The Asian self-storage industry has hit a bump in the road following a tragic fire at a facility in Hong Kong. Luigi La Tona, executive director of the Self Storage Association Asia, discusses how the industry has been affected, looming regulations and the association’s role.

January 19, 2017

8 Min Read
The Difficult Road to Self-Storage Success in Asia

By Luigi La Tona

Editor’s Note: The self-storage regulatory situation is Hong Kong is fluid. Though its content is extremely relevant, much has occurred since Luigi La Tona wrote this article for ISS. For updates on the situation, please refer to the Asia Self-Storage topic page.

Relative to the industry growth timeline in the United States, the self-storage concept took a little while to take hold in Asia. The model only started in Japan in the early ’90s, and then slowly trickled to Hong Kong in the late ’90s to Singapore in the early 2000s.

Cities grew into vertical mazes in which a dense living culture became the norm. Storage space was forgone for convenience, with commercial, residential and retail projects built around previously rural areas. Particularly, as in the case of Hong Kong, they were built around industrial areas and buildings that weren’t being used for their intended purpose, namely manufacturing.

With a rising consumer middle class, an affluent state of mind and living, and increased acceptance and awareness of storage space outside one’s home (Google “mosquito apartments Hong Kong”), investors were attracted to the shores of Asia. Aligned with the success of the industry globally, the late 2000s saw the proliferation of self-storage in the continent including China, South Korea, Taiwan, Thailand and, only recently, in Brunei, India, Indonesia, the Middle East, North Africa and West Asia.

The Road to Regulation

While investors caught on, regulators had remained relatively in the dark about the industry. To engage these officials when major issues needed to be addressed as well as to serve and encourage industry growth, the Self Storage Association Asia (SSAA) was created. With a variety of member-specific services, the SSAA created country-specific committees in every active region to discuss fundamental issues faced by members.

A major part of this was the organization of codes of conduct, a set of self-regulating objectives members were encouraged to meet to maintain a high standard of practice. With these in place, the SSAA paved the way for industry growth and success. As mentioned, government and regulators had yet to be fully engaged with the industry, struggling—sometimes reluctantly—to wrap their heads around the business. That was until a tragic fire occurred in late June.

The Fire and the Spotlight

Due to faulty wiring in an air-conditioning unit in a building that housed one of the leading self-storage providers in the country, Hong Kong experienced one of its worst blazes in half a century. The fire at SC Storage in the Ngau Tau Kok area burned for more than 108 hours and caused the death of two firefighters. This tragic accident shook the industry and country to its core.

It also put a spotlight on self-storage and placed government officials in the hot seat to make changes. The first thing they did was try to understand the business. Through various media reports, they came to learn about the SSAA and were quickly in touch with us. We’ve since built a great relationship (more on this later).

In their drive to understand the industry, they uncovered more than 200 facilities that evaded the SSAA’s own record. These were lesser-known properties with minimal amenities, some merely guarded by chicken wire; but they brought the total square footage of storage space in Hong Kong beyond our expectation. With minimal regulations and maximum potential for the next “spark,” this knowledge gave government officials even more to chew on regarding how to regulate this in-demand industry.

Media research, coupled with a non-storage blaze in another industrial building a week after the Hong Kong fire, put an increasing spotlight on the elephant in the room—building mismanagement. Both fires were exacerbated by the fact that the buildings had no sprinklers, which weren’t mandatory in industrial buildings built before 1963. There are more than 400 buildings without sprinkler systems around Hong Kong. While the self-storage industry doesn’t aim to operate out of industrial buildings per se, you take what you can get in a city that’s constantly fighting for more real estate.

The potential for self-storage solutions combined with a growing middle class and increased attention from regulators have put a target squarely on the industry’s back in Asia. They’ve also woken us up to the reality of the way in which the industry is going to grow.

A Step Back

The industry as a whole learned lessons from the tragic Hong Kong accident. It forced us to look inward about what we must do to ensure the safety of our customers and their goods. Ongoing investigations drew further revelations about mismanaged storage sites and, unfortunately, pointed to the less-than-adequate ones that, for all intents and purposes, were set up to be a real estate space fillers for property owners until the next-best industry or highest bidder came around. Storage wasn’t an industry they really cared for, nor necessarily wanted to grow.

Not only did the unwanted attention bring on a dogpile of media scrutiny, customer peace of mind wavered. Business ground to a halt. Operators who had previously spent millions on upbeat advertising fell silent. Investors were left with questions; and government bodies were knocking on our doors demanding answers and proposing Draconian regulations. In the months after the incident, the fire had a trickle-down effect on other governments in the region, which have further investigated the industry in their own backyards. The ground beneath our feet was shaking, and it was going to take major reflection and strategies to put the train back on its tracks. 

Two Steps Forward

Governments, the media and stakeholders all demanded answers, and the SSAA found the opportunity to engage. Associations will continually beat their respective community drum, identifying power in numbers. Our members were quick to harness “the power of one.”

Through the Hong Kong Self Storage Committee, SSAA members formulated immediate strategies and goals about media and government engagement, with the SSAA taking the lead on both. Like never before, the community came together to work on the task at hand, armed with more than 100 years of industry facts, figures and opinions from those who had “been there and done that.”

As you can imagine, the Hong Kong government became active in the industry, providing advice on building and fire safety issues and the penalties that could be faced if self-storage operators fail to comply. Through our Hong Kong Committee, the SSAA has engaged the government directly in meetings and letters. Initially, there was a lot of high-level talk about the heavy changes the industry might face. Since then, however, the magnitude of the proposed changes has lightened.

We’ve worked to help them understand a bit more about the industry and what makes sense for the safety of the Hong Kong people, their goods and the industry itself. Through direct engagement, we’re in the process of getting the model right. It’ll be a model with regulations and standards that will be universally accepted in Hong Kong, something all stakeholders welcome. With regulations set, investors and suppliers will each have their focus—and trust me when I say there are plenty of investors waiting to pounce. Those who love the business continue to love it and smell the opportunity even in the current uncertainty.

However, regulation can’t come unilaterally. On multiple occasions, the SSAA has voiced its support for working hand-in-hand with the government to uncover regulations that will be suitable for all. So far, so good in our collaboration. As a matter of fact, our local government recognizes the SSAA as the leader of the industry. It refers to us not only for its own questions, it directs non-member to us for answers as well.

Beyond Hong Kong, the SSAA has spoken directly with members of each country committee to inform them about the fire and how the Hong Kong Committee is working through it. For example, having experienced smaller incidences in their own countries, the Singapore and Taiwanese governments have jumped into the fray in hopes of learning more about the industry. This has allowed us to engage directly with them. 

The Silver Lining

All the lessons we’ve learned have proven invaluable for the healthy, safe and sustainable growth of the industry. While there are many more steps we can take (and though they may come with heavy feet), it’s nonetheless a direction our members value for the long-term success of their business and an industry they value.

When anything as tragic as the Hong Kong fire happens, there can hardly be a silver lining. Two firefighters lost their lives, many people lost a loved one, and a lot of people lost meaningful possessions. But the silver lining is here and now, in the actions we’re taking to continue this great business.

Since the industrial revolution, industries have worked hard to improve, or they perish. The public, the government, well-meaning peers and the world demand it. Between advocates, regulators, investors and consumers, the opportunity to spurn meaningful dialogue followed by even more meaningful action on where we can take this industry now and for the next 100 years is being captured at this time on this, the difficult road to industry success. 

Luigi La Tona is executive director of the Self Storage Association Asia, which is dedicated to assisting self-storage operators and industry suppliers working in emerging markets along the Pacific Rim. For more information, visit

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