Anthony McHenry is managing director at Storage Professionals, a Johannesburg, South Africa-based property-management firm that oversees the Storage Worx self-storage portfolio. Storageworx was founded in 2009 under the Storage Genie name and today operates 14 locations in the Gauteng province. In this interview, he offers insight to the local storage industry.
What is the self-storage market like in South Africa?
The industry has just started to establish itself here. We have one dedicated real estate investment trust that has 35 sites. Several other listed companies and property-management companies have started to purchase assets in this class to list them on the Johannesburg Stock Exchange.
What challenges does the local industry face?
Our greatest challenges are financing and staffing. Since it is such a young industry, we don’t have professional managers, and the finance houses don’t see the full potential, which is an advantage if your asset portfolio needs to diversify its income a bit.
Storage Worx in Gauteng, South Africa
What’s happening on the development side?
Our industry is still finding the various niches in the market. Mostly, it is understood to be traditional-style storage, but we all know that it will divide into four main categories: multi-level facilities, traditional, convenience (locations in shopping malls and offices) and valet. I also see a division branching into affordable office space for small business and people who operate in different locations from their units.
What’s the lending landscape like?
This aspect is very sad, as the banks will only give 60 percent to 70 percent loans for these businesses. Property investors are looting the industry because they will only pay for the income and expect the asset for free.
Who are your customers and what are they looking for when they seek storage?
They vary from clients who need a storage unit while they transition from one home or job to another short term, businesses that are growing faster than their resources, individuals who just need some extra space, and lifestyle customers who need a place to store items related to their hobbies and sports.
What’s on the horizon?
I am optimistic regarding the future of self-storage, as the market is still growing. As more and more high-density developments go up and multi-use buildings come in and around the cities, the need for self-storage will grow with it.
For more information, visit www.storageworx.co.za.
