The Self Storage Association Asia (SSAA) recently presented its Annual Survey for 2020. The survey was introduced to members by the Executive Director, SSAA, Andrew Work at an online conference on Thursday, 4 February 2021.
In his introduction Andrew said that for experienced operators 2020 was “not a terrible year”, adding that many finished up on 2019 as customers tidied out their homes to make space for home working and schooling; small business stored unwanted equipment during lockdown; and some companies made additional revenue from the storage of PPE. “This was the first time in many years that the claim that self storage is ‘recession proof’ was tested,” he said. “The industry passed with flying colours.”
The report projected strong growth as the world bounces back from the COVID recession with the self storage industry remaining resilient. There remained a healthy mix of business and private customers with a high demand for climate-controlled facilities. Rising accommodation costs, increasing urbanisation and growing e-commerce are among the drivers for growth in the sector. E-commerce is expected to rise to 22% of global retail sales by 2023. Occupancy levels and rental rates were remaining stable. Value added services represented around 7% of revenue in Asia-Pacific and Europe compared with 12% in the UK. Over 50% of respondents to the survey predicted rental growth; a 14 percentage-point decline on the pre-pandemic optimism. Expectations for profitability growth also remained high.
The report highlighted some challenges for the industry, including a lack of awareness about self storage and the high price of real estate. It also commented on the current investment market with interest rates likely to remain low in most markets encouraging some investors to take more risks.
Although there are challenges to the sector, the conclusion was that the potential for attractive returns from self storage mean that it’s likely to see a high level of investment throughout 2021.
The full report is available to SSAA members only.
Photo: Andrew Work