Self Storage in Australia
The Self Storage industry began in Australia in the early 80’s, with a few sites mostly adjoined to existing businesses. It was not until the late 80’s that the industry began to come into its own, with an increase in the number of centres built specifically for Self Storage. The Self Storage Association was created in 1990.
Now there are in excess of 1000 Self Storage facilities in Australia and New Zealand, ranging in size from small 10 unit sites in regional areas, through to multi storey 1000+ unit centres in the major cities. The industry also offers a range of specialised storage solutions, such as climate controlled storage, for wine and other sensitive products, document storage and vehicle storage to name a few.
Self Storage in Australasia continues to be used primarily by domestic clients, looking to store personal items that they do not have room for at home, or need to access away from home. There is an increasing demand from commercial clients, looking at using self storage as a business tool, with around ¼ of clients in 2004 being of commercial nature.
In the USA, where self storage originated over 30 years ago, there is almost 0.3 square meters of storage space per capita, in comparison Australia has around 0.11 square meters per capita. However the Australasian industry continues to show strong growth, while the US industry is showing more signs of maturity and a stabilising of growth.
Entering the industry
While the Self Storage industry is relatively new and growing at a rapid rate, it is far from a fool-proof investment. The Self Storage Association of Australasia strongly encourages all potential investors, whether passive or active, to thoroughly research their investment in the industry before committing funds into the industry.
The self storage industry is generally a very localised market, with the majority of customers travelling less than 5 or 10 kilometres to a centre. This means when researching the industry you must look at the local market, even comparing North Sydney with South Sydney can prove dangerous as they have different market conditions. The pricing, unit mix, customer mix and overheads will all vary from business to business, and locality to locality so be sure that you research the market in the area relevant to your investment.
Developing or buying a self storage business
If you are looking at becoming an active investor in the self storage industry, then you should consider membership of the Self Storage Association of Australasia, even if you have not yet selected your site. This will give you access to industry statistics and data that will help you better understand the industry, while it may not provide the very local data you need, it will help inform you on the broader industry, and the factors that effect the market. This can then be applied to your particular area of interest and ensure you “ask the right questions”.
Provisional membership is specifically designed for people who do not yet have a facility, but are interested in getting involved in the industry. It gives you access to all the manual of advice and procedures, legal agreements and industry information. To download a membership application form click here or on the link on the left of the page.
There are also a number of consultants that specialise in the self storage industry. These businesses can provide very localised advice for you perform feasibility studies and valuations of properties. They know and understand the industry and are completely independent. Their details can be found in the trade directory under consultants and valuers.
As a passive investor in the self storage industry, you need to understand what drives the industry and will provide the greatest return on your investment. The SSAA has developed a passive investors paper which can be downloaded from the link on the left. This explains some of the current options for investing in the industry, and provides advice on evaluating the merits of certain investment opportunities.
Remember things like, the location of the site and the management of the site will significantly affect the profitability of a self storage business. The industry is also on a growth curve and becoming more competitive, make sure you are considering this when forecasting growth.
The Association strongly encourages all potential investors in the Self Storage industry to seek independent advice on their investment, preferably from someone who has experience in the industry
For more information on entering the Australasian self storage industry contact us NOW!