The self-storage industry has become a trend in recent years. However, this trend is booming not only among individuals and businesses looking for alternative storage space but also among investors. The self-storage industry has already proven to be largely crisis-resistant worldwide during the global economic crisis starting in 2007 (financial crisis 2008). With the Corona crisis, the industry faced the next and new challenge. Many self-storage companies, such as MyBox, storemore, Space Plus and STOREROOM, are responding to changes in demand and user behaviour with digitization measures. It is likely that well-organized self-storage companies will survive the post-pandemic period and further crises without major damage.
What makes the self-storage industry crisis resistant?
There are several factors for the self-storage industry’s crisis resilience. Today, self-storage facilities are benefiting from the ever-increasing demand for storage space. The sector’s demand drivers include moving, decluttering, disasters, changing life circumstances and business purposes. These factors typically keep occupancy high and drive rental rates steadily higher. As a result, apartments are getting smaller and smaller, but the demand for more space is growing.
“In total, 4300 self-storages with almost ten million square meters of space can be found in Europe, with the United Kingdom having the most (over 1500). Norway has the highest density. There are over 44 storage facilities for every million inhabitants.” -Brenda Strohmaier, WELT
Self-storage: requirements of tenants, companies and investors
Customer requirements for self-storage companies is just as interesting for private renters and companies as it is for investors. The basic requirement of tenants mainly refers to flexibility, scalability and security.
For investors and self-storage providers, the deposit period is the cornerstone of the requirements. When it comes to pricing, the main focus is on long-term customer loyalty. Factors that influence the costs for tenants in addition to the lease term are location of the storage facility, size and height of the rooms, and digitization measures. Another advantage for investors is the low maintenance of self-storage. Compared to other real estate investments, self-storage involves less maintenance. Due to modern technologies, such as software programs, with which the daily operation of the property can be controlled from anywhere. With the help of smart lockers, special monitoring systems and the option to sign documents online, it is possible to manage the facility without being on site yourself. This also reduces the need for a full-time property manager.
“Self-storage has proven to be recession-resistant and is projected to have a CAGR of 134.79% between 2020 and 2025.”- Forbes
Sensorberg’s Technology and Future Prospects
While for tenants, flexibility, security and scalability are the most important requirements for self-storage, for investors and operators, lease term is one of the most important requirements. However, the intersection between the two is pricing. Sensorberg’s technologies can guarantee security and felxibility. The digital access control systems offer the flexibility of 24/7 opening hours and the assurance that unauthorized persons cannot access the storage facilities. The offline capability guarantees additional security. Sensorberg’s technologies reduce the need for a full-time property manager, saving additional time and money, making the property more attractive and successful for tenants, owners and investors.