CAPITAL WATCH ISSUE 1 2018

F or the past four years we at C&W have worked with the UK Self Storage Association to understand industry trends, which includes analysing the results of an annual customer survey plus a demand survey of the general public. Testament to the strength of operators within the industry, 92% of customers state that they are satisfied with the service that they receive, and almost a third had kept their unit for over three years. The latter point underscores the fact that this is no longer an industry just for satisfying short term requirements associated for instance with a move or life changing event (such as dealing with a birth, death, divorce or similar), but part of longer-term space management strategies on behalf of customers. A quarter of customers visit their unit at least once a week, again evidencing the active nature of their engagement with the space, rather than a one-off store / unstore transaction. In spite of the clear savings that the sector can offer to those occupying space in central London, uptake remains limited (only 1% currently use self-storage). Divorcees and those over 50 are disproportionately represented, as they tend to have the combined factors of having accumulated possessions and downsized their accommodation. However, a significant barrier to use is not actually the use case, but more so awareness of the industry at all. Only 46% of the public have a good awareness of self-storage and 60% could not name any existing operators. As awareness builds, there is considerable opportunity to expand the existing customer base (currently growing at 8.8% pa) and maintain upward pressure on rents. A further active consideration for investors in self storage premises in London is that values can often be underwritten on alternative uses. Typically occupying space in the transition zone of large cities such as London, there are a ready supply of last mile logistics operators, trade counter operators, and potential windfall residential uses that come into play over the life of an investment. You can download a full copy of our report here: www.cushmanwakefield.co.uk/en/sectors/self-storage Occupancy on current lettable space is Divorced or separated people are more than of customers use self storage as temporary storage while moving house of the European self storage market to use self storage than other people The UK average net rental rate increased to per square foot per annum of the public have good awareness of self storage up 3% from last year 76.1% £23.08 x2 as likely The UK has 48% 22.5% Only 46% CUSHMAN & WAKEFIELD 18 ALTERNATIVES