By Richard Bourne, CEO, Martin’s Properties
Much has been written about the wave of investment into the UK’s self storage sector. According to the Self Storage Association (SSA), the industry has grown to over £1.3bn (£100m up in the last 12 months alone), and a rise of floorspace of just over 7% in the same period.
Yet in the UK, there is only 0.8 sq ft of storage space per person, whilst the more mature self storage market in the US has a figure is 5.8 sq ft per person. Despite this, its nationwide vacancy rate is stable at just 8%. This demonstrates the huge growth potential the UK still has in this sector.
However, it should be noted that the UK self-storage sector is in the middle of a demographic and consumer expectations revolution. The operators and investors who recognise this early, and build or reposition assets accordingly, will capture disproportionate value. Those who continue to treat storage as a commodity product, risk being left with ageing stock that serves a shrinking customer base.
At Martin’s Properties, we saw a very real opportunity to invest and set up a self-storage platform that operates independently, whilst supported by the wider business. The case was compelling: self storage demand was buoyed by structural changes in the residential market such as the rental boom (renters are 2-3 times more likely to require storage than home owners), the trend towards home and hybrid working post-Covid, the decreasing size of UK homes (12% reduction over the last decade) and the rise in divorce (28% up in the last year alone) all being contributing factors.
At the same time, there are new emerging demographics of demand coming from younger and older persons than the traditional age range of 40-70, an increase from females and an acceleration of SME and start-up businesses who see storage as a perfect solution over and above costly industrial space.
The thesis is compelling: four fast-growing, structurally driven demand pools, each with specific and investable requirements, converging on a sector that has historically underinvested in customer experience. The gap between what today’s consumer wants and what most facilities currently provide is not a problem: it’s an opportunity.
Build for the later living resident who needs climate control and ground-floor access. Build for the student who books on their phone at midnight. Build for the SME owner who needs a delivery-ready unit with extended hours. Build for the female customer who should never question whether she feels safe walking to her unit. Do all of that in a sustainable, technology-enabled, well-managed building and you have an asset that will outperform for years to come.
The question for investors is no longer whether self-storage is a credible institutional asset class. It clearly is. The question is whether the assets they back are being built and managed for the customers who are actually showing up, and those who will be showing up next.
We have embedded all of this into Cactus, creating our own IP through careful research, tech testing and design that meets the needs of both more traditional and emerging customers.
With our first site coming online this year, we are convinced that the market is in need of, and more than ready for, unique purpose-built storage facilities that answers the perceived challenges of existing facilities. Cactus Self-Storage will deliver, and we cannot wait to roll this roadmap out across the UK and capture a fast-evolving demographic of customer.