Global real estate advisor Cushman & Wakefield (C&W) and the Self Storage Association of the United Kingdom (SSA-UK) have released results from the association’s 10th annual survey of storage operators, providing industry data on average rents, occupancy, facility types and other information. A demand study was also commissioned from YouGov to measure the level of consumer awareness and perceptions of the U.K. self-storage industry, according to a C&W press release.
Survey responses were received from 80 companies operating 435 self-storage facilities. The sample represents 41 percent of the U.K. market and more than 60 percent of total storage space, the release stated.
In general, occupancy rates rose 4 percent last year alongside growing supply and increased rents, indicating demand is growing faster than market supply, according to the source. About 1.9 million square feet of storage space was added last year and 3.2 million since 2014. Average occupancy grew to 73 percent during the study period, while net rental rates increased 5.5 percent per square foot—the highest level since the survey began in 2006.
“It is a positive sign for the industry that occupancy rates continue to increase; and while the current rate of 73 percent indicates there is still room for further improvement, returns per square foot also increased by more than 5 percent, showing businesses are not sacrificing revenue for occupancy,” Rennie Schafer, CEO of SSA-UK, said in a statement.
Total industry revenue in 2015 was estimated at £440 million between approximately 490 self-storage operators. There are now 1,077 storage facilities in the U.K., according to the study.
“Revenue growth over the last 12 months has been very strong, especially in the context of a low inflationary environment,” said Oliver Close, a partner in C&W’s U.K. valuation and advisory group. “While sentiment from operators and investors is not quite as positive for 2016 as it was last year, with demand outstripping supply, improving consumer awareness, and continuing expansion of the U.K. self-storage market, the outlook remains positive.”
The demand-survey results indicate more than 90 percent of consumers have heard of self-storage; however, just 30 percent of respondents understood that only tenants have access to their individual storage unit. Understanding and awareness of self-storage is highest in South England, particularly London, which has the highest density of facilities and commands the highest rates.
The 52-page survey report is available as a free PDF download from the C&W website.
Founded in 1917, Cushman & Wakefield offers a complete range of services for all property types including consulting and appraisal, corporate services, debt and equity financing, investment banking, leasing, and sales and acquisitions. Its Self Storage Practice Group is dedicated to the self-storage asset class. The group offers consulting, data services, feasibility, investment advisory and valuation in major markets.
The SSA-UK is the trade association for the self-storage industry in the United Kingdom. Its mission is to support member operators and vendors, promote best business practices, and raise public awareness.
Sources:
- Cushman & Wakefield: Demand Outstrips Supply for UK Self-Storage Market
