Self storage doing well despite introduction of VAT

Jul 23 | 2014

The UK self storage industry has shown renewed optimism about trading prospects according to new research released in May.

The latest Self Storage Association UK survey, produced by Deloitte Real Estate, shows the industry has fared better than many expected. Despite the introduction of VAT on rents for storage the total turnover was £385m in 2013, and 79% of operators indicate they expect to see an improvement in profits over the year ahead.

The survey shows average occupancy levels have risen three percentage points to 71% over 12 months. With little new space opening in 2013, operators have concentrated on building up occupancy within their existing facilities. With demand increasing, there is now an appetite to expand portfolios among operators, although generally this new space will be outside the more mature London market.

Rennie Schafer, CEO of the Self Storage Association UK said, “Figures are encouraging as operators are seeing increased occupancy although this has been offset by slightly lower income levels. Considering that 20% VAT was applied to the rent of self storage units 18 months ago the industry has shown remarkable resilience. Life-changing moments like moving home and starting families do not stop during a recession, and this contributes to the 60% of space that is rented by the private customer.”

In addition, the report uses exclusive YouGov plc survey data of over 2,000 UK adults. This data shows that public understanding of self storage and overall usage is quite low.  Only 3% of surveyed people are currently using self storage, but 8% of people are considering using it which shows there is lots of potential growth for the industry.


Photo: Rennie Schafer