Self-Storage Sector Projected for Record Year with Revenue Set to Hit £1Bn

Self-Storage Sector Projected for Record Year with Revenue Set to Hit £1Bn

The UK self-storage sector is a two-decade success story. Drive up and down M1, traversing every major junction or even to the edge of townscapes, and you’ll likely set eyes on one or more distinctly coloured self-storage units.

Residential and commercial self-storage are on the rise. Fueled by the volatile housing market, our commitment to consumerism, and our reluctance to let go of sentimental or somewhat useful belongings, self-storage has thrived despite the perilous economic circumstances many other businesses have found themselves navigating in the last few years.

In 2022 alone, UK households deposited enough household items in self-storage facilities to occupy 185,000 square metres. That’s more than double the floor space of Buckingham Palace (at just 77,000 square metres).

In fact, according to Cushman & Wakefield’s Self-Storage Annual Report 2023, industry annual turnover has already hit £990 million in 2023, and it will hit £1 billion this year.

Why is self-storage on the rise?

There are several key reasons why 2023 has seen an increase in self-storage, but in the end, it all boils down to uncertain economic times and an evolution in what people value and the decisions they make.

Below are just a handful of reasons that explain the rise in self-storage.

Lack of available space

People in the UK have less living space than some other nations. The UK is a small island. There’s no vast open space, and there’s a shortage of available land to develop. Homes are generally smaller. Space, in general, comes at a premium.

When what we own outweighs what we can readily store, self-storage becomes a necessity. This is increased when downsizing or, indeed, any change in living circumstances occurs.

Moving Out

Whatever the reason for moving out—breakdown of a relationship, relocation across the country or even abroad, perhaps starting a new life in a cityscape, the country, or the seaside—taking every single item you own in one go may be a challenge.

It could be easier to store your belongings in a safe and secure environment like self-storage. At least until you figure out what your next move is.

Decluttering

Then there’s consumerism. Goods take up space. Marie Kondo and her minimalism, ‘sparking joy,” or only buying or keeping what we love ethos might be popular, but on the whole, most of us have a lot of stuff. This means most of us need a lot of storage space at home or on our commercial premises.

Business Inventory

Many business owners recognise that optimising their available space is paramount to productivity. You don’t want people falling over one another to complete tasks, right?

A local self-storage unit provides businesses with much-needed square footage, optimising supply chains. And while we’re on that point…

Supply Chain

Today’s consumers want goods delivered to them quickly. They’re not prepared to place an order online and then sit around for days, twiddling their thumbs, waiting for their purchase to arrive. Next-day delivery is often expected. Same-day delivery is even better.

This is only possible with a robust supply chain. Businesses need simple, and most importantly, swift, access to their storage facilities. Small businesses can maintain a robust supply chain and, by extension, strong customer relationships by operating a local, reliable self-storage unit.

A routine part of everyday domestic life

For many, shuttling to and from a self-storage unit has become routine and a part of life. Sure, people might not be driving up and down the highway every day to visit their self-storage unit but visiting a few times a month isn’t uncommon.

After having eschewed brick-and-mortar commercial premises in favour of the remote digital setup the pandemic demanded, many have relied on self-storage premises to hoard belongings that were once an integral part of their business setup.

People who took the opportunity to downsize, perhaps taking advantage of relaxed stamp duty rates to sell their home and buy a smaller property in the pandemic, used self-storage to safely store those belongings that simply wouldn’t fit in their home.

In fact, according to the Cushman & Wakefield report, self-storage occupancy rates remain stable at 83.3% across the UK, which means that there are an awful lot of people relying on self-storage to store what they cannot.

The housing crisis

Let’s face it, buying a home is expensive. And because buying is expensive, so too is renting. Square footage is also shrinking, particularly in town and city centres. The demand for units is high. And when demand is high, business is good.

People living in flats and small houses may run out of space to store their belongings. They might even have bought products in anticipation of moving to a larger home, only to be thwarted by increased property prices, mortgage costs, and even the cost of moving.

In 2021–2022, 43% of 25–34-year-olds will be privately renting accommodations. More and more people than ever before are renting. But rental costs and a severe shortage of accommodation are forcing young people to move back into their family homes or live with their in-laws. This is the so-called ‘Boomerang Generation.’

But how does this affect self-storage? Simple. People who have previously rented a flat and then been forced to move back in with their parents will likely have their own belongings they need to store. The boomerang generation relies on self-storage.

The online retail boom

You’d have to have been living under a rock to not notice that there has been a huge jump in online retail sales during and after the pandemic. For better or for worse, COVID-19 fundamentally changed how we shop.

Self-storage continues to benefit from the online retail boom in several ways. Let’s look at one example. Imagine for a moment that you’ve felt the pinch of inflation. You start an online shop to earn some extra money. Now you need some storage space. There’s not enough space in your home. You can’t ask friends or relatives. What do you do? Rent a self-storage unit.

This is just one, admittedly not too obvious, example of how the online retail boom has been supported by self-storage providers.

Let’s not forget that existing retailers who dispatch products to customers have leveraged self-storage providers when their own available storage space has shrunk. Why do this? Well, it’s an easy, straightforward, and reasonably affordable way of maximising storage space.

Put it this way: what makes more sense, signing an expensive lease or buying another warehouse to deal with a spike in consumer product demand, or signing a rolling contract with a self-storage facility to store excess seasonal stock?

We knew which option we’d choose.

The range of reasons for renting a self-storage unit

It’s not just retailers in search of some affordable additional square footage and people who have had a change in living circumstances occupying self-storage units. People are using self-storage units for a range of non-traditional reasons.

Renters have included a family happy to pay a monthly cost so that their son could learn the drums without their eardrums bursting; even people renting the smallest home they could and using a self-storage unit as an annexe for their possessions.

Whether every single self-storage provider would be happy to accommodate a budding musician remains to be seen. Although what shouldn’t be discounted is that people are thinking outside of the self-storage box,

Some self-storage facilities have onsite hairdressers, tattooists, and even dog beauticians! Remember, if there wasn’t a market for services like these, there’s no way any self-storage facility would even contemplate incorporating them.

And remember, these are just a few of the reasons for renting a self-storage unit.

The UK needs self-storage

If there’s one key takeaway from the booming self-storage sector, it’s this: the UK needs it. When you sit down and really consider the benefits and opportunities self-storage affords, it’s really a no-brainer.

Still wavering and not convinced that self-storage is a solution to countless circumstances? Let us ask you a question: have you got a better solution?

Expect the self-storage sector to hit £1 billion in 2023 and soar even higher in the years to come.

Resources:

https://www.cushmanwakefield.com/en/united-kingdom/insights/uk-self-storage-annual-report

https://www.gov.uk/government/statistics/english-housing-survey-2021-to-2022-headline-report/english-housing-survey-2021-to-2022-headline-report#:~:text=1.17%20In%202021%2D22%2C%2041,from%2037%25%20to%2043%25).