- Use of Self Storage Space in the UK Reaches Record Level
- Cushman & Wakefield and the Self Storage Association UK launch 15th annual industry report
- Highest level of occupancy recorded at 82%
- Industry turnover increases 16% annually to £890million as working from home drives people to make space for “home offices” by decluttering
- More than a third of domestic customers used self-storage for reasons associated with moving home
- Use of self-storage by small retailers sees greatest leap as online presence expands during pandemic
Use of self-storage space in the UK has reached a record level with 82% of lettable space occupied, alongside the largest annual increase in occupancy levels since records began in 2004.
Revenues of self-storage operators increased 16% annually to £890million in 2020, as customers stayed longer as a result of lockdowns, reducing churn, and more enquiries moved online with walk-ins reducing.
The self-storage sector has proved itself resilient and adaptive, meaning it is well set for future growth and attracting investment, according to new research into the sector’s major operators and customer trends from Cushman & Wakefield and the Self Storage Association UK (SSA UK).
The 15th annual industry report examines a range of data points and surveys of operators, customers and investors on the performance of the sector, and growth prospects for 2021.
A change in our working environment
Pandemic-driven changes in consumer habits have created opportunities for self-storage during this unprecedented period of upheaval. One of the main drivers of the increase in self storage use is a change in the working environment, with working from home becoming the norm for many more people over the last 12 months. The need to create additional space for an office or dedicated work area often requires the removal of furniture to declutter. Self-storage operators have felt the benefits of customers rearranging their living spaces to accommodate work.
Housing market support shores up residential property moves
Moving house and reasons associated with this, such as decluttering to sell up, make up the largest proportion of domestic customers at 39%. Delving into this further, 29% of domestic customers specifically used self-storage because they were “between properties” during the course of a home move. The residential property market has benefited from Government support over the last 12 months, remaining open for the vast majority of this period, including during successive lockdowns. This in turn has led to a surge in home moves, often requiring use of self-storage facilities, with five of the last six months up to and including March 2021 showing English sales volumes greater than 100,000 each month.
Retailers moving online search for space
There was a significant uptick in retail business customers using self-storage space during 2020, up 6 percentage points annually to 23% of commercial customers, in response to smaller retailers expanding their online presence and requiring space for additional stock. This was the greatest increase of any sector recorded. Retailers also had to make more space to allow for social distancing. Less reliance on just-in-time stock also led to a rise in use of storage space by retailers.
The UK makes up 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 now just shy of 2,000 self storage ‘stores’ in the UK (1,997) operated by 998 brands in total. This amounts to 50.5 million square foot of storage space, or 0.74 square foot per head of population.
Average rental rates had been within a range of less than 50p for the past 5 years but there was an increase of £0.86 in 2020, with rates reaching their highest level on record, just short of £24 per square foot per year.
Philip Macauley, Head of Self Storage at Cushman & Wakefield, said: “Self storage is one of the few sectors to have flourished over the last 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, 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.”
Elsewhere, key findings include:
- Considering customers that use self storage following an important life event, sadly, a death in the family was the most prevalent trigger (39%).
- 50-59 year-olds are most likely to use self storage.
- Divorced or separated people are twice as likely to be self storage users (16%) compared to their representation in wider society (8%). This comes as the ONS records the largest annual rise in divorces in 50 years.1
- However, for the first time, people in marriage or civil partnership have a higher representation amongst self-storage users than in the general population.
Download the full report here