SELF-STORAGE: A SPACE SOLUTION

SELF-STORAGE: COLLIERS INTERNATIONAL A SPACE SOLUTION WHITE PAPER WHITE PAPER SEPTEMBER 2011 With space constraints and the rising cost of homes and increasingly more people are the space they occupy and are turning to self-storage for solutions SEPTEMBER 2011 SELF-STORAGE: A SPACE SOLUTION Increasingly more people are turning to self-storage for space solutions space in Singapore. The self-storage model, while at its early stage of secure storage alternative for users. turning to self-storage for solutions in de-cluttering, organising and managing their treasured paraphernalia like furniture, wine, equipment and documents. Given the new but growing market for self-storage space in Singapore, this research paper was undertaken in collaboration with Lock + Store Self Storage (Lock + Store) 1 to provide the public with a better understanding of the self-storage concept and its relevance as a space solution in Singapore. WWW.COLLIERS.COM/SINGAPORE P. 1

Self-storage or self-service storage, is essentially a Do- It-Yourself storage concept where users fully manage their leased self-storage space and stored items. It allows users to lease storage space where they can keep goods and belongings in specialised facilities. Users of self-storage facilities are given more choices and control by which they are able to decide what, where, when, how and for how long they store their possessions compared to conventional warehouses. WHAT IS SELF-STORAGE? Self-storage or self-service storage, is essentially a Do-It-Yourself storage concept where users fully manage their leased self-storage space and stored items. It allows users to lease storage space where they can keep goods and belongings in specialised facilities. Users of self-storage facilities are given more choices and control by which they are able to decide what, where, when, how and for how long they store their possessions compared to conventional warehouses. This is possible because the lease terms of self-storage spaces start at a minimum of two weeks and can be renewed monthly or annually whereas users of conventional warehouses are typically required to lock in leases for two to three years. The self-storage space is generally fully-enclosed and can vary in size according to the 3 and U-Store@SG large storage units of up to 530 sq ft capable of holding huge business archives or the complete contents of a house. facility operators may amalgamate units, most of which come with heights ranging between Most self-storage operators provide 24-hour access for all users/customers at their facilities the following personalised means of entry: Key card Digital pin number access As operators are by and large not legally accountable for items stored in self-storage facilities, storage units, in addition to the range of security features provided by the operator. such as advisory service to assist users in assessing the amount of space required. Another 3, a storage subdivision run by the Singapore Post, which capitalised on their logistics strengths to provide selectable moving services to facilitate the WWW.COLLIERS.COM/SINGAPORE P. 2

self-storage facilities can accommodate a wide range of items ranging from personal and household items to business products and documents. movement of goods for the customer. Lock + Store also introduced an integrated three-in-one Meanwhile, other ancillary services made available by operators include pest control and customers. as the local self-storage industry develops and evolves over time, the suite of services changing needs of customers and niche user groups. WHAT CAN BE STORED IN A SELF-STORAGE FACILITY? Generally, self-storage facilities can accommodate a wide range of items ranging from items and furniture to business products and documents. However, as the local self-storage industry develops and evolves over time, the suite of customers and niche user groups. kept at a constant temperature of between 23 O O anything from precious collections of antiques and paintings, to equipment and musical instruments. cater to the special requirements of wine collectors and wine dealers where a controlled internal environment is maintained, i.e. a constant temperature of 13 O wine-storage cellars. storage behaviour still centres largely on storing personal and household items. Lock + Store carried out a survey 2 survey ) and found that the majority of their customers stored clothing, shoes and other Arts, crafts and other hobby/interest-related items collected and stored by users currently constitute 3% of items stored at their facilities. WWW.COLLIERS.COM/SINGAPORE P. 3

Today, there are about eight self-storage operators with over 20 self-storage facilities sq ft of net leasable space in Singapore Breakdown of Items Stored 2% y 3% 9% Wine 3% r Household Items 29% s 5% To provide greater convenience and accessibility for the self-storage facilities are often set up near densely populated residential areas or commercialised areas as well as close to MRT stations and s 7% Archives/Documents/Files 8% Furniture 16% 18% WHERE ARE THESE SELF-STORAGE FACILITIES LOCATED? sq ft of net leasable space in Singapore as listed in Table 1. can be found in the Northern and Western Regions of Singapore (please see Map 1). facilities are often set up near densely populated residential areas or commercialised areas as WWW.COLLIERS.COM/SINGAPORE P. 4

