Home Property Australia Normalised growth returns to self-storage market

Normalised growth returns to self-storage market

  • July 05, 2023
  • by Property Australia
Cushman & Wakefield Divisional Director of Self Storage Linda Sharkey

 While the self-storage industry experienced staggering annual growth rates of around 15 to 20 per cent in some markets, the revenue growth is now stabilising, although it still surpasses inflation. 

This is according to Cushman & Wakefield’s e Self Storage Performance Indicators (SSPI) series, which tracks the performance of 280 self-storage facilities across major cities in Australia and Auckland. 

Analysing the data, two cities have emerged as frontrunners in terms of revenue growth.

Adelaide, with an exceptional growth rate of 14 per cent in the 12 months leading up to 31 March, 2023, and Sydney, with a commendable growth rate of 12 per cent during the same period, have showcased remarkable resilience and sustained demand for self-storage services.

Additionally, other cities like Perth and Brisbane have also experienced significant annual growth rates, reaching eight per cent.

Melbourne closely follows with a growth rate of seven per cent. Auckland, on the other hand, has displayed steady growth, boasting a rate of five per cent.

Linda Sharkey, Divisional Director of Self Storage at Cushman & Wakefield said “storage loves change”.

“Operators have capitalised on the heightened level of demand for self storage since the onset of the COVID-19 pandemic, with some markets experiencing revenue growth of over 50 per cent in the 36 months leading up to March 2023,” she said. 

Ms Sharkey further noted that in recent times, occupancy levels in certain locations have started to decline.

“This trend raises the possibility that fee rates may have been pushed too aggressively in some markets, potentially leading to a regression in fee rates as these markets strive to retain self storage customers,” she said. 

However, she emphasised the growth journey is far from over and anticipates a slightly bumpier road ahead for the industry.

Perth has had the strongest revenue per available square metre (RevPAM) growth over the 36 months since the SSPI commenced in March 2020, at 79 per cent, followed by Adelaide (52 per cent), Brisbane (47 per cent), Sydney (40 per cent), Melbourne (32 per cent) and Auckland (18 per cent).