Market Trends of Self Storage Industry
Personal Storage Segment is Expected to Hold Major Market Share
- The performance of self-storage properties is primarily driven by the demand for growing space for additional storage as families are growing with more material possessions. Moreover, the need for storage units is predicted to increase as baby boomers downsize.
- The increasing urban population causes smaller and increasingly expensive living spaces in cities with more renters who move around more frequently. The degree of urbanization worldwide was supposed to reach 57 percent by 2022. With over four-fifths of its people living in towns and cities, North America is the world's most densely populated.
- In the event of an impending recession triggered by coronavirus that would be partially driven by urbanization, personal storage is booming. Renters need a place to store their belongings that no longer fit when their rental space is reduced; they move home with their families or choose a more nomadic lifestyle. In view of the trend, personal-storage facilities are prospering.
- As the millennial population occupies a more significant percentage of those using self-storage, they expect to interact with operators using technology, specifically smartphones, apps, or responsive mobile websites. Virtual tours, online booking and payment, self-service kiosks, and automated access are emerging trends in response to the technological development in the sector. With the decreasing competitive advantage of physical location, these online channels provide new opportunities for emerging storage innovators to build upon and disrupt the industry.
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North America is Expected to be the Largest Market
- North America, which primarily includes the United States and Canada, is expected to lead the self-storage market. The demand for storage solutions and industrial automation drives the market. Some of North America's market drivers include an increased focus on reducing infrastructure expenditure, a growing need for business insights, and real-time data availability.
- The self-storage industry has been one of the fastest-growing segments of the commercial real estate market since its debut 36 years ago. According to SpareFoot.com, the storage industry records USD 29 billion in annual industry revenue as of January 2023, and the United States has an estimated 51,206 storage facilities in service currently.
- The companies in the region are also planning and continuously building self-storage. For instance, in March 2021, Life Storage planned to build a three-story, 216-unit, climate-controlled building on the property the company owned on Transit Road to expand its business in West Seneca.
- Demand for self-storage units is positive due to steady job creation and wage growth, bolstering household formation and consumer spending. The faster lifestyles and relatively more memorabilia collected by younger and older generations also fortify the future need for self-storage space.
- In July 2021, the global investment firm KKR acquired three self-storage properties in Austin, Texas, and Nashville, Tennessee, to meet the supply-demand fundamental and appealing long-term dynamics, including resiliency through economic cycles.
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