Occupancy rates for UK self-storage facilities grew by 4% in 2015 despite overall supply and rents also increasing – indicating that demand is growing faster than supply, according to new research from Cushman & Wakefield and the Self Storage Association UK (SSA UK).
The survey shows the industry enjoyed a year of healthy growth in 2015 adding around 1.9 million sq ft (176,000 m2) of space, in addition to the 1.3 million sq ft added in 2014. Occupancy levels grew to 73% on current lettable space during the period and average net rental rates increased by 5.5% to £22.15 per square foot per annum – the highest level since the study began in 2006. Net rental rates are highest in London, almost double the net rental rates in East Midlands and the North.
The study estimates that there are now 1,077 self-storage sites in the UK. Total turnover for the industry in 2015 was about £440 mln (€554 mln) for approximately 490 operators employing around 2,250 staff (full time equivalent). With 71% of businesses intending to increase prices during 2016 the outlook for the sector remains strongly positive.
A detailed demand study, undertaken by YouGov, was also commissioned for the report to measure the level of awareness and capture perceptions of the UK self-storage industry.
The demand survey results reveal a growth in awareness, with over 90% of people surveyed having heard of self-storage, up from 85% in 2015. However, understanding of the product remains low with only 30% of respondents understanding that only they would have access to their individual self-storage unit. Overall understanding and awareness of self-storage is higher in the south of England and especially London, where the siting of high-profile stores on busy arterial routes has raised visibility of the product and usage is higher.
Oliver Close, partner in Cushman & Wakefield’s UK valuation and advisory team, said: 'Revenue growth over the last 12 months has been very strong, especially in the context of a low inflationary environment. 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 UK self-storage market, the outlook remains positive.'
Rennie Schafer, CEO of the Self Storage Association UK, added: 'It is a positive sign for the industry that occupancy rates continue to increase, and while the current rate of 73% indicates there is still room for further improvement, returns per square foot also increased by more than 5%, showing businesses are not sacrificing revenue for occupancy.'
This is the tenth consecutive survey carried out by the Self Storage Association UK Annual Survey. Responses were received from 80 separate companies covering 435 self-storage facilities, representing 41% of the UK’s self-storage sites and over 60% of total storage space. Responses to questions in the survey related to company and facility positions at 31 December 2015.