How much does self storage cost ?
An Introductory Guide If You’re Thinking About Opening a Self Storage Business
Self storage costs are at the highest they’ve been since records began.
The average rental rates have risen by 4% since 2021, which due to the pandemic was already up 9% on the year before.
Combining high inflation and the ending of the pandemic, owners have pushed prices up.
The results? In 2022 the industry was never more profitable.
So what exactly is the current climate? How much does self storage cost today?
In this article, you’ll learn a breakdown of industry average self storage costs.
Use this to help draw up your pricing strategy and decide if you’re charging the right amount.
Keep reading to learn more.
Table of contents
● An overview of the self storage industry in the UK
● 5 factors that affect the cost of self storage in the UK
● Types of self storage units
● The average cost of self storage in the UK 2022
● A comparison of the average cost of self storage in the UK 2022 vs 2021
● Final thoughts
An overview of the self storage industry in the UK
There are around 2,231recorded self storage facilities in the UK, according to estimates. These are spread across 1,086 brands.
There is a rising number continuing to develop in rural locations and secondary cities. There are more unstaffed / automated sites opening too.
What’s next is difficult to determine.
The current climate is one of uncertainty. The UK is witnessing high inflation rates, high fuel costs, and rising utility and food prices.
But how does all this affect the cost of self storage?
5 factors that affect the cost of self storage in the UK
There are a variety of factors to consider that play their part in the cost of self storage. These include:
● Duration of rental
● Additional features
Size of self storage
Self storage comes in a range of sizes.
From 10 sq. ft. up to 600 sq. ft. It makes sense that the bigger the storage, the higher the cost due to more land required.
Consider though the effective yield. Rental yield is a calculation of potential rental return from a property vs the investment made. It is a tried and tested way of determining how successful your return on investment is simply expressed as a percentage of the total property value.
When you consider rental yield in self storage on a square foot basis there are some interesting considerations. For example per square foot; operators often ask more for a smaller unit, than for a larger unit. In this scenario therefore you might well assume that having 50no. 30sqft units, would therefore give a better yield than 15no. 100sqft units, however, be warned; your specific region and demographic will dictate what size units are most in demand at various times, and therefore what size units will achieve optimal occupancy rates.
Frustratingly there is no one size fits all solution to this. It really is a case of using your best local insight blended with a touch of industry data and comparison, and then market testing to see what works for your site.
Location of self storage
Geographical location also influences the cost of self storage.
This is due to the cost of land in the area. For example, in cities, the land is more expensive due to higher demand and less amount available. In rural areas, the cost goes down due to higher supply and less demand.
It will come as no surprise that London has the highest costs, whilst further afield, such as the north of England and the Midlands, have lower costs.
The duration of rental
How long self storage is rented, of course, affects the prices.
The longer the stay, the more it costs the customer. However, to secure longer term bookings up front you might decide to offer an incentive, which will bring down the cost per sqft, but when you factor in avoided vacant periods actually gives you a greater overall yield.
There is typically a minimum length of time for rental, such as 7-30 days. However, there are some places that don’t have any.
There are also deals some companies offer as an introductory discount. This can span for a specific time period, such as 8 weeks or so.
It is best practice to ensure that clients take out insurance when using self storage.
This insurance will cover if anything were to happen to the goods stored, such as damage. It is important to make sure they insure for an adequate value of coverage, and that they continue to review this value as their storage items change.
You could upsell insurance to the customer, or include it in your rental costs. Alternatively if you’re not at that stage yet, you could just ask the customer to provide you with proof of insurance.
In times gone by, storage operators have been able to make a healthy profit on insurance; take note though, as of April 2023, some significant changes have been introduced which more tightly regulate how insurance, and indeed even the contractual definition of “insurance”, can be sold.
Stay tuned for our update on industry insurance changes featured soon.
Additional features offered
Some additional features are also offered by self storage companies that can impact the cost. This can include a variety of things, such as:
● Climate control
● Extra security
● Moving supplies
● 24/7 access
Types of self storage units
The types of self storage that are on offer can also impact their cost.
Some main ones to consider are:
● Storage warehouse
Longer term storage in stackable 250cuft wooden crates, in larger warehouses, can mean that you can offer storage at a lower price than your typical facility with level access by the client. It’s “horses for courses” from a customer perspective though, as this type of storage won’t suit everyone. It is arguably best suited to out-of-town warehouses, where visibility and accessibility of passing customer is less of a factor.
● Containers – External Storage
Containers are often shipping container type drive-up storage held in compounds. They are portable, and sites are generally cheaper to acquire and build out than indoor storage. They also have the advantage of being able to expand incrementally, as your demand grows – meaning you can manage your capital expenditure. sqft for sqft containers typically command a lower cost than indoor self storage, however, when you factor in the expense of the site set up and infrastructure, they have the potential to offer comparable if not better yields.
● Indoor storage
This is the most established market sector in the UK self storage industry – and for many years was the only area that even called itself “self storage”. These are typically existing or new warehouse type buildings, divided into floors with corridors and self storage rooms set off them – essentially like a hotel, but for storing things, not people passing by !
For the customer they often have the benefit of being able to unload undercover in a loading bay and can typically lend trolleys to wheel their items to their “room”. All this infrastructure and comfort comes at a cost though, in terms of on-site management (or alternatively automation systems), services, and the build/land costs itself of course. Customers however seem happy to just pay for the space they need, in a familiar environment, and given the nature of the offer – they typically are centrally positioned for example in city centres so are for arguably more convenient. All in all, therefore they tend to command a higher price per sqft.
The average cost of self storage in the UK 2022
The average cost of self storage per sqft. in the UK is £27.19 exc VAT, per annum.
This is based on industry data which is generally more representative of larger more established storage operators however, so the landscape could look quite different if a representative cross section of regional independent storage operators were surveyed.
Let’s take a look at each region.
It’s worth noting that London has considerably higher costs than the rest of the UK. This is to be expected due to the high demand and high cost of land.
Disposable income is generally higher in London as well, which makes these prices more affordable for those accessing self storage in the area.
The figures below exclude VAT.
*Data taken from the UK Self Storage Association Annual Report 2023. Note, the latest stats available have data taken from 2022.
A comparison of the average cost of self storage in the UK 2022 vs 2021
It’s helpful to compare the costs to the previous year (2021) to see the changes.
For almost all regions, the cost has increased. However, South West England is the exception, having decreased by £1.01 pence. The East of England saw the greatest increase of 23%.
It’s unsurprising that costs for self storage have increased. The cost of living has increased with high inflation.
Costs also vary depending on a whole variety of factors, including size, type, location, duration of rental, insurance, and any other additional features – and quite frankly you can’t beat local knowledge and market research in this respect, particularly for more regional independent storage operators.
The biggest differing factor for the client will be the location, (which to some degree will also determine the type), which is also the one thing that is pretty much out of their control. Cities have higher costs, with London being the most expensive.
Knowing the overall landscape of costs is important for your self storage company; you can make sure you are pricing appropriately and get an understanding of the industry trends.
How much does it cost to rent a storage space UK?
This varies greatly depending on the size, type and location of the self storage facility. The average cost per sq. ft. in the UK is £27.19.
Is a 10x10 storage unit enough?
This is the size of 100 square feet. This is equivalent to the size of a large bedroom or a single garage. If you are wanting to store a few pieces of furniture and other personal items this will be enough. You will be able to include two large beds, couches, cabinets, tables, and more. Generally, the industry advise this should be suitable for a small-medium 2 bed house move.
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