Self Storage
Investment

Investing in self storage can be a lucrative and relatively low-risk option for those looking to diversify their investment portfolio.

Why invest in self storage?

The self storage industry has become very popular across the UK & Europe, proving to be a resilient and robust investment for many businesses and entrepreneurs. Whether it’s a new business venture or the expansion of an existing facility, there is a wide range of benefits that make this industry a particularly attractive choice for many individuals.

1

Self storage facilities typically have a high occupancy rate, which translates into a steady income stream for investors.

2

Low maintenance costs compared to other types of real estate investments. There are no tenants to deal with, and the upkeep of the units are minimal.

3

Self storage facilities have proven to be resilient during volatile conditions. In fact, results have shown the demand for self storage often increases during economic downturns.

4

Self storage facilities cater to a wide variety of customers, including individuals, small businesses, and even larger corporations. This diversifies your customer base and reduces your reliance on a single customer source.

5

Self storage rental rates can be flexed easily in line with changing market conditions. This ensures you’re always achieve the maximum yield from your facility.

6

As with any real estate investment, self storage facilities have the potential to appreciate in value over time. This can provide long-term capital gains for investors.

7

In the UK, the average payback period for a self storage facility is around 3-5 years.

8

According to industry reports, the average ARR for self storage facilities in the United States is around 8-12%, while in Europe it is around 5-7%.

9

Self storage facilities can be relatively stable, predictable, and easy to manage, making them an attractive investment option for Investment Funds and Private Equity firms who look to generate long-term income with a moderate level of risk.

10

Investing in self storage can be an overall wealth building strategy and can also create generational wealth. It is estimated that in the UK alone, there will be around 6,000 new stores with a combined turnover of around £1.3 billion by 2025.

Why do people use self storage?

The self storage industry is fuelled by consumer demand. Primary sources being individuals and small businesses.

Lack of space

Moving house

Downsizing

Seasonal possessions

Business storage

Travelling

Decluttering

Vehicle storage

“It has put my family in really good stead for the next few generations.”

– Arden Self Storage

“We’re on target to recoup the money we invested in the business within two years.”

– Container Self Storage

UK Self Storage

The UK self storage industry surpassed the billion mark with an annual turnover of £1.08bn

2021 82.3%
2022 83.3%
2023 81.8%

Occupancy rates for current lettable space reached a record high of 83.3% in 2022, but there has been a slight decrease in 2023. However, we have seen a modest increase in the average rental return.

An increase in the churn rate to 98% from 81% the previous year

Average rental rate (ARR)
has increased by 1%
in the last 12 months to £26.23

per square foot (record high)

8.1%

increase in storage space in the year

44%

of operators are planning more investment in new sites

of businesses are now actively using AI, indicating a significant shift towards digitalisation

Source: Self storage annual report 2024, Cushman and Wakefield

“Investing in self storage has helped us capture the market.”

– Roy Jack’s Removals

“Because of the demand, we’re planning another big project next year.”

– Easistore Self Storage

The self storage market today

Consistently, the self storage sector has proven its resilience. The economic fallout from the pandemic has spurred a new demand from business owners taking their operations online and utilising self storage to reduce costs and increase flexibility. Demand has also risen from employees needing to clear space at home to create home offices as a result of new remote working practices.

The UK market has grown at an average rate of 10% per year and is now worth over £1 billion, and the number of facilities across Europe have increased by 70% in the last 5 years. In the US, there are estimated to be around 54,000 facilities. This represents more than all the McDonalds, Subway and Starbucks operations combined. Experts believe that the industry remains strong and will continue to grow in the coming years.

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