Why Set up a Self Storage Business?

Are you interested in setting up a self storage business?

The UK self storage industry is growing in popularity, and according to the recent industry report, self storage awareness has been steadily increasing since 2011. Setting up a self storage business has become increasingly popular with the investor community, and shows no signs of slowing down.

The Covid-19 pandemic undoubtedly changed the way we live, working from home is on the rise, living spaces are getting smaller and work spaces are becoming more flexible; changes like these are fuelling the self storage sector.

We’ve compiled a list of why you should take advantage of this exciting and rapidly growing market and start your self storage journey!

Recession proof & pandemic proof

There are few industries that can claim to be recession-proof and pandemic-proof, but self storage has proven itself as extremely resilient throughout both economic downturns.

Figures published by Inside Self Storage demonstrate that self storage real estate investment trusts (REITs) were the only real estate asset type that produced positive returns during the Great Recession of 2008. As inflation in 2022 continues to soar and the increasing cost of living hits households across the country, some experts are predicting another recession. But, the industry is driven by natural changes in life and these events will continue in some form or another whatever the economic climate.
In 2020, the pandemic altered people’s lives in enormous ways. For many, it was a story of disruption, delay and disaster, but for a few sectors, the impact of Covid-19 has been positive.

The self storage industry was already on the uphill, and the pandemic saw transformational growth, and in 2021 342 new facilities were created all over Europe. In addition to continuous growth, occupancy and rental levels hit record highs.

A profitable & growing industry

Philip Macauley, partner at Cushman & Wakefield, the leading global real estate services firm, believes there will be no slowdown in the market “any time soon” up to 2027 and beyond.

The return on investment and compound annual growth rate for this industry is expected to grow in the next five years, meaning the sector offers high returns.

Fewer problems, low maintenance and overhead costs

Self storage businesses generally involve minimal electricity, insulation, and less vigilant management and maintenance. Typically, as a storage unit owner, you wouldn’t have tenant problems that you’d have as an owner of single-family homes or apartment complexes.

Some facilities do not include heating or air conditioning and are now operating as unmanned. Although, unmanned self storage locations require a greater initial investment in technical infrastructure.

The automated or unmanned trend is growing but the self storage industry has mixed feelings about it and whilst many unmanned self storage facilities provide 24-hour access without any human interaction, it’s not the first choice for everyone.

Self storage is always in demand, with both individuals and organisations needing extra space

Two primary factors influence the business. First, people continue to acquire things that can’t be consumed and, for various reasons they are hesitant to, or can’t, throw these items out.
Second, people are reluctant to finally deal with, and throw or clean out the items they’ve placed in storage. Leaving the stored items to stay where it is.

It is estimated that one-third of storage space is filled with items that have been there for over three years.

Multiple business opportunities

Investing in self storage opens the door to numerous other business models and opportunities. Many of our customers have implemented Kuboid’s external garage units, perfect for unused outdoor space and creating an additional revenue stream.

It has also become increasingly popular for self storage operators to include offices within their services, allowing people to come in and utilise the space.

The business opportunities within the industry are endless!

Stay on top of market and industry trends with Kuboid’s expertise.

See our recent blog delving in to the FEDESSA Industry report and our key findings.