The Growth of the Self-Storage Industry in Australia
Caption: People in Australia are seeing self storage as a cost-effective and convenient solution to storing their belongings and valuables.
Forty years ago, self storage was an alien concept in Australia, but since its introduction into the country in the 1970s, the industry has continued to develop and, from the early 1990s onwards, has continued to grow rapidly. The market is made up of smaller and larger operators, and the growth of the sector has seen a diverse range of options, including mobile self-storage options and climate-controlled self-storage facilities.
However, investment in the industry in Australia has remained more of a challenge than that in the US, where modern self storage (as it is known) was pioneered. In the US, despite a lag in new constructions of storage facilities due to land purchase costs and financing, many existing facilities in busy areas are still benefiting from higher occupancy rates and, in many cases, longer leases.
What’s the reason behind the self-storage industry’s continued growth?
The sector has remained stable due to a diverse customer base, which is something that operators can attest to based on their performance. Through their self-storage facilities in different locations, they see all demographics of society, from families who move interstate or internationally for work, young students, retirees who are downsizing, renovators and business owners who are looking for a makeshift warehouse to store their goods.
This diverse mix of tenants means that the sector doesn’t depend on just one type of user to survive, and the flexibility of long and short-term leases means that whatever the situation is, people in all kinds of circumstances often find themselves needing a place to keep items that they’re not willing to part with, but for whatever reason, can’t take them with them.
What are the social factors that have facilitated the popularity of self storage in Australia?
First is the continued increase in housing density in capital cities, which means smaller floor plans in apartments and homes, as wells as lesser space for extra furniture and items. Another factor is the growth of baby boomer population who have accumulated more than their parents over their lifetime. Moreover, the renting population who are more mobile and likely to move more frequently, including interstate and overseas, is also increasing in number.
Other social factors, which include divorce, children staying at home longer and increases in people who downsize, mean that a solution of extra space is often needed.
While the challenges for the self-storage industry include the increasing number of competitors and the limited construction of new facilities, operators that have secured good locations in key areas are enjoying high tenant occupancy.
With these factors and options, like mobile self-storage where operators can deliver lock-up onsite storage to homeowners and businesses, it’s easy to see why the affordability and convenience of extra storage has continued to be taken up by people who need extra space.