Over the last decade, South Africa has seen an explosion in the demand for storage services. So what has driven this storage revolution?
Over the last decade, South Africa has seen an explosion in the demand for storage services.
During the 1990s, storage was a niche market, mainly serviced by owners of agricultural land, who rented out garages on otherwise unused land to earn additional income. This model was gradually replicated and made more accessible to people living in cities.
Fast forward to 2014, and the storage landscape looks drastically different. XtraSpace alone has grown from operating a single Gauteng-based storage facility in 2007 to running 24 facilities, covering a total of 100,000 m2 of storage space, across the country.
So what has driven the storage revolution?
A global revolution
The storage industry was born in America. The country’s first dedicated storage facility was established in 1958, and the industry enjoyed moderate but steady growth over the next 40 years.
According to the United States Self Storage Association, it then took just 8 years for the country’s billion square feet of storage space to double. This trend continued into the new millennium, with approximately 3,000 new storage facilities built every year between 2000 and 2005.
The United States is not the only country where the demand for storage has grown rapidly. Industry research by the UK Self Storage Association indicates that 121 new storage facilities have been opened by association members in the UK since 2011.
Meanwhile, the Economist reports that in 2012 alone, the number of storage units in the UK rose by 8%. The number of facilities in Britain has, however, begun to flatten out over the last couple of years.
The same patterns can be found in Australia, which experienced rapid growth in the storage industry during the 1990s. It’s reported that one in four Australians has made use of a storage facility at some point in their lives. During its peak, the Australian storage industry grew at 15% a year, and although this rate has slowed somewhat, growth remains robust.
Global trends and local causes
Industry research across the countries experiencing a boom in the storage industry has identified a number of factors driving the growth of the storage industry.
In the United States, the increasing mobility of the workforce has been an important driver of the need for storage. A large number of American families are moving between cities and states in pursuit of better economic opportunities, and temporary storage facilities are frequently used to hold their home contents while they move. In addition, US military deployments have contributed to the boom, with approximately 6% of all storage units leased to active military personnel.
Retirement of the baby-boomers
The so-called “baby boomer” generation in the West is now in the process of retiring. The baby boomers are recognised as being the most affluent generation in human history, and that affluence resulted in significant consumption and accumulation of personal possessions. With the boomers retiring and many downsizing their properties as they move onto pensions, storage has become the logical choice for accommodating items accumulated over a lifetime.
Increasing divorce rates
In both Australia and the United Kingdom, the increasing divorce rate is believed to have contributed to the demand for personal storage. As families split and separate households are created, storage facilities are often used to store the personal possessions of one of the parties.
Small business use
In the United Kingdom, storage facilities have become popular among small business owners, who use them not just to store stock but as locations for performing distribution-related and administrative tasks.
South Africa and the missing piece of the puzzle
Workforce mobility and the retirement of the boomer generation are likely to have influenced the South African storage boom to some extent. However, annual divorce rates have declined significantly since the late 1990s, and local storage facilities don’t permit clients to use their storage units as administrative offices.
This suggests that other factors may be at play in driving the local demand for storage facilities.
Decreasing house sizes
One last trend unites many of the countries that have experienced storage booms – a decrease in average house sizes.
This trend has been particularly noticeable in the United Kingdom, Australia and South Africa.
For example, the UK Self Storage Industry Association reports that in recent years, the average new house in the United Kingdom has decreased from an 85 m2 unit with 5.2 rooms to a 76 m2 unit with 4.8 rooms. In addition, more people are moving into flats or apartments without garages.
Studies in South Africa indicate even more substantial decreases in new house sizes.
According to the South African Commercial Property News website, land area for houses has been decreasing steadily since the early 1990s. Although average stand size decreased, house sizes actually increased until about 2003, as developers attempted to convert more of each stand into usable living space.
Since 2003, actual house sizes have been decreasing rapidly, with the average size of a new residential property decreasing from 174 m2 in 2003 to 147 m2 by 2006.
For free-standing houses, the average house size has decreased a whopping 43% from 291 m2 in the 1970s to the present average of 166 m2.
Another important trend in South Africa is the move away from free-standing houses towards sectional title flats and townhouses. During the 1980s, nearly 95% of all homes were free-standing houses. Today only 75% of homes fit this category– a dramatic decrease of 20% in just three decades.
South African challenges
The decrease in average South African house size and the move towards sectional title living are being driven by the challenges of population growth, infrastructure limitations and urban land shortages.
These are challenges we’re determined to help South Africans meet, extending our reach to provide secure, affordable and hassle-free storage solutions for both business items and personal possessions.
Self-storage with Xtraspace
All XtraSpace storage facilities are protected through access control, security guards, 24-hour CCTV monitoring and fire safety systems – and once you rent a unit, you can lock it and keep the key.