self storage market is estimated to be valued at US$ 57.76 Bn in 2024, exhibiting a CAGR of 5.4% over the forecast period 2024-2031. Furthermore, The market is experiencing growing demand for climate-controlled and specialty storage units, like those for storing wine.
Market Dynamics:
Global self storage market growth is primarily driven by two major factors- rising migration trends across the world has led to increased need for temporary or long-term storage spaces for renting households to park their belongings. According to United Nations, the number of international migrants reached an estimated 272 million in 2019, thus, boosting demand for self storage units. Rapid urbanization has lessened living spaces in tier 1 and tier 2 cities leading to lack of room for storing excess belongings. People living in urban areas opt for renting self storage units rather than disposing of or lugging around unusable items.
Market Driver: Increased Demographic Mobility Boosts Demand for Self Storage Units
Increased demographic mobility is expected to drive the market growth as people are moving more frequently for jobs, education or lifestyle reasons. Downsizing households and delayed marriage rates also mean people accumulate more belongings that need to be stored when moving. Self storage offers a convenient and cost-effective solution for storing possessions during transition periods like moving to a new home. The ability to easily load and access storage units makes self storage attractive as compared to other options like renting a larger home with extra rooms. Demographic trends towards increased mobility is expected to sustain demand for self storage space.
Market Driver: Downsizing of Living Spaces Increases the Need for Off-Site Storage
Another major driver for self storage market is the trend toward smaller living spaces. As real estate prices increases, developers are building smaller apartments and homes with less built-in storage. At the same time, consumers still wish to accumulate possessions and avoid discarding useful items. This mismatch between possessions and available home storage space boosts demand for self storage units. Off-site storage allows people to de-clutter their homes and still retain their belongings. Even as people live in smaller areas, self storage enables them to maintain large volumes of goods. This market driver is likely to persist as real estate costs continue increasing pressure to downsize living quarters.
Market Restraint: Economic Downturns Can Slow Self Storage Rental Activity
A key restraint hampering the growth of self storage market is the impact of economic recessions. During downturns, people may delay moves or downsizing efforts that activate demand for storage. High unemployment can reduce households' discretionary spending, thus, people refrain from renting storage units. In a weak economy, storage facilities can see decreased occupancies when renters are unable to afford payments and default. Although self-storage is generally more stable than other sectors, it can still slow down during economic downturns as rental demand decreases. Market participants need to consider economic uncertainty as a potential risk factor in their business strategies.
Market Restraint: Rising Construction and Land Costs Limit Facility Development
Another market restraint is rising costs associated with developing new self storage facilities. The self storage business model requires purchasing large plots of cheap land near residential areas for construction of multi-story buildings. However, suitable land parcels in desirable locations are becoming scarce and expensive. The costs of construction materials and labor have been going up lately. These higher expenses for land and building make it harder for developers to make money from new facilities. To balance out these high costs, it's important to keep rents at a strong level. Cost-prohibitive prices for new sites could restrain the industry's construction pipeline if not addressed.
Market Opportunity: Partnerships with Real Estate Developers Open New Market Opportunities
One opportunity area for self storage companies is partnering with residential and commercial real estate developers. By integrating small storage units directly into multi-family apartment or mixed-use buildings, self storage providers gain access to rental demand without needing separate land acquisition. Developers also benefit from the additional revenue stream. These joint ventures allow storage to be even more conveniently located for renters. As more living and work spaces incorporate mini storage options on-site, the addressable market expands significantly. Partnerships are a promising avenue to overcome obstacles around scarce developable land.
Market Opportunity: Expanding into Adjacent Storage Service Lines Broadens Revenue Potential
Another opportunity lies in complementing traditional storage rentals with adjacent specialty service lines. Examples include providing mailing addresses, packing/unpacking assistance, freight handling, or storage/handling of boats, RVs and luxury vehicles. Targeting specific rental customer segments like business owners or movers expands the total-addressable market. Bundling additional services also deepens customer lifetime value by increasing customer “stickiness.” Cross-selling and service line diversification allows operators to derive greater revenue per facility. It helps optimize storage space utilization. Tapping into adjacent services multiplies the self storage industry’s monetization avenues.
The self storage market growth is driven by trends toward increased demographic mobility and downsizing of living spaces. However, economic downturns and high development costs pose restraints. Key opportunities include partnerships with property developers for on-site storage, as well as broadening revenue streams via adjacent specialty service offerings. Leveraging such opportunities will help sustain strong growth prospects for industry players.
*Link: https://www.coherentmarketinsights.com/market-insight/self-storage-market-5441
Key Developments:
- In September 2023, AECOM, a leading infrastructure consulting firm worldwide, appointed a new Regional Chief Executive for its Canada and Australia New Zealand operations
- In February 2023, CubeSmart released its financial results for the three and twelve months ending on December 31, 2022. It highlighted an increase in quarterly dividends and the addition of 28 stores to its third-party management platform.
- In December 2022, Carlyle, a global investment firm, and Safestore announced the acquisition of a portfolio of self-storage assets operated under the myStorage brand. This portfolio includes 7 properties in Germany, with a total leasable area of 30,000 square meters. These assets are located in major metropolitan areas in Germany, including Berlin, Stuttgart, Ulm, Nürnberg, and Mannheim.
Key Players:
Life Storage, National Storage Affiliates Trust, Simply Self Storage, Safestore Holdings, Storage Mart, Big Yellow Group, Metro Storage LLC, All Storage, StorQuest Self Storage, Amsdell Companies, Iron Mountain Incorporated, Public Storage, Extra Space Storage Inc., CubeSmart, U-Haul
