FEDESSA, JLL Release 2018 Research Findings on European Self-Storage Market

The Federation of European Self Storage Associations (FEDESSA) and investment-management firm JLL (Jones Lang LaSalle) have released research findings from a 2018 survey of the European self-storage market. The organizations polled more than 700 facility operators. The results indicate the market continues to grow, though there’s uncertainty about how economic factors may impact future supply, according to a press release.

This year, there are 3,792 facilities comprising 9.7 million square meters of storage in operation on the continent, an increase of more than 500 properties for the second year in a row. On the development front, a group of respondents that collectively operate 1,186 facilities indicated they plan to add a total of 381 locations between them over the next three years. If all those projects come to fruition, it would equate to 32 percent growth, or a compound annual growth rate of 9.73 percent.

“The outlook for the self-storage sector in Europe is positive. With good macro and demographic fundamentals, the next few years should see this entrepreneurial sector continue to evolve. We are seeing innovative operators adopting technology in new ways and developing better buildings,” said Ollie Saunders, lead director of self-storage Europe for JLL. “There are some young portfolios which are growing steadily, and some more established players who are both consolidating and developing new stores. There is plenty of room for both the independents and the big players, with a variety of ways for new capital to invest in the market.”

Despite the growth, the amount of rentable storage space available is just .02 square meters per person, compared to .87 square meters in the United States. Further, more than 82 percent of European facilities are concentrated in six countries, with 40 percent in the United Kingdom. Those figures are down from 85 percent and 44 percent, respectively, from a year ago.

Similarly, the region remains “highly fragmented” in terms of operating companies, with the 10 largest brands comprising 23 percent of all European facilities and 39 percent of total storage space, according to the report. Those figures are essentially identical to last year.

Among the countries outpacing the continental average of storage space per capita are Iceland and the Netherlands. Along with the U.K, these markets each have three times the European average of rentable square feet per person. Still, average rent across the region has risen to €262 per square meter per year, despite average occupancy falling from 81 percent to 78 percent year over year.

“The self-storage industry in Europe continues to perform well, with solid returns along with increasing levels of supply and a strong supply pipeline,” said FEDESSA CEO Rennie Schafer. “However, this increase in supply, combined with the current economic uncertainty, may test certain parts of the market in the coming years.”

The survey also revealed that 76 percent of operators believe they’ll achieve an increase in profit in 2018 vs. 2017, though just 40 percent indicated they expect an increase in rental growth, the release stated.

Founded in 2004, FEDESSA consists of 14 self-storage associations across Europe and represents about 1,400 self-storage facilities.

JLL is an investment-management firm specializing in real estate services for property investors and occupiers. The company has about 300 corporate offices in more than 80 countries and a global workforce of more than 86,000 employees.