Self Storage in Dubai

By David on August 3rd, 2010 | 1 Comment

The United Arab Emirates are home to virtually all the self storage facilities in the Middle East, with the majority of them being located in Dubai. Six different companies have emerged there in the last decade who offer self storage space to consumers.

This includes a familiar brand for UK self storage customers. Big Yellow Self Storage have opened two overseas franchise stores in the Middle-East, one in Dubai and the other in Bahrain, by teaming up with local partners who build and run the stores. In both of these ventures, Big Yellow Self Storage has provided technical expertise and licensed its brand in return for a fee and a percentage of the revenues they generate, meaning they make a profit without having to invest capital.

Big Yellow Self Storage’s Dubai facility itself consists of 5 buildings on a 280,000 square foot (sq ft) site in the International Media Production Zone, a tax-free business park in the heart of the city. It is ‘one of the most advanced warehousing structures in the Middle East’, according to Ryan Cornelius, the head of Big Yellow FZ, the franchise which runs it.

Why do Emiratis need self storage space?

Self storage is a growing business in Dubai, fuelled by a lack of alternative options for storage. Many of the new homes put up during Dubai’s property boom in the last decade lacked enough storage space, while rapid economic growth has led to a shortage of warehousing.

The very unusual demography of the UAE has also assisted the growth of self storage. It is one of the few countries in the world where immigrants outnumber citizens, with over 80% of the population having been born overseas. These are mostly short-term, migrant labourers drawn to the country by the huge manpower requirements of the oil, construction and service industries. It means that many people may not expect to remain in the country long-term, and so choose to rent instead of buying property, giving them greater storage needs.

These include fairly large numbers of people from rich countries – over 100,000 Britons, plus other Europeans, Americans and Australians – who are wealthy enough to afford self storage, and are used to the concept of self storage from their home countries.

Differences between Dubai and UK self storage

The nature of self storage in Dubai seems to differ from that available in the UK in two main ways:

1) There is greater overlap between domestic and business self storage customers. Ghassan Abughazaleh (founder of Storall, one of Dubai’s biggest self storage companies) said in an interview with arabiansupplychain.com that ‘In many cases, customers that book for self storage will also require warehouse storage space for their professional requirements.’ Spotting an opportunity to profit from the shortage of warehouse space in Dubai, self storage firms there often target businesses more than domestic clients. Abughazaleh’s firm, Storall, actually offers a traditional 3PL (third-party-logistics) warehousing and transport service on the same site as their self storage business.

2) Any warehouse or self storage facility in Dubai (or anywhere else in the Middle East, for that matter), needs to have air conditioning to protect the goods it contains. The temperature outside is regularly in excess of 40⁰C throughout the summer, when it is also extremely humid. Very high temperatures aren’t something most UK self storage firms have to worry about!

Could Dubai prices hold back Self Storage?

Despite the slowdown in Dubai’s economy caused by the recent recession, continually high oil prices caused by ever-increasing demand bode very well for the self storage industry’s long term future. However, one possible barrier to more people using it is the high prices charged by firms.

Dubai self storage prices are quite high compared to UK ones. One of its firms, Sentinel Self Storage, leases 100 sq ft for 1,000 AED (United Arab Emirates Dirham) per month, or 19,200 AED a year.

£1 is equal to 5.47 AED, meaning the cost is £183 per month, or £3,511 a year. When you factor in the size of this self storage unit, it means that the price is over £35 per square foot for twelve months. By comparison, £25 a square foot per year would be considered a lot for self storage in the UK, and is about the ceiling of what the biggest companies charge in their central London facilities.

This also seems like rather a lot just in Dubai property terms. This self storage unit would be 192 AED a square foot per year; by contrast, property website Better Homes offers a 3 bedroom apartment in Dubai’s trendy marina development for just 79 AED a square foot per year.

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