StorHub's group director of operations, Luigi La Tona, adds that in addition to rising awareness, increased interest in various activities, including hobbies is also a factor – as are changes in circumstances.
He noted that during the COVID-19 pandemic, confined in their homes, people realised the need to store belongings elsewhere due to the limited space (at home). The JLL-SSAA survey noted that the pandemic forced homeowners to transform traditional living quarters into multi-purpose living spaces to support the work-from-home (WFH) trend.
La Tona acknowledged that self storage is a product of consumerism as opposed to purely the scarcity of space. He noted that in places like the United States and Australia, spacious homes, yards and garages have not limited the self storage market.
The JLL-SSAA report also noted the underlying demographic trends driving such demand rest on key areas including rapid urbanisation, housing affordability challenges and a growing rental population.
The challenge of tapping the opportunity
In highly developed markets like Singapore and Hong Kong, the availability of space from which to build a self storage business presents some interesting challenges to would-be operators. La Tona revealed that operators are bound by zoning and types of buildings.
This godown or industrial building in Cheung Sha Wan, Lai Chi Kok is one of StorHub's facilities in Hong Kong.
“In Hong Kong, you have to be in a “godown” building. In Singapore, self storage has to be in industrial buildings,” he added. He acknowledged that following an incident in 2016, tech and regulations came into place in Hong Kong, which resulted in more stringent regulations and safety requirements for self storage operators, including height restrictions on of ceilings and windows.
He confided that as an operator, the natural inclination is to locate facilities that have high visibility, traffic and accessibility. However, due to zoning restrictions, finding such spaces, especially in urban areas, is becoming increasingly scarce. He admitted that with industrial estates located in the heart of the city, Hong Kong may be an exception.
Technology lends a hand
Outside of regulations involving fire safety, security and privacy, there may not be much in terms of innovation that could be applied to create differentiation. La Tona begged to differ.
In Singapore, he elaborated, StorHub is one of the first providers to offer an online portal for customers to book and roll it throughout Asia Pacific, which is less mature in the US/ Europe – slowly proliferating around the region.
“StorHub provides service in the store. We have people in store also, other than Japan, to help you during working hours,” he continued. Off-hours, customers can book online to visit their storage unit.
Notice labels at StorHub's Cheung Sha Wan self storage facility.
“Roaming security and special HD cameras to see all the units (in Singapore). Centralised security will track the facilities using AI monitoring. Unusual activities will be flagged, and alerts sent to the right people on their mobile phones,” added La Tona.
La Tona concedes that there remains the challenge of sustaining a self storage operation. “Planning our units accordingly is crucial. Shifts in customer demand/behaviour require us to respond swiftly,” he explained.
Luigi La Tona
“This adaptive process has been applied across various jurisdictions and sizes, involving identifying spaces with higher demand and adjusting the mix accordingly.”
Luigi La Tona
Concerning protecting the security and privacy of customers, he explained that: “People like self storage because it is a private space, hence, no cameras inside. We have cameras down every aisle to ensure a secure, safe environment,” he continued.
The quest to innovate an old practice
As a business, self storage has been around since the late 1800s with examples like Bekin Van Lines. Modernisation followed suit in the mid-20th century with facilities that offered individual garage-style units for monthly rental.
Concrete buildings may allow for facilities to be built high and wide, but the operating environment presents challenges. In Hong Kong, for instance, buildings consume more than 90% of the SAR’s electricity. In commercial and industrial buildings, more than 50% of the energy is used to provide central air conditioning.
A similar condition exists in Singapore where it is estimated that the building sector, including residential and non-residential) consume half of the country’s electricity.
La Tona says in Singapore, the company has installed solar panels at 18 of its locations to save on energy costs. “In Singapore, a green roof has been introduced, contributing to cost savings by reducing the building's heat absorption and subsequently optimizing energy efficiencies – reducing air conditioner usage,” he elaborated.
Capturing the market opportunity
Rising affluence and the WFH trend have further fuelled the demand for self storage facilities. In addition, with more people seeking to declutter their homes and create dedicated workspaces, the need for temporary or long-term storage solutions will continue to rise.
These factors have opened up new avenues for self storage operators to cater to a diverse range of clientele, from individuals to businesses.
La Tona agrees and opines that despite what is a return to post-pandemic normal, the realisation around limited home and office space coupled is resulting in “a continued influx of customers to self storage facilities.”
JLL Research suggests that the fragmented nature of the self storage market in Asia presents opportunities for consolidation and expansion. Institutional investors and private equity firms are taking notice of the sector's potential, with transactions reaching unprecedented levels.
By acquiring existing facilities or developing new ones, these investors can capitalise on the growing demand and potentially achieve higher yields compared to traditional real estate investments.
StorHub customers have the convenience to buy additional items for storing their property.
“We are seeing continued growth in multiple countries; we prioritise meeting customer demands. Whether it's enhancing online portals for convenient access or adjusting unit mix based on customer needs, we are committed to evolving and better serving our customers,” concluded La Tona.
Allan is Group Editor-in-Chief for CXOCIETY writing for FutureIoT, FutureCIO and FutureCFO. He supports content marketing engagements for CXOCIETY clients, as well as moderates senior-level discussions and speaks at events.
Previous Roles
He served as Group Editor-in-Chief for Questex Asia concurrent to the Regional Content and Strategy Director role.
He was the Director of Technology Practice at Hill+Knowlton in Hong Kong and Director of Client Services at EBA Communications.
He also served as Marketing Director for Asia at Hitachi Data Systems and served as Country Sales Manager for HDS’ Philippine. Other sales roles include Encore Computer and First International Computer.
He was a Senior Industry Analyst at Dataquest (Gartner Group) covering IT Professional Services for Asia-Pacific.
He moved to Hong Kong as a Network Specialist and later MIS Manager at Imagineering/Tech Pacific.
He holds a Bachelor of Science in Electronics and Communications Engineering degree and is a certified PICK programmer.
