The Federation of European Self Storage Associations (FEDESSA) and global real estate advisor, CBRE, released a new report this week at the annual FEDESSA Conference and Trade Show in Stockholm. The report indicates continued strong demand for self storage across Europe, presenting a lucrative opportunity for investors and developers.
Europe’s booming self storage market
According to the report, Europe’s self storage market currently spans 16.5 million sq m in gross area, a 67% increase since 2019. The research shows continuing positive sentiment for the industry with strong levels of revenue and a robust development pipeline. Despite a small drop in occupancy rates across the continent, rental returns increased by 2% on average to €296.53 per sq m. Portugal, Spain, the Netherlands, Germany and Belgium all recorded increases of over 5% indicating a high demand for self storage in these regions.
Investor appetite remains strong
Investor appetite in the self storage market is strong, with year-on-year increases in capital deployed since 2020 and a wide range of investor types seeking to capitalise on the opportunities available. Noteworthy sales this year have shown that high-quality portfolios continue to command attractive prices. The influx of equity and debt has led to a larger development pipeline compared to last year, with 262 projects recorded as being in the planning or construction stages. Northwestern European countries, in particular, are seeing a strong pipeline for new stores. Additionally, small micro-stores are expanding from Austria and Germany, bringing self storage closer to where consumers live.
An untapped market
Across Europe, there remains a largely untapped market of consumers who are unaware of the potential benefits of self storage. In most regions, fewer than one-third of people understand the concept, which presents a significant growth opportunity. By leveraging public marketing and online campaigns, the industry can reach consumers who currently aren’t considering self storage.
Technological advancements
Research by FEDESSA and CBRE highlights increased investment in existing facilities as operators respond to technological advancements and sustainability demands. Many are upgrading with new technology like electronic locks, advanced monitored security systems, and enhanced access controls to gain a competitive edge. Simple PIN access systems are being replaced by mobile-based two-factor authentication, enhancing security. Additionally, changes like LED lighting and solar power installation are helping lower energy costs and improving ESG credentials for businesses.
“The self storage industry continues to perform well with strong levels of revenue against a backdrop of long-term market growth, on both the demand and supply sides. Investors are recognising the lucrative opportunities available, and with a robust development pipeline we can expect to see an influx of new stores across the continent.” – Oliver Close, Senior Director, Self-Storage, Operational Real Estate, CBRE
Read the full report.
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