Self Storage Association UK

SELF STORAGE ANNUAL INDUSTRY REPORT 2021 1 Cushman & Wakefield CONTENT SUMMARY OF KEY FINDINGS 05 INTRODUCTION AND METHODOLOGY 07 IMPACT OF COVID 10 INDUSTRY OVERVIEW 14 INDUSTRY HIGHLIGHTS 18 UK ECONOMIC AND POLITICAL OVERVIEW 22 INDUSTRY SURVEY 42 CUSTOMER SURVEY 70 PUBLIC SURVEY 90 INVESTOR OVERVIEW 110 CONTIRBUTORS LIST 2021 116 CONTACTS 117 2 Cushman & Wakefield Self Storage Association UK 3 SUMMARY OF 0KEY FINDINGS OCCUPANCY THE UK AVERAGE ONLY 17% OF 83% OF BUSINESSES ON CURRENT NET RENTAL RATE IS CUSTOMERS HAD THAT USE SELF LETTABLE SPACE £23.94 PER SQUARE THEIR USAGE OR NEED STORAGE HAVE IS 82.3%, UP FROM FOOT PER ANNUM UP FOR STORAGE CHANGE LESS THAN 10 STAFF 76.2% LAST YEAR 3.7% ON LAST YEAR DURING THE PANDEMIC 18% OF OPERATORS PEOPLE RENOVATING 29% OF SELF CUSTOMER INCREASED THEIR THEIR HOME ARE STORAGE PREFERENCE TO LEVEL OF DISCOUNTS 3 TIMES MORE LIKELY CUSTOMERS ARE BOOK THEIR UNIT IN 2020 BUT 9% TO CONSIDER USING INVOLVED IN IN STORE DROPPED DECREASED THEM SELF STORAGE. MOVING HOUSE FROM 33% TO 25% A DEATH IN THE 76% OF BUSINESSES 92% OF CUSTOMERS 70% OF SELF FAMILY IS THE ALLOW CUSTOMERS ARE SATISFIED STORAGE USERS MOST COMMON TO RESERVE OR PAY WITH THE SERVICE ARE LIFE EVENT THAT FOR THEIR UNIT 40 - 70 FROM THEIR SELF YEARS OLD PEOPLE USE ONLINE STORAGE STORE STORAGE FOR. % OF 43.3 DIVORCED SELF STORAGE OR SEPARATED 50% OF THE PUBLIC HAVE CUSTOMERS PEOPLE ARE TWICE A GOOD AWARENESS HAVE USED SELF AS LIKELY TO USE OF SELF STORAGE STORAGE SELF STORAGE PREVIOUSLY 4 Cushman & Wakefield Self Storage Association UK 5 INTRODUCTION AND 1METHODOLOGY Self Storage Association UK 7 INTRODUCTION AND METHODOLOGY This is the 14th year the Self Storage Association UK (SSA UK) has been surveying its members and producing an annual industry report. The report covers all viewpoints 1of the industry, collecting data from operators, customers and the general public. The impact of the COVID-19 pandemic has resulted in some significant variations in the data this year. There were also additional questions added to deal specifically with the pandemic and its impact on the industry and its customers. Over the last 5 years the sample group has remained The customer survey was completed in January 2021 fairly stable with some additional operators, mergers by 29 self storage companies across the UK who have and acquisitions reflecting the growth of the industry over 125 stores in total. 1,226 customers responded as our sample group grows. This allows for better to the survey of which 73% were domestic customers comparison of the data on a year to year basis. With and 27% business customers. This survey was sent to around a third of stores in the UK completing the the main contact on the self storage contract. The survey, representing just under half the storage space, survey was entirely voluntary and without reward. the sample size is exceptionally robust. The latter part of the survey asked specific questions addressed to either private/ domestic customers or For the sixth year, the report has been produced business customers. 744 domestic customers and 270 in conjunction with Cushman & Wakefield. Their business customers provided answers to these more extensive experience in valuing self storage properties focussed elements of the survey. around the world, as well as knowledge of the broader property market has further added to the valuable The public survey conducted online by YouGov information in this report. The economic overview on behalf of the SSA UK, was completed between provided by Cushman & Wakefield included in the January 28 and 29. It was an online survey with report also gives context to the achievements of the data taken from a statistically selected and weighted industry. sample that represents the demographics of the adult UK population. This year 2,092 people This year, to supplement the document, there is an completed the survey. interactive online dashboard that allows people to further interrogate the key metrics of occupancy and I would like to thank the members of the SSA UK who revenue on a more regional basis. The data can be responded so promptly to the survey this year and the examined at a county level and down to postcodes team at Cushman & Wakefield for collating the data, where there are 5 or more stores from different providing commentary and interpretation of the data operators in the data set. and producing the final report. Also thanks to all the operators who allowed us to survey their customers. The operators survey was completed by 76 companies I hope that you find value in this report, it certainly with 504 stores in total. They were all members of the further demonstrates the industries resistance to SSA UK. The survey was completed in the months of political and economic challenges during this recent January and February based on data