Changes in lifestyle and living spaces have seen a surge in demand that’s driving record performance for the self storage industry – but there’s still room for growth, according to SSAA’s newly released State of the Industry 2022.

Unprecedented demand

The study found 9.4% of the total adult population in Australia and New Zealand are now using self storage, up from 8.6% in 2020.

The study, which explores the state of self storage and the future outlook for the industry across Australia and New Zealand, found that changes in lifestyle and the housing market have been driving demand for self storage, with average facility occupancy rates now sitting at 91%.

The state of the housing market, as well as the continued disruption from COVID-19 and the rise in working from home, have led people to seek self storage as they downsize, declutter, move interstate and make space for permanent home offices.

The study found Perth and Brisbane have been the standout performers over the past 12 months, with RevPAM (Revenue Per Available Square Metre per annum) growth of 41% and 21% respectively.

This growth is attributed to the high levels of interstate migration to these markets, underpinned by the affordability and liveability of these cities compared to more expensive southern cities.

Record levels of supply

The increase in demand has coincided with an increase in supply. The study found there are now 2,213 self storage facilities across Australia and new Zealand, a 9.5% increase from 2020.

But there is still considerable untapped storage demand across both markets. Approximately 2.8 million Australians and 660,000 New Zealanders recently needed a storage solution but ultimately didn’t use self storage, presenting the industry with an opportunity to educate the general public about the benefits of self storage.

Similarly, 23% of current self storage users have found themselves on a waiting list for self storage at some point, suggesting that though supply has increased, it hasn’t yet been able to keep pace with demand.

With the construction industry dominated by supply chain and labour challenges in 2021 and 2022, delaying projects that were planned for completion in 2022, it’s likely that high occupancy and limited new supply have constrained usage rates.

More than 90 new self storage facilities are forecast for the next two to three years, with usage rates expected to climb even further as that new supply comes online.

What’s next?

The industry’s growth is expected to normalise in the near term, as changes in discretionary spending and a softer housing market could dampen some demand.

However, the study also notes a number of factors – including continued high levels of interstate migration, the return of overseas migrants, an increasing retirement rate, and increasing rates of death and divorce – that are expected to drive demand for self storage in the years to come. These strong fundamentals are set to underpin the return to stabilised growth.

Extreme weather events are also on the rise. The rate of displacement from natural disasters has increased by 175% in the past five years, and 431% in the past 10 years across Australia. We know that the disruption caused by these disasters has driven self storage demand, particularly in impacted markets with low housing rental supply and low vacancy levels.

SSAA engaged Cushman & Wakefield and FiftyFive5 to contribute to the study, which is based on interviews with 125 operators across more than 800 facilities as well as 2,550 consumers.

SSAA will continue to share the study’s insights in a range of formats over the coming months, enabling our members to translate this research into strategy and practical applications.

Self storage remains an industry full of opportunity, and we hope these insights guide our members to further success.