Storage.co.uk’s Self Storage Survey 2011

A snapshot of the UK self storage industry

Storage.co.uk recently sent out a brief survey to every self storage centre in the United Kingdom, attempting to gain some insight into the outlook for the industry next year.

Respondents were asked just four simple questions, meaning that ‒ unlike some surveys ‒ it could be filled in quickly and easily.

We wanted to know

• whether they are planning to increase their rental rates in 2011;
• what percentage of their space is currently occupied;
• do they think 2011 will be a better year for their business than 2010;
• and what percentage of their new enquires currently comes from the internet.

The fact we asked every company in our database means this is the most representative survey of the UK self storage industry that’s out there, as it doesn’t require membership of any trade organisations or other groups to take part.

The answers we got were illuminating, and show that the UK self storage industry remained in a healthy position at the end of 2010, despite the recession, and that most self storage companies have high expectations as we go on into 2011.

Does your self storage company plan to increase its rates in 2011?

More than two-thirds of the respondents (69%) said they are not planning to increase their rental rates next year, with many of them saying that they felt their current rates were reasonable and reflected the average for their local market.

This suggests many self storage companies predict 2011 will be a year when hanging on to their existing customers is more important than trying to extract the largest possible profit from them. Self storage companies typically look to raise their rental rates for existing customers over the long term, but will often strategically lower them as well during lean periods in order to increase their occupancy.

Several firms pointed out that their rates will go up without the management increasing them through passing on the higher rate of VAT. Most self storage companies do not charge VAT on their rental fees because of how self storage is classified: indoor self storage units that the landlord doesn’t have access to are VAT-exempt (i.e. they are treated like rented property), while some self storage containers are charged VAT where they are thought to be moveable plant rather than equivalent to fixed buildings. It will be interesting to see if those companies affected lose customers because of this unavoidable rent increase.

Roughly what percentage of your self storage space is currently occupied?

On average, 74% of space in the respondents’ self storage facilities was occupied, which seems a high level for two reasons.

Firstly, the economy remains sluggish, with 2.5 million unemployed and the housing market (which self storage relies on heavily) not having regained its pre-recession lustre. It’s impressive that this much self storage space is still being rented despite these circumstances, especially given that a number of the respondents indicated they had opened only very recently.

Secondly, this question was asked in early January, traditionally a seasonal low-point for self storage when the housing market is at its least active and people are nursing their festive debts. Although most self storage centres would like to be 100% full all year round, to be three-quarters full on average in January is still quite a good achievement.

Does your self storage company think 2011 will be a better year than 2010?

Although this survey was sent out fairly close to the infamous ‘Blue Monday’ of late January (supposedly the most depressing day of the year), optimism for the new year was still surprisingly high among respondents. A full 90% of the self storage companies who replied said they thought 2011 would be a better year than 2010.

As mentioned above, for several companies 2010 was their first year of trading, and research suggests a self storage facility typically reaches its highest occupancy levels after about three years of operation, so these firms have every reason to expect an upward trend. However, for the more established ones this prediction has everything to do with the recession.

2011 should be an important year for the UK economy, as the coalition’s spending cuts will either re-invigorate investment from abroad by proving the government’s fiscal solvency, or tip us into the dreaded ‘double-dip’ recession where trading conditions could deteriorate a lot further.  It’s natural to be optimistic, given that the last two years have already been very tough for many small businesses; and with plenty of negative indicators, such as unemployment, already at historically very high levels, lots of people may not think things could get much worse.

Also no doubt playing a role here is psychology, as small-business people tend to be optimists who believe their business is going to work out even when others are falling by the wayside, as it takes a lot of faith to branch out on your own in a crowded marketplace. Hopefully, in 2011, this faith is set to be rewarded.

What percentage of your enquiries for self storage comes from the internet?

The average answer here was 49%, although this hides some big disparities between a lot of companies that said over 60% (including some figures in the 80s and 90s) and a minority who said they get almost no online enquiries.

Still, if even the average is 49% then this is still quite high. For one medium to account for virtually half of most companies’ new business is impressive, given it means that all the other avenues – phone, signage, print advertising etc. – have to share the remainder between them. We like to think that Storage.co.uk plays its part in this trend.

It demonstrates the importance of search engine optimism (SEO), and having a strong online presence in general, which is difficult to achieve without a large budget, as the biggest firms tend to dominate the most popular search-terms online. It would be fascinating to learn how this percentage has changed over the last ten years, as until quite recently it would probably have been a lot lower.

3 Responses to “Storage.co.uk’s Self Storage Survey 2011”

1. Charles Stanbury says:

   February 1, 2011 at 10:54 am

   A good survey.-Well done

2. cambridge accounting says:

   February 15, 2011 at 9:03 am

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3. David Anderson says:

   July 14, 2011 at 1:07 pm

   Nice survey done with lots of creativity.