As home to 90 percent of global self-storage inventory, the United States by far is the largest self-storage market worldwide. In Europe, however, the United Kingdom takes the crown.
With 2,231 facilities, England, Scotland, Wales, and Northern Ireland comprise nearly 40 percent of the European self storage market (France is number two, but with a considerably smaller percentage). In the UK, two million square feet of storage space was added just last year, expanding self-storage’s footprint in the country to more than 55 million square feet. This year alone, the UK self-storage industry is expected to set another record, amassing more than £1 billion (approximately $1.25 billion) in turnover as demand for space surpasses that of neighboring European countries.
Both occupancy and rent levels are above average in the UK, with the latter rising four percent in 2022, despite high inflation and the tightening of household spending. According to a report by Cushman & Wakefield, self-storage leaders like Big Yellow and Safestore increased their revenues by 6.5 percent last year, equaling £990 million pounds (or around $1.2 billion).
The report also states that an estimated two percent of the UK’s adult population uses self storage, although domestic users take smaller spaces than commercial users; they typically rent less than 500 square feet, with about 70 percent renting less than 100 square feet. The number of adult self storage tenants has been increasing steadily, however, and is now up 1.3 percent from just five years ago.
Lack of Space Leads to UK Self Storage Surge
Philip Macauley, head of self storage at Cushman & Wakefield–UK, says that the density of population in the UK is very high due to lack of space. “Flat sizes have been getting smaller and smaller for years,” notes Macauley.
While self storage customers are traditionally older, and willing to travel an average of 20 minutes to reach their unit, the trend toward self storage is increasing among the younger generations in denser areas. Macaulay attributes a lot of residential rentals to this newer demographic. “There’s not a lot of space for storage for bikes and skis and all that,” MaCauley says. To that end, self storage companies have been diversifying their offerings, developing smaller operations in high density areas like London, Leeds, and Manchester.
As in the United States, the self-storage boom has led to a lot of private equity investors, such as Nuveen, Legal & General and Heitman, embracing the asset class. Many are adding self storage to their portfolios to offset the poorer performance of many office spaces. “Self storage is now on their bucket lists whereas five years ago that wouldn’t have been the case,” said Macauley.
Self Storage Slow Down on the Horizon in the UK?
House moves were cited by more than a third of consumers surveyed as a reason for renting a storage unit, however increasing mortgage costs may have an impact on rentals. In addition, approximately 20 percent of businesses surveyed reported that increased borrowing costs and inflation have led them to reduce their investment in new sites. This has led some industry insiders to anticipate a slowdown in self storage growth in the future. Rennie Schafer, chief executive of the UK’s self-storage association, isn’t one of them. He expects the industry to remain resilient.
“Life events like births, couples moving in together, house moves, separations and deaths will all keep occurring regardless of the economic backdrop,” he said.