According to Steel Storage UK the average rentable square footage of storage space per person in the UK is 0.48 compared to 7.41 in the US*. Factors affecting these figures could be:
- the pure lack of available land to develop storage facilities on in the first place,
- the actual cost of the land to purchase and develop, and
- the legal requirements involved to approve such development.
Not to mention the general perception and mind-set of the average British citizen toward self storage itself. It is not ingrained in our way of life as it is in the US.
Jon Perrins from Steel Storage UK says “When I look at the future of self-storage, I see a bright future with lots of growth".
Jon also says "I’ve been working in this business since 1990 and have seen each market we operate in grow exponentially since the self-storage concept was first introduced.
At that time the USA market was at 3.0ft2 (0.28m2) per head of population and Australia at 0.3ft2 (0.028m2). I thought the USA was saturated back then and that Australia would grow to around 0.8ft2 (0.074m2).
But John thinks that is all academic now, because the USA reached 7.4ft2 (0.69m2) per head of population in 2011 and Australia 1.2ft2 (0.11m2). And both markets are still growing.
John also thinks the rest of the world is still way behind these two markets, but it’s climbing. he also thinks there is certainly a lot of opportunity for this business in other parts of the world.
Where to now?
“We see the opportunity for strong growth in Asia and Europe", Jon continues. “Europe has begun to develop with huge potential and success from current owners as well as entrepreneurs. New investment groups and start-ups are entering the self-storage business in Asia – with Singapore, Japan and Hong Kong gaining ground. Asia has a unique model that allows profit-based occupancy from day one, because most buildings are designed for multiple users allowing self-storage to blossom.”**
A background for growth
After a period of generally disappointing economic growth during 2011 and 2012, the UK economy demonstrated clear signs of recovery during 2013, which is generally expected to continue into 2014 and 2015. We are seeing a number of commentaries point towards growth across a broad sector of industries as well and regions.
The UK housing market in particular has leapt back into life, with prices across most regions accelerating. Although a few concerns have been raised, particularly in relation to the cost of money against a background of supply, a lot of attention is being given to providing a stimulus to housing development in all sectors. In turn this has increased the supply part of the equation and thus dampened a potentially overheated market.
The UK culture for storage
To try and put this into perspective it is in part worthwhile mentioning that the US Self Storage Association*** reported that at least 1 in 10 households rents a storage unit. Conversely in the UK, only 38% of those surveyed**** had a good awareness of the self storage concept, whilst as little as 3% had used self storage in the previous 12 months of the survey.
The UK self storage market can be said to mirror that what is happening in the overall UK economy. A not suspirisng fact given that 60% (by area) of all space occupied is linked to the housing market, whilst the remaining space (40% by area) is used by business customers seeking a cost effective flexible storage solution.
What the SSA says
The UK Self Storage Association currently estimates that the UK industry is made up of 975 self storage facilities, with only 141 of those being purely container (shipping container) operators. These only accounting for a meager 7% of the UK supply.
This with the majority of UK self storage space being multi storey warehouse units which, to some degree limits their choice. A US customer benefits from also being offered a high proportion of self storage space in the traditional form of “Drive-up” units, particularly outside the more built up areas.
And what we say
Against a background of increasing awareness of the benefits of the self storage product, we believe that an ever discerning customer will seek out those facilities that provide the best in value, service and offer in areas of oversupply.
As an independent container storage operator, we not only see a great future for self storage in general, but particularly for the container operator who is able to provide a different product to the market place. The challenge for all of us is changing people’s awareness of self storage, whether you’re a multi storage facility operator or an independent container operator.
Our article on the real facts of shipping containers is one way we are working towards bringing about this awareness. Read more here >>
With thanks to Jon Perrins from Steel Storage UK for providing pictures.
You might also like our blog exploring and comparing the cost of buying a house with a spare room (or not).
* Source: http://steelstorage.co.uk/self-storage-market-statistics
** See more at: http://steelstorage.co.uk/future-of-self-storage#sthash.0pcYQFnn.dpuf
*** Reference: http://www.selfstorage.org/