SELF-STORAGE: A SPACE SOLUTION WHITE PAPER SEPTEMBER 2011 Map 1 4 5 21 6 2 19 3 9 8 18 14 10 17 12 1 16 15 7 20 11 13 TABLE 1 : LIST OF SELECTED SELF-STORAGE SPACE IN SINGAPORE No. Building Name Operator Location Range of Sizes of Space (sq ft) Term of Lease 1 37 Tampines Street 92 20-200 2 111 Defu Lane 10 20-200 20-200 20-200 3 4 14 Woodlands Loop 14 Woodlands Loop 5 Markono Districentre 50 Tagore Lane 11-135 6 14-300 Minimum 14 days 7 14-300 Minimum 14 days 8 14-300 Minimum 14 days 9 14-300 Minimum 14 days 10 14-300 Minimum 14 days 15-200 11 1100 Lower Delta Road 12 16-300 13 Tanjong Pagar Distripark Lock+Store 37 Keppel Road 11-200 14 Hersing Hub Storhub 743 Lorong 5 Toa Payoh 12-530 12-530 15 Lock+Store Storhub WWW.COLLIERS.COM/SINGAPORE P. 5

TABLE 1 : LIST OF SELECTED SELF-STORAGE SPACE IN SINGAPORE No. Building Name Operator Location Range of Sizes of Space (sq ft) Term of Lease 16 Storhub 12-530 17 Storhub Kallang Storhub 160 Kallang Way 12-530 18 Storhub Toa Payoh Storhub 615 Lorong 4 Toa Payoh 12-530 19 23 Tampines Street 92 Storhub 23 Tampines Street 92 8-530 20 Singapore Post Ayer Rajah S 3 Singpost 9-406 21 U-Store@SG 25 Tagore Lane 10-390 location and ease of access as very important considerations in selecting their choice of self- who responded to the survey visit their self-storage facilities more than once a month. In fact, 5% of the respondents visit their storage facilities on a daily basis. Frequency of Visits Yearly As necessary 1% 4% 1% Daily 5% Quarterly 9% Weekly 16% 15% Fortnightly 16% Monthly 33% WWW.COLLIERS.COM/SINGAPORE P. 6

The cost of using self-storage space typically depends on the brand name of the operator; ancillary services as well as the location of the facility. HOW MUCH DOES SELF-STORAGE COST? The cost of using self-storage space typically depends on the brand name of the operator; the services like specialised packing service and moving services; as well as the location of the facility. that the cost for regular, non-air-conditioned self-storage units range from $40 per month for a 9 sq ft locker to about $1,200 per month for a 390 sq ft unit. TABLE 2 : ESTIMATED COST OF USING SELF-STORAGE SPACE IN SINGAPORE Range of Sizes of Units (sq ft) Estimated Range of Cost (S$ per month) 9-50 40-360 51-100 190-470 101-200 540-950 201-400 800-1,200 > 400 > 1,200 WHO USES SELF-STORAGE SPACE? Users of self-storage space encompass a cross-section of individuals and businesses. owners in various industries. A small 2% were hobbyists. However, Lock + Store observed that they are a growing group. collectables such as artwork, limited edition toys and wines which generally require storage space. The need for storage space is further compounded by the developing trend towards WWW.COLLIERS.COM/SINGAPORE P. 7

with shrinking apartment sizes, households are also increasingly looking to selfstorage facilities to keep their treasured possessions Breakdown of Users of Self Storage Space Hobbyist 2% ) 4% 18% (New Start-up) 6% Individuals 68% ) 2% has seen some 19% of its survey respondents using its self-storage facilities because they are moving from a big house to a smaller unit and so they need a place to store their belongings. According to Lock + Store, with shrinking apartment sizes, households are also increasingly looking to self-storage facilities to keep their treasured possessions. Not used to the minimalist concept of less is more, Singaporeans continue to be fond of purchases and keeping their prized acquisitions. Interestingly, Lock + Store have encountered a number of men looking for storage space as their wives can no longer put up with their auto parts collections at home. An increasing number of individuals are also using self-storage space as a temporary storage belongings while they are away for assignments. Lock + Store has 9% of its users who belongings, 5% who said that there is not enough space at home and 3% who stated for renovation purposes, as reasons for using a self-storage facility. WWW.COLLIERS.COM/SINGAPORE P. 8

rising occupancy costs of business space has led to them increasingly turning to self-storage space to optimise not being tied down to long and cumbersome leases. Reasons for Using Self Storage g a c b d e f 0% 5% 10%1 15% 20%2 25% 30%3 35% Notes: Notes: c. c. Moving Moving from from a big a big house house to a to smaller a smaller unit unit so so I need I need a place a place to store store my my belongings belongings s e. I travel a lot for work sometimes on short or long-term intervals. It makes more sense to store my e. I travel a lot for work sometimes on short or long-term intervals. It makes more sense to store my f. A new addition to the family means we need to clear room for baby f. A new addition to the family means we need to clear room for baby From the business/corporate perspective, rising occupancy costs of business space has led to while not being tied down to long and cumbersome leases. requirements, depending on their business needs are also turning to self-storage to warehouse their products/inventories. Moreover, new start-ups/entrepreneurs are using self-storage space as a warehousing option for their inventories as a means of lowering initial overhead costs. needed just a small space to store their products. WWW.COLLIERS.COM/SINGAPORE P. 9

