The market was valued at USD 40.73 billion in 2020, and is expected to reach a value of USD 53.92 billion by 2026, registering a CAGR of 4.79% over the forecast period of 2021-2026. The growth in this industry is expected to be positive during the forecast period, owing to the trends of increased urbanization and improved economic outlook across the regions. These factors have led to the growth of new businesses.
- The increasing rate of urbanization is one of the significant factors positively driving the market growth. The increasing urban population means smaller and increasingly expensive living spaces in cities with more renters who move around more frequently. London is a prime example of this trend, with its population hitting a new all-time high of 8.6 million in 2015. The population is projected to be more than 10 million by 2030.
- The improved economic outlook in the countries of the United States, Europe, and Asia is positively augmenting the market growth. The economic growth in the United States is constantly being driven forward by the ongoing innovation, R&D, as well as capital investment. For instance, over the past several years, the size of self-storage space completed in the United States increased from 18.5 million sq. ft. in 2015 to about 36 million sq. ft. in 2017.
- The government regulations hinder the marketâ€™s growth. The storage operators have continued to receive nonspecific warnings from the Department of Homeland Security that their facilities can be used to store materials that could be unleashed in the terrorist attack.
- The Self-Storage Association is the voice of the self-storage industry that serves as the industryâ€™s primary advocate on government relations and legislative matters. Over the past decade, SSA spent millions of dollars for influencing dozens of the relevant laws, including the laws providing licenses to sell tenant insurance, modernizing required methods of notice, authorizing reasonable late fees, and fighting the imposition of sales taxes on self-storage rents.
Key Market Trends
Personal Storage Segment to Occupy the Maximum Market Share
- In the current scenario, the homeowners and consumers are moving in an intriguing manner when it comes to their material possessions. The housing market favors downsizing to small and compact living spaces. This factor prompts the house owners to decide whether they want to keep or discard certain objects that demand space. In addition, the houses are adopting modern and minimalist aesthetic, like the Marie Kondo trend.
- Many of the baby boomers (people born during 1941-1965) are gearing up for retirement and looking for shifting from large houses to compact condo units.
- Globally, in many developed countries, a few building types have boomed, like self-storage lockers. Theyâ€™ve proven to be one of the highest revenue generating sources in real estate in the past half-century,
- The operators in the self-storage services industry have benefited from a steady demand from the Australian consumers in the past five years. The consumers who relocate for employment or study often use industry services, as few competitive substitutes exist. The consumers in transit from the primary places of residence are boosting the demand of the market.
Asia-Pacific to Witness the Highest Growth
- The increasing population density, along with the improving economic conditions across the Asia-Pacific region, in addition to the aging population and changing cultural norms, are the factors supporting the demand for self-storage in the region.
- Additionally, the emergence of the new players in the unexplored Asian regions, like India, adds significantly to the market growth. For instance, Orange self-storage company based in Bengaluru (considered to be the Silicon Valley of India) recently announced its plans to expand its presence into several other Indian cities, in order to capitalize on the growing demand for storage facilities.
- In Taiwan, owing to the rapid growth in online shopping and e-commerce sector, some vendors rented their storage space in several locations to facilitate last mile delivery. The self-storage facilities in commercial areas are mostly designed for business use. Many prominent companies have also started using these services for expanding their business footprints across the region.
The self storage industry is very fragmented and has a low market share concentration, owing to the presence of numerous small, medium, and large-sized vendors. The companies are competing for customers based on prices and other terms of storage contracts. The companies offer incentives, such as low-monthly prices, to attract customers.
- November 2018 - StorageMart announced its plans to develop a total of 135,000 net rentable sq.ft. of climate-controlled self-storage units in Lee's Summit, Missouri.
- September 2018 - CubeSmart opened a USD 7.5 million worth, 89,000-sq. ft. storage unit, in Lantana, South Florida. The self-storage space is to eventually have up to 750 spaces, priced between USD 68 a month and USD 363 a month, depending on the size of the space.
- July 2018 - Life Storage Inc. announced the rollout of 'Rent Now', a fully-digital rental platform. The customers can now â€œskip the counterâ€ by selecting a storage unit, completing the rental agreement, and making their rental payment online.
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