There’s a new trend in town, and it’s on the brink of becoming a £1 billion per year business already. As the housing crisis continues to halt homeowners plans to move and upsize, an unprecedented demand for self-storage has been created as we as a nation look to store our excess and sentimental possessions outside of the home.
What does the self-storage trend look like?
Providing a cheaper alternative to renting or buying a bigger home, it seems like self-storage units are springing up here, there, and everywhere alongside new housing developments. In fact, there are at least 280 more stores planned in the next 3 years – a growth increase of over 10%.
So just how much stuff are we storing to warrant such an uptake in self-storage? In 2022 alone it was reported that UK households and businesses piled enough additional items into storage to occupy more than 2m sq ft – that’s about 2 and a half times the size of Buckingham Palace! Revenues amongst key players in storage like Big Yellow and Safestore have seen increases of around 6.5%, but storage is a business stream open to SME’s too.
Travelling to and from a self-storage facility is becoming a new-norm and certainly a preferred alternative to the current state of house prices, with two-thirds of customers keeping their unit for around 2 years. This creates an opportunity to generate a steady revenue stream for businesses who take the leap and invest in self-storage facilities.
How do I get started in self-storage?
Creating a self-storage facility can be a relatively straight-forward way of boosting your business revenue streams. An unused carpark, retail unit or warehouse space can make for ideal conversion projects, bringing the advantages of an existing building with them.
Existing spaces will often have been built close to other amenities, offering a strong footfall and access to transport links. If consumers and businesses are placing their possessions into storage, they are going to be looking for convenience when it comes to accessing these items. According to the Self-Storage Association UK Annual Industry Report 2020, 86% of people who use self-storage travel less than 30 minutes to reach it, so it really is all about location, location, location.
Another option for self-storage conversions is using container units. There are now companies who specialise in converting these units, and the options go far beyond just self-storage! See one of our suppliers https://adaptainer.co.uk/container-conversion/ for more on this.
The other more obvious benefit of converting an existing facility is of course the fact that it is likely to be equipped with utilities and a power supply, offering a cost saving in comparison to starting from scratch.
Do your research and make friends
- Once you think you’ve found a building which is suitable for conversion, give yourself the best shot at success and do your research. If you can, find someone who’s achieved a similar project and take their advice, nobody will be better placed to walk you through the do’s and don’ts than someone who’s already made a success of it.
- Get the experts in – once you’ve got your eye on a building to convert get an architect or surveyor in to walk around the building and check its structural integrity. What are the facilities like, is the heating and lighting all functional? Putting the work in initially will certainly help to stop any shocks further down the line that can impact on your available cash flow.
- Look into the demographic of the surrounding area – are these the sorts of people you can attract with self-storage? The earlier mentioned SSA industry report stated almost 70% of people who use self-storage are aged between 40 and 79 – so a university city may not be your best starting point.
How we can help
If you have a self-storage conversion project planned or you’d like to explore options, Moorgate Finance are happy to help. We can provide all elements on finance to support you wherever you may need it, from commercial mortgages to development loans and asset finance too.
We are proudly partnered with Adaptainer (https://adaptainer.co.uk/container-conversion/) who specialise in selling self-storage containers as well as converting them into other innovative solutions like office units, school classrooms, pop up food stores, tap rooms and more!
Call us on 01908 92 62 62 or hit APPLY NOW to discuss with one of our specialists today.
Sources of statistics and more information: https://www.theguardian.com/business/2023/may/17/housing-crisis-drives-1bn-a-year-boom-in-uk-self-storage
https://www.themeasureofthings.com/results.php?comp=area&unit=f2&amt=2000000&sort=pr&p=1
This blog is for information purposes only and should not be construed as legal or financial advice and not intended to be substituted as legal or financial advice.