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Summary of the UK Self Storage Survey – And what it means for UK storage companies
What is The Self Storage Survey?
The self storage annual report is produced by Deloitte and the SSA on the UK Self Storage Industry. If you work in this industry it is advised that you take the time to go over it, as it has valuable information on how things are shaping up and the changes that are taking place.
For the past eight years the report has included information such as VAT changes, notable takeovers and expansions and a survey on the general public’s attitude to self-storage. Let’s go over some of the main findings.
Rental Rates and Revenue
Perhaps the most important part of any business is the profitability, the self-storage sector being no exception. The staple of seeing how a particular industry is growing is comparing its increase in income to the rate of inflation. The Storage Industry fared very well in this respect, with a huge 65 percent of companies reporting the change in asking rates to be higher than inflation, meaning that they are earning more than they were last year. An extremely low 3 percent of companies reported lowering their asking rates from last year, making the self-storage sector one that is likely to remain strong in years to come.
It is also interesting to note that across all of Europe, England has over 41% of the total storage space, which is quite surprising if you consider that England only accounts for less than 7% of Europe’s population. As such, this makes England’s self-storage industry the biggest in Europe.
Storage Industry Expansion
Surprisingly, there was little expansion in this last year, with most companies opting to maintain their holdings and not expand. There was of course expansion, with 8 percent of companies opening a new facility, down a staggering 9 percent from the previous year, with very few companies opening any more new facilities than one. One explanation for this happening is that there is not that much more demand for self-storage facilities in the UK, as there are already a lot available for those who need them. However, this could change if more people start moving houses, but for the time being there is not a lot of expansion happening in this sector.
Public Survey Results
A public survey is undertaken each year which provides key insights into what people are currently thinking about the storage sector. It is a huge survey, with over 2100 people taking part in it and can yield some interesting findings. They were asked if they had heard of self-storage, and if so what their level of knowledge of the industry was. Only 7% said they knew the services that were offered very well, whilst 31% said they knew a reasonable amount, 39% said they had heard of self-storage but had no clue as to the services that were offered, and a whopping 23% had never even heard of self-storage.
The report also breaks down the percentage of people that have heard of the industry, and know a reasonable amount about it in specific areas of the country. The north has the lowest percentage of people that know about the industry, and the percentage increases the further down the country you go, which is not surprising if you consider house prices.
You should not compromise on your visibility, and should make sure that people can see you from the main roads. – James Gibson of Big Yellow
The survey also asked people how many storage companies they could think of in their local area, and only 39% of people could think of at least one or more, which is quite surprising considering that these companies usually occupy spaces on main roads. James Gibson of Big Yellow says “You should not compromise on your visibility, and should make sure that people can see you from the main roads.” This is further reinforced by the finding that 66% of people said that they had been made aware of the presence of a self-storage facility by it being visible from the road.
What can we surmise from this survey? There are obviously many people in this country that could benefit from using the services offered in this industry, but they are not well informed of these services. As such, if the industry came together as a whole to run a nationwide campaign to better educate people on the services available, then there would likely be a huge increase in the demand for services across the country.
The Effects of the UK Economy
The economy has affected the self-storage industry just as it has affected every other industry in the country, however, there are several key elements of the economy which impact on this industry the most.
The report details how the UK economy has reached new heights of performance, and how businesses are looking to invest now that the economy has recovered. Why does this affect the self-storage industry? It affects it because with a recovering economy comes a recovering housing market, one that has been very slow for years now.
There is now over one hundred thousand properties being sold each month. This is important because perhaps one of the main users of self-storage has always been home movers, who cannot afford or do not have time to transfer all of their possessions to their new home straight away. This means that there will be many more customers for the self-storage industry to cater for, which should in turn help to boost profits over the next few years.
Mike Wilson of Smart Storage backs up this analysis, saying that since January of 2014 “There has been a huge increase in enquiries, which will drive profits up later in the year“.
In conclusion, it is a very good time for traditional storage companies operating in the UK, as consumer spending and the economy has reached new highs which should continue to make the self-storage industry more profitable. However, as highlighted by the survey, there is still a lot the industry can do to promote awareness and help generate new customers.