267 fire-hazard abatement notices to 257 self-storage operators, of which only 50 have been satisfied, according to Terence Tsang Wing-hung, acting assistant director of fire safety. Violations of the fire ordinance include inadequate locking devices on escape doors, insufficient coverage of the hose-reel system, insufficient exit and directional signage, and obstructed or too few windows. The FSD indicated it has inspected 756 of 885 identified self-storage facilities, a source reported.

Of 871 self-storage businesses inspected by the Lands Department, 213 were suspected of violating their leases, according to Patrick Leung Yun-hing, principal land executive. The Lands Department has issued 13 improvement notices and 221 written warnings. It has also initiated 13 prosecutions related to occupational-safety violations endangering employees, Thomas Chan, chief occupational safety officer, told a source.

Business owners were given 28 days to bring their facilities into compliance. Further legal action could be taken if regulations aren’t met, Pang Yuk-lung said.

Officials from an unidentified trade association indicated self-storage operators had made strides in promoting safety awareness but felt “powerless” from new FSD requirements and feared the industry could be forced out of business, a source reported.

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