Downsizing is driving self storage growth
SELF storage is a growth industry for Manchester according to figures compiled by Deloitte Real Estate and the Self Storage Association.
It says the sector has grown by 12% over the past year driven by companies taking smaller offices to cut costs and smaller city centre apartments.
According to the report Manchester has 528,000 sq ft of self-storage space, the greatest amount of any city outside London. This compares to 325,000 in Liverpool. The average cost in the North West is £19.96/sq ft a year, but occupancy rates were unavailable.
Gareth Hughes, assistant director at Deloitte Real Estate said: “The tough economic climate has meant that many people have had to downsize and with the average one bedroom apartment offering just 402 sq ft of space, it isn’t surprising that many people have put some of their possessions into secure storage.
“As Grade A office space in the city centre is also at a premium, many businesses have perhaps agreed lets on smaller floor plates than they would have liked, which has meant that they have needed to use external facilities for record keeping and surplus furniture storage, for example.”
In October 2012, a 20% VAT charge was introduced to the cost of self-storage which most operators have had to absorb.
Bernard Bailey, owner of Easy Access Group, has 55,000 sq ft in Stockport and is taking a further 45,000 sq ft in Trafford. He said: “The business has grown year-on-year in a very competitive market within very turbulent economic times. As a result of this we are in the process of opening a new self storage site in the Manchester area.
“We have managed to survive even with the added impact on our business of the 20% VAT increase by listening to our customers and adapting to change by offering a more proactive approach to promotional activity and flexibility, which is working well. Our customer base is an even mix of domestic and business clients within a certain mile radius of our self storage facility.”
He added: “Even though the property market has slowed down, we have experienced growth from domestic customers, due to home refurbishments, downsizing, extensions and divorce. Landlords are also using our services to assist in growing their portfolios during the housing market downturn.”
Chris Gordon, area manager for the North at self-storage provider Big Yellow, said: “The Manchester self-storage market is strong and occupancy levels are stable. Our North West customer base is evenly split between domestic and business customers. Our commercial customers are extremely diverse, ranging from architecture practices that store paperwork and plans to national carbonated drinks companies that use our facilities as drop-off and collection points for their regional sales reps.”
There are 830 self-storage facilities in the UK providing 30.1 million sq ft of space, according to the report. Deloitte Real Estate estimates the total turnover for the UK industry in 2012 was £380m from around 400 different operators, employing over 2,000 full-time staff.
