A new research report reveals growing investor interest in the self-storage sector and strong potential for further growth in what is still largely an untapped market in Europe.
According to the report from the Federation of European Self Storage Associations (FEDESSA) and global real estate advisor, CBRE, Europe’s self-storage market currently spans 16.5 million m2 in gross area, representing a 67% increase since 2019.
Despite a small drop in occupancy rates across the continent, rental returns have increased by 2% on average to €296.53 per m2 over the past five years. Higher increases of 5%-plus have been recorded in Portugal, Spain, the Netherlands, Germany and Belgium, reflecting strong demand for self-storage in these regions.
The report suggests investor appetite for self-storage facilities remains strong, with year-on-year increases in capital deployed since 2020 and a wide range of investor types seeking to capitalise on the opportunities available. This is also evidenced by corporate mergers and acquisitions, such as Shurgard’s takeover this summer of UK peer Lok’nStore.
The volume of equity and debt entering the market has resulted in a larger development pipeline than was recorded last year, the researchers found. A total of 262 projects were registered as being in the planning stage or under construction.
Nevertheless, there remains an untapped market of people unaware of the potential benefits of self-storage across Europe, according to the report. In most markets, less than a third of consumers ‘understand’ self-storage, which presents a ‘significant opportunity’, it points out. By utilising public marketing and online campaigns, the industry can target those consumers who not currently considering such facilities, it suggests.
Oliver Close, senior director in CBRE’s operational real estate team, said: ‘The self-storage industry continues to perform well with strong levels of revenue against a backdrop of long-term market growth, on both the demand and supply sides. Investors are recognising the lucrative opportunities available, and with a robust development pipeline we can expect to see an influx of new stores across the continent.’
Rennie Schafer, CEO of FEDESSA, added: ‘The findings of our survey show continued high demand for self-storage across Europe and increased rental returns in key markets. In addition to new developments, we are seeing increased investment in existing stores in response to technological changes and sustainability improvements.’
