Access Self Storage: How does this large self storage company work?

Access Self Storage is very much a London and South-East based company, with a total of 52 stores, of which 30 are in the London area. They have 11 years’ experience in the market and they have over 18,500 customers. Apart from London, Access Self Storage has a strong presence in Birmingham and other cities of Central and South East England.

Access’ annual accounts and website give plenty of information about the company and, even though the accounts are only available up to March 2009, they do explain lots about how Access runs its self storage business. For example, on average they had about 370 storage customers per store and these customers must spend an average of about £2,000 per year, as Access Self Storage has a turnover of about £37– £38 million per annum.

New storage sites wanted!

The directors of the company are Shiraz Lalji, Nurallah Somani and Amrat Patel, and they are keen to expand through acquiring large freeholds. On their website they ask people who are sellers of properties to come forward, especially if they can offer sites suitable for new builds for self storage or for conversion.

They want sites which are between 0.8 acres and 10 acres in size with prominent road frontage and ideally in densely populated areas. They specifically target, for new outlets, these locations: London, Nottingham, Oxford, Cambridge, Swindon, Watford, Brighton and the Medway towns. Priority areas for them to build new storage rooms are said to be in the Home Counties, within the M25 and in the M4 corridor.

Access Self Storage has been very successful in marketing its space. In its annual report it describes self storage as “a new but growing phenomenon”, and has very widely and successfully used the “first month for 1p” offer. Like Big Yellow, they have a price promise on their website, but rather than offer to match competition on monthly storage prices, Access promise they will give “the best price the first time you ask”.

The Access reception areas supplying cartons, packaging materials and padlocks have a very smart feel to them and a good range of useful materials for the storage users. Most of the materials are branded in blue, with the Access Self Storage name.

Storage staff – about 4 employed administrators per centre

At the year to the end of March 2009 there were 220 staff working for Access Self Storage, with 24 of these in management and the other 196 in administration. That suggests just under 4 staff members per storage facility work in administration, and the equivalent of just under a half a staff member per facility is in management.

For the year to the end of March 2009 these 220 staff were paid a total of about £5.4 million, so on average they were each paid about £24,500 per annum. Pension contributions for the employees were modest, with a total of about £66,000 paid into a defined contribution pension scheme, averaging about £300 per year per staff member.

Managing the taxation of self storage profits

Perhaps the most intriguing aspect of the Access Self Storage Company is how well it is arranged from a tax perspective. Their accounts show a profit for the year ending in 2009 of about £1.4 million but corporation tax paid of only £8,000; and for the previous year the figures show a profit of £2 million and corporation tax paid of zero.

The key to this very tax-efficient arrangement seems to be that the actual self storage properties are all, or virtually all, owned by subsidiaries from whom Access leases them. In total Access Self Storage Limited paid over £16 million in rents to other group companies in the year to end March 2009.

There are about 40 related companies with whom Access Self Storage Limited does business, including leasing buildings from them and paying related companies for taking on “property and treasury risks”. Together these companies owe Access Self Storage Limited roughly £11.4 million but Access owes them about £9.5 million. Access Self Storage Limited isn’t in fact owned directly by any UK shareholders but is owned by a Luxembourg based company which is in turn owned by Oakdene Finance Limited, based in the British Virgin Islands.

Of course Access Self Storage is not alone in arranging its affairs tax-efficiently – Big Yellow Self Storage (Big Yellow Group) have set themselves up as a REIT (Real Estate Investment Trust) which is relatively tax-efficient for property companies. Whatever happens with its complex structure and rather involved tax affairs, it has a single powerful brand which is recognised, and customers will be principally concerned about the price they pay for storage and that their possessions are in safe hands.