The business of storage units has been increasing in the recent years mostly due to the series of self storage wars initiated by investors. Many institutional investors and large business are jumping into this sector as in the commercial property segment self storage is considered better than other options.
There are numerous other benefits of buying a self storage unit. It provides long term sustainable income at a low price and investors believe the trend of storage units will continue to increase in future in other parts of the world as well because the living space of people in metro cities is reducing and the population of metro cities is increasing.
Currently, the market of cheap self storage is booming and the occupancy rate of storage units is more than 90%. It has bee found that most of these units get full occupancy in most seasons which allows the owners to get a great turnover. The rental rate is increasing at the minimum rate of 5% and Moody predicated that the sector will have strong growth in the year that will continue for minimum three to five years.
Why self storage?
There are many other conditions that show the demand for self storage units will grow in future. The population of cities is increasing and people are seeking comfortable spacious dwelling place that gets congested due to excess household items.
The requirement for space of corporate sector is also increasing that creates conditions for longer occupancy and higher demand. The occupancy rate at self storage units has also increased in these few years supporting growth.
Also the sector is not affected by market volatility because the demand and supply in this sector has a wide gap. The customer base for self storage units is diverse and the storage providers feel as compared to other real estate properties, these small units fare better. After recession buyers are hesitant to invest in property sector and in such conditions small investments in these units is considered safe.
The market of self storage is not only increasing in UK and US but these storage units have been constructed in many other parts of the world such as Middle East and Asia. Dubai is the new hot spot for these units where the total dwelling space is less.
Families and offices require storage space. People are hesitant to buy properties and construction rate reduced in the region after recession. Investors are shying away from home and property investment. In this condition, the investment in storage gives the scope to reduce the total cost of investment and get reliable secure independent units.
Facilities at these units
It can be multi-storeyed building in rural or semi urban area offering storage space or a small garage in a city. Some of the basic amenities offered by these units are lockers, boxes, containers, rooms and outdoor space and a monthly rent is paid for storing items in these rooms. These stores were earlier caller mini storages which were leased by individuals to small business for storing inventory. The tenant owned the lock and key.
In history the concept was popular in ancient China where the self storage like units was offered to tenants. These were publicly owned rooms that had facilities for storing items.
Today the industry is mounting and investors are buying it as commercial properties that can be rented. The competition is fierce and owners are seeking innovative methods to ensure tenant keep items at rooms for longer duration. The lifestyle changes in metro cities raise its demand and make it a great option for investors.