Self-storage take-up soars to record high

Self-storage occupancy has reached record levels after the pandemic boosted customer activity, according to new figures from Cushman & Wakefield and Self Storage Association UK. Occupancy on lettable space grew to 82.3% during 2020, up from 76.2% in the previous year. The average net rental rate in the UK rose by 3.7% to £23.94 per sq ft per annum. Operator revenues jumped by 16% year-on-year to £890m. The sector was boosted by the government’s stamp duty holiday, which drove more property transactions and house moves. These reasons accounted for a 39% majority of domestic customers last year. Changes in customer circumstances also contributed to higher levels of activity, with consumers decluttering to work from home or to accommodate students returning from university during lockdowns. There was also a significant uptick in retail business customers using self-storage space during the year, growing by six percentage points annually to account for 23% of commercial customers. This was down to smaller retailers expanding their online presence and requiring space for additional stock. Some businesses also helped health providers, including the NHS, in storing PPE and other equipment. The UK accounted for around 43% of the European self-storage market and has the most storage per person of any country in Europe.  The report estimates there are 1,997 self-storage locations in the UK, operated by 998 brands in total. This amounts to 50.5m sq ft, or 0.74 sq ft per head of population. The average store measures 25,288 sq ft. Philip Macauley, head of self-storage at Cushman & Wakefield, said: “Self-storage is one of the few sectors to have flourished over the past 12 months and in turn we have witnessed a significant increase in demand from investors, in particular from new money.  “The vital role self-storage has played in the last year in supporting changed lifestyles is also attracting additional institutional investors, looking to diversify their portfolios, and private equity eager to take advantage of the buoyant market.  “This high level of demand, coupled with an undersupply of investment opportunities, means we are seeing sharp increases in pricing and a positive impact on yields.”  Rennie Schafer, chief executive of Self Storage Association UK, said: “Once again the industry has shown its resilience to economic and political disruption, increasing occupancy to the highest levels on record. “Throughout the pandemic self-storage has been providing a valuable service to a range of customers, from online retailers to healthcare providers and people making space for working from home or home schooling.” Deal highlights so far this year include the freehold sale of a 58,000 sq ft Rent a Space self storage facility in Shrewsbury to real estate investor Heitman. The transaction completed earlier this month, with JLL acting for the seller. To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Image © Andrew Drysdale/Shutterstock