UK Self Storage Market Report 2023: A Recap
The self storage industry in the UK has witnessed a multitude of changes over the past year. The 2023 Self Storage Market Report (free to download) presents an insightful look into the industry, unravelling several interesting trends and figures. With a focus on factors like occupancy rates, rental rates, consumer behaviour, and technology implementation - we’ve looked through the findings and given Stora’s view on the current landscape of self storage in the UK.
A 360-Degree View of The Self Storage Landscape
The report notes that the UK self storage market's occupancy rate remains healthy at 83.3%. Despite slight fluctuations, the average net rental rate per square foot per annum has seen an uptick, settling at £27.19, marking a 4% increase from the previous year.
Interestingly, consumer behaviour analysis has revealed that people renovating their homes are three times more likely to consider using self storage. Moreover, amidst changing times, 16% of customers have altered their self storage usage due to increasing inflation. However, this hasn't been detrimental as 68% of them are now using self storage more frequently as a result.
Looking into customer preferences, it's clear that the digital wave is leaving its mark. A whopping 75% of stores now allow customers to book and pay for their storage unit online, highlighting the industry's growing digitalisation. For our view on why this is good news for the industry, you can read more about how we see online payments as a window of opportunity for self storage.
The Challenges And Opportunities: Profit Margins, Discounts and Churn Rate
In a not-so-rosy revelation, about 33% of operators believe they will see a drop in profits in 2023. Churn rates have also slightly risen yet remain below pre-pandemic levels, stabilising at 81%. Meanwhile, discounts and promotions offered to new customers increased in 2022, against record lows in 2021 when self storage was riding a surge in demand following the Covid pandemic.
The report also underlines that customers undergoing a house move are three times more likely to turn to self storage. This presents a significant opportunity for storage providers to position themselves not just as a solution for negative life events (like downsizing, death and divorce) but happier, if somewhat stressful, moments in people’s lives.
Deeper Insights: Consumer Behaviour and Awareness
The report offers deeper insights into the behaviour of self storage users. Younger individuals, those under 45, tend to be short-term users, while older people tend to retain their unit for longer durations. Additionally, life events play a crucial role in self storage usage, with a death in the family emerging as the most common life event leading to the use of storage facilities.
While customer satisfaction seems relatively high, around 19% of users do not perceive their storage unit to be of good value. Most likely, as a direct result of the cost-of-living crisis and surging inflation in the UK. On the brighter side, public awareness of self storage facilities is rising, with 51% of the population having a good understanding of this service.
Embracing the Future: Digitalisation and Technological Advances
Reflecting the broader trend towards digitalisation, the number of stores allowing customers to complete payments online continues to rise, up from 71% in 2021. Now, 75% of stores offer online booking and payment, which is likely driven by improved online ID verification methods and increasing comfort with online transactions. However, it's worth noting that 45% of operators aren't considering implementing new technologies this year, suggesting a potential area of opportunity for industry growth.
Furthermore, 45% of people are comfortable visiting an unstaffed facility for the first time, signifying the rise in remotely managed sites and automation in the industry.
Question 1: What is the average net rental rate in the UK self storage market in 2023?
Answer: The UK average net rental rate is £27.19 per square foot per annum, up 4% on last year.
Question 2: What is the current occupancy rate in the self storage industry?
Answer: Occupancy levels maintained at 83.3%, on average.
Question 3: How is customer behaviour changing in the self storage industry?
Answer: Perhaps unsurprisingly during a cost of living crisis, 19% of self storage customers now believe that their storage unit is not good value for money.
Question 4: What percentage of self storage stores offer online booking and payment?
Answer: 3 in 4 self storage stores now offer their customers the option to book and pay for their new storage unit online.
Question 5: What are some key trends in the UK self storage market in 2023?
Answer: Net rental rates have risen slightly, as have churn rates. Discounted rates and offers have risen again, after a decline during the peak of 2021’s industry performance.
In sum, the "UK Self Storage Market Report 2023: A Recap" presents a multifaceted view of the industry, highlighting key trends, customer behaviour, and the shift towards digitalisation. Despite challenges, such as increasing churn rates and potential drops in profit, the industry shows promising growth areas in digitalisation and consumer awareness.
The self storage industry is navigating through changing tides, adapting to shifts in consumer behaviour and technological advancements. As it continues to evolve and adapt, it remains to be seen how these trends will shape the future of self storage in the UK.