We recently published the UK Self Storage Annual Report, in partnership with the Self Storage AssociationExternal Link. The report paints a positive picture across the sector, with rental returns up 4% y-o-y, stable sector-wide occupancy at around 83%, and around 2 million sq ft of occupational take up over the course of 2022. From a repurposing perspective, the sector also represents an innovative potential solution to transform and capture value from underperforming, vacant and obsolete assets.
Repurposing not only offers a cost-effective solution for expanding operational footprint for Self Storage operators but also contributes to sustainable development and ESG objectives by utilising an existing structure and retaining the embodied carbon within. This is true of both solus Self Storage facilities as well as those sitting alongside other uses to form an integrated, mixed use development:
CASE STUDY: 53-57 Sutton Road, Southend on Sea
- We recently advised on the sale of a grade II listed former industrial bakery, with planning consent to repurpose as Self Storage use in Southend.
- The consent incorporated 35,000 sq ft of Self Storage with 24/7 access, directly adjacent to residential and retail uses.
Self Storage facilities tend to thrive in areas with high population density and strong market demand, and proximity to residential areas, commercial districts, or transportation hubs are all key factors influencing the success of a facility.
Buildings such as warehouses, larger retail units, out of town offices and other commercial spaces tend to lend themselves well to Self Storage, and often have the basic infrastructure in place, including electrical systems, plumbing, and security.
Challenges & Considerations When Repurposing For Self Storage
Repurposing for Self Storage does come with its own set of challenges. The design and layout of the original structure are unlikely to align perfectly with the requirements of a Self Storage facility, and interventions are usually necessary to create the appropriate unit sizes, install appropriate security measures, and ensure easy accessibility for customers.
These can range from adding partition walls, installing and upgrading HVAC systems, or even constructing mezzanine floors within a building to maximise the available space. All of these come with cost implications, which have faced the same inflationary challenges as the rest of the construction industry over the last 12 months. Whilst inflation has eased significantly, with the CPI at 3.8% as of February 2024, there is still significant pressure on viability margins for repurposing and redevelopment opportunities.
What Makes A Property Suitable For Repurposing To Self Storage?
| GENERAL | RETAIL | INDUSTRIAL | OFFICES |
| Single or multi-storey buildings Freehold preferred Leasehold of 30 years+ considered Minimum of 14,000 sq ft up to 100,000 sq ft+ 10+ car parking spaces Minimum site area of 0.7 acres Minimum floor to ceiling height of 2.9 metres Minimum floor loading 5kn/sqm |
Stand alone or retail park properties All forms of showrooms considered Space for secure yard with loading areas High eaves height preferred to accommodate mezzanine floors Near foot traffic or roadside location Retail parks and shopping centres Unused plant areas and warehousing space within retail parks |
Secure yard Loading door access High eaves height preferred to accommodate mezzanine floors Traditional construction / steel frame Roadside presence Historic or modern stock Former manufacturing facilities High office content considered. |
Space for secure yard with loading areas Roadside locations and out of town Town centre office blocks Lower levels and service areas of high rise |
In summary, repurposing obsolete buildings in strategic locations can help Self Storage operators build market share, while allowing asset owners to capture value and future proof income via an alternative, growing sector.
This is not, however, without challenges, and conducting thorough market analysis, architectural feasibilities, cost, viability and planning due diligence is essential prior to executing a repurposing strategy.
Get in touch if you have any questions on capturing value via Repurposing, Self Storage and alternative uses.
