- Report shows record level of average occupancy, increasing to 83%
- Industry turnover increases by 4.5% – rising to £930 million from £890 million in 2021 – the highest on record
- No drop in use of self storage – even as the pandemic recedes
- The UK makes up around 43% of the European self storage market and has the most storage space per person of any country in Europe
London, 19th May 2022 – Use of self storage space in the UK has hit a new annual record level, with a national average of 83% of lettable space now occupied, according to new research from Cushman & Wakefield and the Self Storage Association UK (SSA UK).
The Covid-19 pandemic resulted in a surge of people moving or renovating their homes which in 2020 drove the biggest rise in occupancy rates of self storage since records began in 2004. Despite more relaxed restrictions in 2021, this wave of demand has been sustained and occupancy rates have continued to grow.
Revenues of self storage operators increased 4.5% in 2021 to £930million, and the UK average net rental rate rose to £26.13 per square foot per annum, up 9% on the previous figure of just under £24, which was itself a record.
The UK makes up around 43% of the total European self storage market and has the most storage per person of any country in Europe. The report estimates there are now 2,050 self storage stores in the UK, an increase from just under 2,000 (1,997) in the last survey. This amounts to 52 million square feet of storage space.
The 16th annual industry report delves into consumer trends and operator insights, examining a range of data points with surveys of 66 operators who own almost 500 stores in the UK (equivalent to 40% of the market by square footage), 1,400+ current customers. Alongside this, the firms commissioned a survey of 2,000+ members of the public in January 2022.
Pandemic lifestyle changes here to stay
The research reveals how pandemic-driven lifestyle changes such as installing a home office, adding an extension, or moving home consolidated in 2021, becoming long-term trends.
In 2021, 42% of respondents to the public survey were involved in some sort of home renovation or move, even more than in 2020 where 39% of respondents were in the same position. This is partly a reflection of the extension of the Stamp Duty holiday, which terminated on 30th June 2021.
While the proportion of respondents installing a home office fell from 8% to 6%, those renovating a kitchen, bathroom, or another part of the home all increased [see Figure 1 below].
Figure 1 – Changes in lifestyle encouraging self-storage take up
Additionally, growing households and their subsequent need for more space continued to play a key role in fueling demands for self storage in 2021. As part of the public opinion survey commissioned in January this year, 5% of respondents said they’d added to their household, whether that be having a newborn child, welcoming an older child back home, or welcoming an elderly relative, the same level seen in 2020.
Likewise, Figure 3 below looks at the drivers behind why people have taken out storage space, showing an increase in children returning home, up from 2% in 2021 to 3% on 2022. Meanwhile, common reasons stated under ‘other’ were COVID-related or other medical reasons, such as parents moving in with other family members or the death of a friend [see Figure 3 below].
This implies that living with family is a priority for many consumers, while also reflecting the impact of the pandemic on young people and their ability to move out of their family home, with record house price growth.
Figure 3 – The lifechanging events that drove customers to self storageRennie Schafer, Chief Executive, Self Storage Association UK, said: “The Covid-19 pandemic has led many consumers to revaluate the purpose of their home and the importance of family, and it is fascinating to see how that is reflected in the self storage market. Home renovations and multigenerational living have become permanent priorities and not just a short-term response to lockdown measures. We are seeing new customers take up self storage space and existing customers extending the length of their contracts to support these important life transitions.”
Churn rate significantly dropsSelf storage is becoming a long-term solution to many customers, with the churn rate decreasing from 118% pre-pandemic to just 76% in 2021. The churn rate has been decreasing since 2015, but the pandemic has accelerated this trend.
Churn can be measured by the number of move-outs per year and many industry commentators thought this might increase again in 2021, with some lockdown restrictions removed. However, the level of customers staying longer suggests that those who took up space as a short-term solution during the pandemic have seen the value in having the additional space and are extending leases. [see Figure 2 below].
Figure 2: Churn rate in self-storage space between 2015-21
The number of retailers using self storage reduced to 19% of commercial customers from 23% last year as the need to make space for social distancing decreased.
Retailers reduce use of self storage as pandemic measures recede
Self storage acts as ‘incubators’ for small businessesSelf storage stores themselves do not employ many people, with even the largest stores having on average only three full-time staff. However, self storage stores are strong supporters of local small businesses. Many are viewed as business incubators, assisting local businesses make the transition from family, home-based operations, to larger-scale operators which in turn employ more staff. Self Storage allows them to keep stock in space with flexible and scalable leasing options.
The report also finds that 84% of businesses current utilising self-storage employ less than 10 members of staff, again indicating the uptake amongst small businesses and start-ups.
Philip Macauley, Head of Self Storage at Cushman & Wakefield, said: “Despite the easing of certain lockdown restrictions across 2021, self storage has surpassed expectations and continued to flourish. The sector plays a vital role for both consumers and small businesses, particularly now as they navigate the ‘new normal’.
“Occupancy rates have reached new highs, as has average rental rates, and there are more self storage stores than ever, all of which bodes well for the future outlook.”
Elsewhere, key findings include:
- Looking at customers who use self storage following an important life event, sadly, a death in the family was the most prevalent trigger at 33%, up from 30% last year.
- 50-59 year-olds are most likely to use self storage, 43% of users are aged 50-65.
- Divorced or separated people are more likely to be self storage users (15%) compared to their representation in wider society.