Last week we attended the first-ever UK Self Storage Association Conference held at the Birmingham NEC. This year, we were proud at Kuboid to have the opportunity to be the Platinum Sponsor, including being the main sponsor for the unforgettable evening Awards Dinner. The two-day conference dedicated to the self storage industry in the UK launched The Self Storage Association UK 2023 Annual Industry Report, produced in conjunction with Cushman & Wakefield – a renowned partner in the field. The report provides a comprehensive overview of the self storage industry by investigating investor appetite, growth performance, public awareness, and the impact of the current cost of living crisis on the sector, analysing a range of data points from operator, customer, and public surveys. The report indicated that the UK self storage industry will exceed £1 billion annual turnover in 2023.
We were lucky enough to catch the launch of the report and after another year of disruptions and uncertainty, we were all eager to find out the recent overview of the self storage sector.
Britons have packed away enough possessions to fill Buckingham Palace more than 60 times over
According to the report findings, the annual turnover in the UK self storage industry is set to exceed £1 billion for the first time in 2023 as the cost-of-living crisis fails to dampen customers’ appetite for the easy-access rented space.
Self storage operators – which include well-known brands such as Big Yellow and Safestore – reported a combined £990m of revenue and increased profitability in 2022 as the sector’s growth continued unabated despite the pressures on household budgets. The report also shows that revenues were up by 6.5% year-on-year as customers continue to find value in self-storage as a way to create extra room at home or when moving, or as a cost-effective way of holding stock for businesses.
“The self storage industry is constantly adapting to the way we live, and an increasing proportion of people, whether by choice or necessity, are staying in rented accommodation for longer. On-site self storage can be a valuable amenity for residents in large developments, especially if they don’t have cars. The beauty from the perspective of Build-To-Rent developers, operators and investors is that self storage also brings into active use dormant basement space below purpose-built residential blocks which is unsuitable for accommodation.”
– Philip Macauley, Head of Self Storage at Cushman & Wakefield
What is driving the demand for self storage?
“Life events like births, couples moving in together, house moves, separations and deaths will all keep occurring regardless of the economic backdrop.”
– Rennie Schafer Chief Executive of the UK’s Self Storage Association
The housing crisis, enduring consumerism and a sentimental reluctance to let go of inanimate objects means self storage is now on the brink of becoming a £1bn-a-year business. Self storage units are proving cheaper than renting or buying a bigger home and are springing up alongside new housing developments across the UK, with at least 280 more stores planned between now and 2026 – a more than 10% increase.
Demand is also driven by people acquiring possessions in the hope that they will soon be able to upsize their homes, but are being hindered by the housing market.
Self storage has become the sector of choice for private equity investors diversifying their portfolios
Investors such as Legal & General and Heitman have bought portfolios of UK self storage assets in the last year. More recently, Nuveen Real Estate, one of the largest investment managers in the world, announced that it has acquired a high-quality self storage portfolio in the UK, from Easistore, on behalf of its European Value Add strategy.
Overall, the self storage industry remains buoyant, and operators’ revenues increased 6.5% to £990 million in 2022 as the sector’s growth continued, despite the pressures on household budgets. One of the industry’s biggest strengths is the variety of reasons customers use self storage.
Report Highlights:
- Self storage is increasingly profitable. Big Yellow, which has 108 stores and is the UK’s largest operator by floorspace, recorded a 30% increase in adjusted profits before tax in 2022, reaching £96.8m. Revenues at the next largest operator, Safestore, rose 14% in the same year to £213m.
- In 2022, a single self-storage depot in Camden, London, was sold to Shurgard for £6m, and four properties in Banbury, Wednesbury, Frome and Amesbury were acquired by Storage King for £59m.
- Occupancy rates remain stable at 3%.
- Over 2 million sq ft of additional space has been occupied compared to last year.
- The residential market contributes the largest number of customers, totalling 36%.
- More people say they have used self-storage more because of the cost of living crisis than used it less, according to a Cushman & Wakefield survey.
- The most likely age of a customer is between 55 and 64, and the most common income bracket is £21,000 to £31,000 a year, with demand falling among people with higher incomes.
- Half of customers are single, widowed, separated or divorced.
- 65% of domestic customers have occupied their unit for about two years, and 43% for a year or less. Another 16% have had their unit for more than five years.
Sources:
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