We have just launched the fourth Deloitte Real Estate survey of the self storage industry which we publish in conjunction with the UK Self Storage Association. It is a fascinating industry - one that really brings together the fundamentals of real estate and business.
Those who are already in the industry seem quietly confident about the next few years. Occupancy is continuing to lift and there is a general optimism that rents will rise. They have both remained remarkably resilient during the recession - and despite rents having had a 20% hike following George Osborne's introduction of VAT to the sector in 2012. It looks like the survey next year will show rents on the move up.
Self storage is all about being able to buy property at a realistic 'wholesale' price and then being able to carve it up and sell it to the public at retail rents. But the dynamics of the business are so influenced by basic land economics – barriers to entry remain high, land supply remains constrained and demand is rising. This year we incorporated a YouGov survey – what surprised me is that two thirds of people in the UK don't know what self storage is and only 3% of the population has used it in the last 12 months.
Although the UK industry is the biggest in Europe by total floorspace, it is only fourth largest in Europe when we look at the amount of space per capita, and is way behind the US and Australia.
Watch this space – it looks like a good one to be in!
Self Storage Association UK Annual Survey 2014
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