History of Self Storage
Modern day Self Storage is believed to have started in the early 60’s in Texas, USA; with rapid growth to the present date, there is now over 58,000 sites across the United States, 3,000 sites across Europe and around 3,500 throughout Australia and New Zealand.
Asia and the Middle East developed Self Storage markets in the first decade of this century. Japan, Hong Kong and Singapore led the way with the rest of Asia now eagerly entering the market. From co-hosting the first Self Storage Asian Expo, Steel Storage continues its commitment to supporting the growth of the Self Storage industry in Asia.
Self Storage is one of the best performing property assets in the world and the growth of the industry is assured. The industry worldwide is worth more than 30 Billion USD.
Why invest in Self Storage?
Self Storage offers investors the opportunity to diversify their investments with relative safety and confidence. The Asian Self Storage sector has proven to be one of the most robust real estate segments over the past 5 years, confirming its attraction and resistance to economic downturns.
Asia’s population is one of the most economically diverse and prosperous in the world. With an ever increasing middle class, the traditional users of Self Storage, and the combined pressures of home and business space, explains why some Asian operators have enjoyed significant growth in facilities and income.
Like all Self Storage regions around the world, there are sites that get the product offering as professional as they can. Self Storage for new customers is about trust, so ensure you use the right Self Storage products.
Self Storage for Asian operators brings unique benefits that deliver a robust financial proposal and illustrate why Self Storage is a good diversification solution:
• Diverse renter base
• Low dependency on single big renters
• Rental rate adjustment frequency
• Strong stabilisation characteristics
• Low overhead costs, maintenance exposure and on going capex needs once a Self Storage facility is built
• Relative resistance to recession
• Low impact due to non paying tenants
• Use properties that are not in high in demand.
Return on investment
In developing Asian markets, Self Storage companies are typically producing double digit annual returns. With its robust stabilisation characteristic, these good returns generally continue over the life of the investment. This is often why many Self Storage owners/investors stay with their investment over the long term despite attractive third-party offers. Using the best quality, hi-tech, low maintenance Self Storage products is an important ingredient in maximising your return on investment.
Getting started in Self Storage
Self Storage is like any other commercial project, you must do market research before starting your Self Storage journey. Don’t assume that because there is no Self Storage business in an area that there is automatically a need. Study research demographics and employ market research companies to discover if there are potential customers in the area.
Self Storage Business Plan
With the in-depth information you’ve gathered on Self Storage with your market research, you can now start writing your business plan. This is essential if you need a bank, an investor or another party to help finance your project. They need to see the potential of your business proposal presented in facts and figures; a business plan does that.
Choose the Right location
When you plan to build or purchase your Self Storage building, it becomes a substantial asset of your Self Storage business that appreciates over time; therefore – just like the real estate industry – location is vital. Even if you rent a property and convert it into Self Storage, location is equally important because most users of Self Storage are interested in easy access.
Getting started in Self Storage
Before you jump into a Self Storage project, it is vital to research your market. Use demographics/market research companies (especially if they know the Self Storage industry) to discover who customers are in the area. What’s the mean income, the daily traffic passing the property you want to develop? Is the area growing, and how fast?