Growth and Trends in Self Storage History

Posted on 19 October 2023 | 5 minute read

Growth and Trends in Self Storage History

Are you running out of space in your home? Or maybe you’re a savvy investor looking for the next big opportunity. The self storage industry is blowing up in Australia as real estate trends fuel a cultural transformation in living arrangements and commercial rents experience explosive growth.

The demand for storage units is showing no signs of slowing down. With more people working remotely and the rise of e-commerce, the need for extra space has never been greater. Keep reading to learn more about the state of the self storage industry, where it’s headed, and how you can benefit from innovative solutions within this dynamic, ever-changing industry.

Self Storage – A Brief Overview

After its humble beginnings as a small collection of units with garage roller doors erected behind the Kennards Hire building during the 1970s, the Australian self-storage scene is now one of real estate’s hottest topics.
self-storage facility
It’s transformed from a basic operation offering little more than three besser-brick walls and a roller door with a padlock into a sophisticated solution with all the modern conveniences, including climate control, insurance coverage, high-tech security, and mobile storage containers that come to you.

As with most businesses, once consumers get a taste, their needs evolve, and the storage industry wastes no time keeping up with their growing list of demands.

The demand for self-storage has created a thriving multi-billion-dollar industry with billions of square feet up for rent to store all types of belongings, from grandma’s old antique wardrobe to pool tables and office equipment.

Innovation is at the forefront as companies increase market share by giving customers options, such as mobile self storage, on-demand pickup and return services, and contactless rental (a feature that experienced rapid growth during the Covid-19 pandemic).

The sector has become a hot spot for commercial real estate investors wanting to escape tenant churn, massive overheads, and unpredictable financial costs typical of today’s commercial property market.

In short, the self-storage industry is riding high on a wave of technological advancements, changing consumer behaviour, and revenue growth. It will continue to shine as an adaptable, robust, and lucrative sector within the commercial real estate industry. And all forecasts point towards its growth and relevance remaining strong in the future, too.

The industry remains poised to meet future challenges, setting new benchmarks for success and reinforcing its importance in Australian life.

Market Size and Growth of the Self Storage Industry

While the fluctuating global economy has a significant and sometimes devastating effect on many other industries, the self-storage sectors continue to display remarkable resilience. Increased rents forcing consumers to downsize into smaller properties, rising commercial rents, and a trend towards smaller yards and higher-density living continue to fuel demand for personal storage that’s affordable and accessible.

Many self storage operators are reporting high occupancy rates, and investors are flocking to a sector offering security with reliable rents and capital growth potential.

The industry is not without its challenges. The pandemic’s impact is still felt in supply chain issues and construction costs. There are also legislative changes, like mandatory customer goods insurance, ventilation control, and fire safety.

However, despite the challenges, the market continues to grow. According to the Self Storage Association of Australasia, the industry continues to show it’s resilience. An industry analysis from 2020 serves to paint an optimistic future about the sustainability of the self storage market in Australia, including:

  • An occupancy rate of 88% by area
  • $1.5b annual turnover
  • A supply rate of 2.11 sq ft per capita
  • 1,570 storage facilities in Australia

Capital rate compression refers to rising market prices relative to the income an investment can generate. The phenomenon often occurs during rising market prices and indicates how optimistic and confident investors are about a market’s future. From 2020 to 2021, cap rates for self storage increased from 75 to 100 basis points, indicating that high-quality portfolios generate substantial premiums.
self storage history

The Future of the Self Storage Industry

The demand for self-storage in Australia is expected to be driven by several key factors. The growing trend of urbanization and population expansion in major cities suggests that there will be continued demand for storage solutions.

The growing prominence of e-commerce and the increasing demand for last-mile delivery and fulfillment centres will present self-storage operators with opportunities that meet the unique requirements of online consumers. The ongoing downsizing trend and changing housing preferences may lead to more individuals and families seeking temporary or long term storage solutions.

Thriving in a constantly evolving industry means self-storage providers must stay ahead of the curve by meeting the ever-changing needs of consumers and embracing cutting-edge storage solutions.

If you’re looking for innovative and affordable self storage solutions in Melbourne, visit 1800 We Store It. They are the industry leaders in providing cutting-edge storage options that cater to all your needs. Reach out to them now and discover a world of innovative storage solutions.