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FEDESSA study: Self-storage trend continues despite the pandemic

FEDESSA study

One could have assumed that the pandemic had less people going outside and moving house and many more people staying at home in 2021. This would have had a severe effect on the self-storage industry, too. According to a study of FEDESSA, a self-storage association, this has not been the case.

Every year, the industry association puts out the European Annual Industry Report that gathers data on the newest developments in the self-storage cosmos. Much of that data is from Germany. Because: Just after France, Germany is on second place as one of the largest self-storage markets in Europe in terms of available space. However, the fact that we still rank behind the United Kingdom despite this achievement also shows that the potential for further development has not yet been fully exploited.

In 2021, 342 new self-storage facilities were created all over Europe. Some of these were built by us here at LAGERBOX. What does this mean in terms of the COVID-19 pandemic? In addition to continuous growth, occupancy and rental levels also remain at a good level. After all, without maintaining this level, expansion would not be profitable.

Market share of the “Big six” is shrinking

The “Big six” account for 84 percent of all the self-storage facilities in Europe. They include Germany, France, Spain, Norway, the Netherlands, and the United Kingdom. Nevertheless, the market share is falling because development is very rapid, especially in countries where self-storage is just starting to take off.

The study included 90 self-storage companies from 18 European countries, which account for about a third of the available self-storage space, and can thus provide representative results.

The development is progressing

The positive development of the industry was especially apparent during the coronavirus pandemic. While other sectors were struggling to cope in 2021, self-storage increased revenues by 50%.

Prices have been going up everywhere in Europe. On average, the square metre now costs 10 euros more per year. Rents didn’t increase quite as strongly in Germany compared to, for example, the Netherlands or Portugal. Unsurprisingly, the rents are the highest for our neighbours in Switzerland. Rents and pricing in Germany and Austria are average in Europe. The most affordable storage units can be found in Poland. Prices are not tied to quality, however.

Occupancy also improved by 1.7 percentage points compared to 2020, in the midst of the pandemic. Storage units are let out at 81.5 percent. We can say: Perfect occupancy is significantly higher. According to the FEDESSA survey, only 28 percent of self-storage providers have an occupancy of 85 to 90 percent.

Digitisation

Above all, the pandemic has pushed forward digitisation. In the self-storage sector, too, many things that had to be done on-site were digitised. Storage unit tenants can now rent their units online. About 58 percent of people did so.

LAGERBOX offers several service offerings online, including its size calculator, helping customers to only rent the space they need and not spend one euro more.

Expansion after the pandemic

Only 13 percent of the surveyed companies see the pandemic as a threat. This result is also reflected by the data on expansion. 157 locations are currently being built, 90 more are being planned. Despite this, the industry still has to deal with rising costs for land and problems with building permits, which are also a result of the pandemic.

However, almost everyone agrees: Profitability will be maintained in 2022. Of that 86 percent of respondents are sure. Three quarters expect utilisation rates to stay where they are. In terms of attracting more tenants, “only” 59 percent expect an increase, but still only 5 percent are expecting a decrease.

In summary, the results of the study can be interpreted as follows: The self-storage industry is growing and still has a lot of potential.

Source and full study - Link