... the cost/price and location of self-storage facilities seem to be ranked highly among those who are looking for space. showed that the attributes of self-storage facilities that garnered the highest percentage of respondents are Price (45%) and Location of Facilities (37%). WHAT ARE USERS KEY CONSIDERATIONS IN SELECTING A SELF-STORAGE FACILITY? self-storage facilities seem to be ranked highly among those who are looking for space. Similar to other types of properties, these are also important considerations of space occupants. (45%) and Location of Facilities (37%). Important votes ranging from 27% to 36%. lower levels of importance. Importance of Attributes Price Location of Facility Security Referred Partners Availablity of Accessories 0% 10%2 20% 30%4 40% 50%6 60% 70%8 80% 90%1 100% Least Important Slightly Important Average Moderately Important WWW.COLLIERS.COM/SINGAPORE P. 10

Land scarcity in Singapore, coupled with a growing population and vibrant business environment will continue to drive demand for self-storage space.... Singaporeans are increasingly acquiring less conventional hobbies that require added storage space. This will contribute to the demand for self-storage space. capping occupancy costs of business space remains a relevant and important consideration for businesses/ companies to ensure cost- during times of increasing rental costs. This will continue to create demand for selfstorage space. WHAT ARE THE GROWTH PROSPECTS FOR THE SELF-STORAGE INDUSTRY? Land scarcity in Singapore, coupled with a growing population and vibrant business environment will continue to drive demand for self-storage space. This will be further supported by the growing fad of Mickey Mouse homes (i.e. residential units that are less than 500 sq ft) which may also create new demand for self-storage space as households look outside of their homes for additional storage space. Additionally, Singaporeans are increasingly acquiring less conventional hobbies such as arts and crafts collections, wine appreciation and mountain-biking that require added storage space. This will contribute to the demand for self-storage space. Moreover, capping occupancy costs of business space remains a relevant and important during times of increasing rental costs. This will continue to create demand for self-storage space. storage facilities to keep operational costs low. This trend looks set to continue as the Singapore government continues to create favourable conditions for entrepreneurship. Intention to Increase Usage of Storage Space in next 6 months Maybe 0% Yes 9% Intention to Increase Usage of Storage Space in next 12 months Maybe 2% Yes 9% No 91% No 89% WWW.COLLIERS.COM/SINGAPORE P. 11

months, which bodes well for the industry. The poll also showed that some of the self-storage AUTHORS: Michelle Tee EMAIL michelle.tee@colliers.com EMAIL eliza.lee@colliers.com COLLIERS INTERNATIONAL CONSULTANCY & VALUATION (SINGAPORE) PTE LTD Singapore 048616 TEL +65 6223 2323 FAX +65 6222 4901 This report and other research materials may be found on our website at www.colliers.com. Questions related to information herein should be directed to the Research Department at the number indicated above. This document has advertising and general information only. representations or warranties of any kind, including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to or implied terms, conditions and warranties liability for loss and damages arising there from. This publication is the copyrighted property of 2011. All rights reserved. market is evident from the steady entrance of new players into the self-storage scene, the to manage the Storhub brand of self-storage facilities in Singapore, has announced in 2010 its intention to grow its new business in self-storage and double the Storhub portfolio of another 38,000 sq ft in September 2011. CONCLUSIONS The advent of the self-storage space model has stemmed mainly from the needs of control over the management of space and storage of items. Although the local self-storage space model is still in its nascent stage of development with conventional warehouse space. The emergence of new and increased numbers of industry players makes it imperative for self-storage operators to constantly adapt and develop innovative self-storage concepts to market potential of the industry in Singapore. Acknowledgement: opinions on the self-storage market in Singapore. 1 opened in Tanjong Pagar DistriPark in 2005. 2 Lock + Store carried out a survey of its 303 existing self-storage users from its facilities in Chai Chee and Tanjong Pagar from July - August 2011. The aim of Singapore. WWW.COLLIERS.COM/SINGAPORE P. 12