Between consumerism, a growing population and shrinking home sizes, land starved Singapore is facing a space shortage. Spotting an opportunity, self-storage facilities have been popping up around the island to plug the gaps. By S. Sakthivel
Death, density, divorce and dislocations have become the four pillars of growth for the self-storage industry.
In land scarce Singapore, space has always been a premium commodity. Office spaces are shrinking, housing units are being systematically reduced to accommodate more residents in the coming decades, and people are amassing too many things as relationships become more tenuous — be they personal or business.
The self-storage industry offers an easy solution for excess inventory or sentimental items that people don’t want to get rid of. It’s cost effective and keeps things out of sight.
Since its introduction to Singapore in 2002, the industry has grown rapidly, from just two operators to more than 50 facilities today with a total of two million square feet. The growth of the industry is tied to a few factors — the downsizing of housing, the increasing affluence of the middle class, and the accessibility and popularity of e-commerce.
According to Luigi La Tona, Executive Director of the Self Storage Association Asia (SSAA), the demand for extra storage space has always been apparent in Singapore and in other highly packed metropolises in Asia. Average household space per person in Singapore, for example, stands at 247sqft while in Hong Kong it is just 167sqft. In comparison, Australia and the US offer 853sqft and 980sqft of space per person, respectively. He says that there was a lot of money to be made in the early days of the industry: The availability of cheap industrial land, a better property market, and an untapped demand led to attractive headline numbers that fortified the positions of Singapore’s largest operators like Lock + Store, StorHub, Store Friendly and Extra Space.
“Housing spaces are getting smaller. Everyone wants to have better access to amenities so developers will build plenty of apartments nearby but don’t put in adequate storage space,” says Michael Hagbeck, Consultant, Minibox Self Storage, which is owned by Blackstone, and is one of the new entrants to the industry.
A ripe opportunity for new entrants? Or will they drown out? Read the full story on STORM V26, available at Allscript, MPH, and Kinokuniya.