Self Storage 101
Self storage offers month-to-month storage space rental for personal or business use and provides a convenient way for individuals and businesses to store their possessions, whether due to life-changing events, or simply because of a need for extra storage space. Self storage units are typically rented indefinitely, with a minimum term of one month, unless terminated on two weeks’ notice before month-end.
The mix between residential and commercial users at individual self storage properties is typically 70% to 80% residential and 20% to 30% commercial, with the majority of commercial customers being SMEs.
High quality self storage properties are typically well located for convenient access, are well designed from both an aesthetic and functional perspective, provide security (CCTV monitoring, automated access control, on-site security and electric fencing and/or beams), have on-site management and provide for the sale of all ancillary related packaging items.
Self storage properties generally have low obsolescence risk and a high degree of flexibility to cater quickly to changing societal and business needs. Stor-Age’s experience further indicates that an experienced and dedicated management team is essential to competing effectively in the self storage industry.
Demand for Self Storage
The demand for self storage is influenced by socio economic factors and proximity to demand drivers such as residential development, shopping centres and small business users.
Residential users typically require short term storage due to life changing events such as moving house, renovations, birth, marriage and separation or divorce. The growing security-driven living trend, for instance in estates, apartments and retirement villages, compounded by rising urbanisation, increasing consumerism and access to credit, means that residential users also have long term requirements for additional storage.
Commercial customers may require storage as a short term measure as they grow or downscale their business, or longer term for convenient, secure and flexible storage of inventory and archives.
Further growth in the self storage industry in South Africa is expected as a result of the following underlying trends:
- increasing public awareness of self storage as a service
- smaller living spaces and increasing household numbers
- a shift to apartment living (increase of mixed-use developments - “live, work and play”) with a resulting reduction in household storage space
- home renovations
- shifting social preferences among ‘Millennials’ that are deferring marriage and traditional family in favour of maintenance-free lifestyles
- an ageing formerly ‘advantaged’ population residing in smaller homes and/or retirement villages
- South Africa’s emerging black middle class
- increased population mobility and urban density
- increased number of online retailers which require flexible storage space, and
- growth in the number of start-up SMEs requiring flexible and convenient space