Report | Intelligent Investment

European Self Storage Industry Report 2024

October 9, 2024 8 Minute Read

European Self Storage Industry Report 2024 2

Looking for a PDF of this content?

Download

The 13th annual survey conducted by the Federation of European Self Storage (FEDESSA) continues its co-production with CBRE for a third year, assessing the European self storage market. Like many industries, the past year has brought its share of challenges. Financial pressures have resulted in a decline in customer enquiries, coupled with rising operational and development costs, impacting profitability.

Despite these challenges, demand for self storage remains strong. Capital deployment has continued to grow year-on-year since 2020, with a diverse range of investor groups seeking opportunities in the self storage sector. Operators are optimistic that conditions will improve as inflation eases and the major European elections are completed. There remains a strong pipeline for new stores, particularly in the Northwestern European countries.

Industry Overview

Europe’s self storage market has 9,575 stores in operation, totalling 16.5 million sq m in gross area. The leading four markets (UK, France, Germany, and Spain) account for 68% of Europe’s total number of stores.  

Relative to 2023, 2024 (YTD) has seen a strong uptick in self storage deal making, supported by an improving global macroeconomic environment, a strengthening narrative on ECB rate unwinding, and a continued re-allocation of capital into operational real estate sectors. As a result, we have continued to see improved liquidity across debt markets and a widened buyer pool looking to re-deploy into equity strategies in the self storage sector.

Industry awareness and understanding



The industry would benefit from increased public awareness and understanding of self storage. Taking the average of responses from all public surveys, 37% of the public have not heard of self storage, and a further 35% have heard of self storage but said they know nothing about the sector, nor the services offered. Awareness varies across countries, UK has the highest awareness, whereas France has the lowest. 

There is a lack of understanding of key aspects of self storage such as private access to units, flexible contracts and how secure units are, which could be preventing use. A lack of understanding and awareness among the general public shows that there is potential growth for demand.

Operator metrics



Demand metrics remain strong as operators continue to benefit from the sector’s structural demand drivers. Whilst there are country variations, operators report healthy occupancy and rental rates. As economic conditions have tightened, it appears that some operators have lowered their prices in an attempt to increase occupancy. Others have maintained or increased prices, potentially sacrificing some occupancy for higher rental returns.

Store features



There has been increased investment in existing stores in response to technological changes and sustainability improvements. Traditionally, there has been little capital improvement required on a self storage store. However, with new technology such as electronic locks, advanced monitored security systems, and access control, some operators are modernising their stores. Simple PIN access systems are being replaced with two-factor authentication through mobile devices to provide more security for customer goods. Artificial Intelligence (AI) is being adopted across many industries, and self storage is no exception. Approximately 69% of survey respondents stated they are planning to use AI in their business in 2024. It is likely that the share of operators using AI will increase as the ability to access and analyse large quantities of data will become invaluable, and increasingly change the way operators interact with consumers.

Future expectations and challenges



Economic challenges such as recession and inflation are the main concerns for operators in the coming 12 months. The impact inflation will have on customers’ disposable income, residential property moves, and other factors that bring customers to self storage, are more of a concern to operators than the cost of developing new sites. Still, businesses remain optimistic about increasing profits in the coming year, with 72% expecting an increase, and 92% no decrease in the next 12 months. A lower cost of finance is set to impact profit margins positively, considering the majority of self storage businesses are freehold and under some form of financing.

Contacts

Item 0 Item 1 Item 2 Item 3 Item 4

Related Services