UK self storage occupancy on the rise28th May 2012

The sixth annual Self Storage Survey from the Self Storage Association and Drivers Jonas Deloitte shows that most operators are reporting continued resilience in the sector, despite the economic conditions. Although the average billed room rate has fallen slightly, to £21.06 per sq ft per annum, the survey results show a positive picture from the industry.

The main findings of the survey were:
· Average occupancy among mature facilities (those open for more than five years) has risen to 70% from 68% last year
· Rents have grown by a cumulative 7% per annum over the past five years – although have fallen 4% in 2012
· Length of customer stay remains stable
· Business customers have taken a higher proportion of occupied space
· Over 880,000 sq ft of development space is available for future potential expansion within existing facilities, if the economic conditions allow

Ollie Saunders, head of valuation, Drivers Jonas Deloitte said: “With occupancy rates on the rise, it is clear that the industry has shown resilience despite the economic conditions. While there has been a slight decrease in overall average rents in the recent survey, the performance of most operators has been very respectable. It is clear that self storage is an established and important industry in the UK.”

“The results vary from region to region. London and the South still dominate in terms of share of floorspace, accounting for more than two thirds. The Midlands, Wales and Northern regions are, however, continuing to gain market share.”

Anthony Duggan, head of research, Drivers Jonas Deloitte, said: “Although occupancy levels, rental rates and length of customer stay have not seen much movement since last year, the sentiment among respondents was positive. More than 60% of facilities are planning to raise rents in the coming year; a good sign in difficult economic conditions.”

Rodney Walker, chief executive officer of the Self Storage Association, said: “It is pleasing to see how resilient the industry has proved to have been over the past four years of difficult trading conditions. The self storage industry does not yet have a widely recognised product – most customers moving into facilities have not used self storage before and therefore the potential for its future use remains strong.”

“The responses for the survey were received before the announcement in the 2012 Budget of the Government’s intention to charge VAT on the provision of self storage from 1 October 2012. If implemented, this will have a significant effect on many operators of self storage who have currently opted not to tax (the majority of the Association’s members). It is very difficult to tell what the full impact of this tax change will be.

“The Association as a body, and many of its members, have made forceful and robust responses to the HM Revenue & Customs during its post-Budget consultation on VAT, as we believe the proposals to be seriously flawed. The Association has also offered to assist HMRC in the design of anti-avoidance regulations, which they are keen to see implemented.”