Storage wars – the latest emergent trend

Storage wars – the latest emergent trend

PREMIUM REAL ESTATE: Numerous factors including changing building trends and the growing prevalence of downsizing have precipitated the growing demand for conveniently situated storage units like this brand new facility in Stellenbosch, where prices start at R90 000.

The demand for self-storage space has grown exponentially in recent years, with most of the conveniently situated facilities already full and it’s becoming increasingly difficult to find units to rent in most towns and cities around South Africa, especially at short notice.

Chris Cilliers, chief executive and principal for Lew Geffen Sotheby’s International Realty in the Winelands, says that the shortage persists despite a number of new facilities becoming available in the area.

“We recently listed units in a brand new facility and they are rapidly selling out – the smaller ground floor single garage size units have already been snapped up and the larger units suitable for personal and business use are selling quickly.”

Cilliers attributes the growing demand to a number of factors and emergent trends.

“The growing shortage of development land in densely populated areas and cities in particular, has resulted in changing housing trends with more compact homes being built and smaller homes usually have less storage space and only one garage.

“Another contributing factor is the inevitable downscaling of residential accommodation resulting from the economic crunch as well as increased downsizing by empty nesters who want to enjoy the freedom of low-maintenance homes once the kids have left home.

“There are also more families moving to different parts of South Africa these days who often need to store their belongings until they buy or rent a home and, as renovation rather than moving house is becoming more common, people often need to store their household goods while remodelling.”

Unlike new residential developments which require large tracts of vacant land, there are still ample suitable locations in the Winelands and many other towns and metros that can easily be converted to storage facilities.

“Any industrial or commercial areas close to town centres are ideal for such properties and in more built up locations, old office blocks and commercial buildings are being converted,” says Cilliers, adding that the key issue is to have parking and loading facilities and the ability to include large goods lifts.

According to lead auctioneer and director of The High Street Auction Company, Joff van Reenen, they have seen a significant increase in demand for such properties, with bidding for these lots best described as fast and furious.

“Stock is scarce, especially in densely populated areas and, although they are building a lot of these facilities in Johannesburg now, when they do come onto the market – old or new – they get snapped up quickly.

“We are finding that demand is greatest in CBDs and the high-density higher LSM residential markets where people can afford to pay for storage of goods they don’t often use. In fact, even residential garages are increasingly sought after to buy and to rent.”

And in a property market that has been in the doldrums for some time, this is one sector that offers prospective investors a promising return.

“If a storage unit is in a well-positioned area it can be a very good investment as it’s cheap to maintain with little or no water usage, little electricity required and security the only real priority. It can offer a great rental return with a low expense cost.”

Cilliers concludes that although it’s an emergent trend, it’s growing in popularity as buying even single sectional title storage units is a great, low risk investment with a very good return, especially for investors with limited budgets who can enter the market by buying single units.