from the 2020 pandemic. calendar year unless otherwise stated. Compared to the industry as a whole the data set is slightly weighted to larger operators as less of the small RENNIE SCHAFER independent operators complete the survey. CEO SELF STORAGE ASSOCIATION UK 8 Cushman & Wakefield Self Storage Association UK 9 IMPACT OF 2COVID-19 Self Storage Association UK 11 IMPACT OF COVID-19 PANDEMIC ON THE INDUSTRY On 23 March 2020 the first lockdown commenced in the UK as a result of the COVID-19 pandemic. This meant that all non essential retail and businesses were forced to close and 2people were required to stay at home except for essential travel. Self storage was deemed to be a part of the logistics chain, classed as an essential service and allowed to remain open under certain conditions. The industry is used by the healthcare and food industries as well as many online and other businesses permitted to operate during the lockdown. It was also deemed as low risk as there is minimal contact between people within a self storage business. Operators were required to implement social changing circumstances such as working from distancing policies for staff and customers home or having children at university come home, as well as rigorous cleaning and sanitisation required them to make more space in their homes, regimes. Some chose to reduce their operating another opportunity for self storage. There was hours or move to fully remote operations with no demand from businesses needing to make more interaction between staff and customers. Staffing space along with online retailers who could no levels were often reduced initially, and systems longer get “just in time” stock. Some businesses put in place to separate staff working together at were also assisting the NHS and other providers the same store. As the pandemic continued to in storing PPE and other equipment. impact the country, further protection was added such as use of face masks and protective screens. At the time of writing this report the country The industry remained open during the course was easing out of lockdowns with over 50% of the pandemic for those customers that were of the public having received their first dose permitted to travel. As the self storage contract of a vaccine. The industry has adapted to the is a licenced use of space, not a property lease, pandemic requirements and most stores are the payment holidays and eviction moratoriums back to full operation in terms of staffing and provided in the real estate market did not apply opening hours. There has been a shift within the to self storage. Operators were able to make industry as more operators offer a full or partial individual arrangements with customers in online sign up system, so less customers need to financial difficulty, as normal, and could terminate complete contracts in store with staff. As the data self storage contracts if required. in the report shows there are also more operators allowing customers to book their unit online. As the data in this report shows the industry held up well during the pandemic. The churn Despite the challenges of construction during the of customers was lowered, with people not pandemic the industry continued to grow with able, or willing, to move out during the various almost 100 stores of various sizes opening during lockdowns. However, there was not a mass the year. While there were delays in construction exodus of customers when the lockdowns were during 2020 the pipeline for growth remains eased. The government’s stamp duty holiday strong for 2021 and 2022 with operators optimistic resulted in property transactions and house moves about future expansions. continuing. If not increasing, during the pandemic, driving more business to self storage. People’s 12 Cushman & Wakefield Self Storage Association UK 13 INDUSTRY 3OVERVIEW Self Storage Association UK 15 INDUSTRY OVERVIEW As the self storage industry develops and evolves the exact definition of self storage has been debated. It is a term increasingly being used by a variety of businesses offering SUPPLY 3different forms of storage solutions. MILLION SQ FT Self storage in the UK is not a regulated industry, This definition would not include mobile storage 50.5 there is little guidance from government as to where portable units are delivered to customers exactly what makes a self storage store. There and then returned on request as this does not is a European Standard for self storage, however meet the criteria of static space or ready access. this was drafted over 12 years ago before newer Similarly it would not cover peer to peer storage STORES industries like mobile storage, trade counters, in most cases as this also would not meet the peer to peer storage and valet storage had criteria ready access without intervention.

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