Storage operators ‘benefit from weak property market’
Restrictions hitting the residential and commercial markets due to the economic downturn are helping the self-storage sector, according to a survey by Deloitte Real Estate and the Self Storage Association.
Driven by shrinking office space and smaller city centre apartments, Manchester's residents and business owners are turning to purpose-built rented facilities as their homes and workplaces fail to provide adequate storage space.
Manchester has 528,000 sq ft of self-storage space, enough to fill Manchester Arena four times, and the greatest amount of any UK city outside London. The figure equates to 0.83 sq ft of space available per city region resident. The latest addition in the city region was Flexistore.com, which opened last November near Openshaw.
Gareth Hughes, assistant director at Deloitte Real Estate, said: "The tough economic climate has meant that many people have had to downsize and with the average one bedroom apartment offering just 402 sq ft of space, it isn't surprising that many people have put some of their possessions into secure storage.
"As Grade A office space in the city centre is also at a premium, many businesses have perhaps agreed lets on smaller floor plates than they would have liked, which has meant that they have needed to use external facilities for record keeping and surplus furniture storage, for example."
The average cost of self-storage in the North West is £19.96/sq ft a year. In October 2012, a 20% VAT charge was introduced to the cost of self-storage. Most operators had to absorb this but have slowly begun to recoup the costs from customers. Hughes added: "Self storage operators have shown remarkable entrepreneurial flair in response to the Government's decision to change the treatment of VAT. Credit should be given to the region's operators who have been able to maintain occupancy rates and grow business customers. This growth in customer base is good news for the industry."
Chris Gordon, area manager for the North at self-storage provider Big Yellow, said: "The Manchester self-storage market is strong and occupancy levels are stable. Our North West customer base is evenly split between domestic and business customers. Our commercial customers are extremely diverse, ranging from architecture practices that store paperwork and plans to national carbonated drinks companies that use our facilities as drop-off and collection points for their regional sales reps. Domestic customers are typically those that require storage between house moves or those that have downsized, though we do have some that use our facilities to store extensive collections of items they have procured such as music memorabilia and antique teddy bears."
The survey reports there are approximately 830 self-storage facilities in the UK providing in the region of 30.1m sq ft of storage space. Deloitte Real Estate estimates the total turnover for the UK industry in 2012 was £380m from around 400 different operators, employing over 2,000 full-time equivalent staff. Of all the facilities in the UK, 330 are held by larger operators, or 40%, with small operators accounting for the remainder.
