New self storage location? First investigate the feasibility!
If you want to set up a new self-storage location, it is wise to first have a high-quality feasibility study carried out. Because, when you are about to invest heavily, that is only a relatively small expense. But very useful to greatly increase the chances of success. What should be in such a report for sure?
What you need to know in advance
The self storage market is booming. Many new providers have been added in recent years and there still seems to be room for further growth. But that does mean that you have to check in advance whether the intended location is still the best place to have success.
Most self storage customers prefer to rent a unit near their home or work address. It is therefore often quite easy to demarcate the catchment area of a new location. For example, more than 85 percent of customers live within 5 kilometres of their chosen storage location. A thorough feasibility study reveals the parameters of that area and those of the potential customers who live or work in it.
Competition
It is crucial to know what is already being offered on the self storage market. The report should include an analysis of the existing locations. Think of numbers of square meters, how long the locations have been around, unit sizes, rates, striking features, occupancy rates, etc. It is also good to know whether there are other projects under construction and whether there are developments that are still in the planning phase.
Demographics
What does the potential customer base look like? What is the average per capita income and per household? Which types of homes are most common? Having this and other important metrics at your disposal makes it easier to determine what storage demand to expect and in what quantities.
Specific question
There are now regions where the total demand for and supply of storage are in balance. But there may still be a need for specific forms of storage. Such as large commercial spaces or storage facilities for specific goods. Think of the explosively growing number of companies that use hubs in cities for home delivery. So there are certainly opportunities there.
In the Netherlands, there is a relationship between the growth of employment in the area of the intended location and the expected need for storage space. The current employment figures for your region can easily be found out via CBS.
Own location
The market research for self storage must of course also pay attention to the desired properties of the own new location, such as accessibility, visibility and the like. We’ll go into that in more detail next time.
Want to know more about what is involved in increasing the chances of success of your intended location? Please contact me.
Jan-Hein Streppel
Source: ISS