A once in a century global pandemic is obviously going to have an enormous impact on how we live our lives, and these changes in consumer habits have created opportunities for self-storage during this unprecedented period of upheaval. One of the main drivers of the increase in self-storage use is a change in the working environment, with working from home becoming the norm for many more people over the last 12-15 months. The need to create additional space for an office or dedicated work area often requires the removal of furniture to declutter and self-storage operators have benefitted from thousands of employees rearranging their living spaces to incorporate an additional working environment.
As a result of this, the use of self-storage space in the UK has reached record levels, with 82% of lettable space currently occupied, and with 2020 seeing the largest annual increase in occupancy levels since records began in 2004.
Revenues of self-storage operators in the UK increased by 16% in 2020 to £890m, as customers stayed longer as a result of lockdowns, reducing churn, and more enquiries moved online with walk-ins reducing. Also, according to new research into the sector’s major operators and customer trends from Cushman & Wakefield (C&W) and the Self-Storage Association UK (SSA UK), the self-storage sector is well set for future growth by attracting further investment.
The 15th annual industry report by C&W examines a range of data points and surveys of operators, customers and investors on the performance of the sector, and growth prospects for 2021.
Housing market support shores up residential property moves
Moving house and reasons associated with this, such as decluttering in order to sell a home, make up the largest proportion of domestic self-storage customers at 39%. Delving into this further, 29% of domestic customers specifically used self-storage because they were “between properties” during the course of a home move. The residential property market has benefited from Government support over the last 12 months, remaining open for the vast majority of this period, including during successive lockdowns. This in turn has led to a surge in home moves, often requiring use of self-storage facilities, with five of the last six months up to and including March 2021 showing English sales volumes greater than 100,000 properties each month.
However, demand for self-storage facilities was not only coming from home movers. The massive disruption taking place within the retail sector has also resulted in a significant uptick in retail business customers using self-storage space during 2020, up 6 percentage points annually to 23% of commercial customers, in response to smaller retailers expanding their online presence and requiring space for additional stock. Retailers also had to make more space to allow for social distancing and demand from retailers was actually the greatest increase of any sector recorded within the self-storage market last year.