How self storage is bedding in with mixed-use developments
Self storage facilities are no longer the preserve of industrial estates as more open in vacant retail units and are included in residential developments.
Self storage facilities are becoming a part of mixed-use developments as changing living patterns and rising levels of urbanisation drive consumer demand for space in convenient locations.
Traditionally, self storage facilities were located on city outskirts or industrial parks. Now, operators are looking to get closer to consumers, offering small sized facilities in densely-populated urban areas, or building much larger stores in high value locations.
“There’s growing demand for self storage as more people move into cities and living spaces get smaller,” says Ollie Saunders, lead director of JLL Alternatives. “At the same time, we’re seeing less urban land available for development.”
As such, self storage facilities are starting to appear alongside residential, retail and offices in newly redeveloped or recently approved mixed-use schemes.
In London, Big Yellow Group plans to extend its Battersea facility into a mixed-use scheme featuring self storage, housing, retail and office space while in Oldham, a former mill is being converted into self storage, office, business and events space. Schemes are also afoot in other UK cities including Bristol and Brighton and Hove.
For now, the move to incorporate self storage is largely happening during redevelopment although some new schemes are also seeing its potential.
Access, for example, has received planning consent for 90,000 square feet of self storage space with 63 build to rent homes above. It’s also seeking planning permission for another five London sites totaling over 1,000 homes and 475,000 square foot of self storage.
“Combining self storage with a mixed-use scheme lowers development costs and maximise the use of land,” says Saunders. “This can open up previously out-of-reach opportunities for self storage in major metropolitan areas where land prices are at a premium.”
Taking empty retail space
A growing number of empty retail units across the UK is also providing opportunities for the growing self storage sector.
“Empty retail space has emerged, particularly in the UK, leaving many retail landlords scratching their heads on how best to preserve rental income,” says Saunders.
Accommodating self storage stores at the rear of shopping centres or in place of redundant retail car parks is relatively straightforward: “From a practical perspective, self storage facilities are becoming increasingly digital, meaning minimal staffing and management,” Saunders says. “More generally, there’s also less resistance to the idea of blending uses nowadays.”
In Berlin, for example, the self storage and fast-food sectors have come together, with operator MyPlace joined by an adjacent KFC. In the UK, Starbucks Drive-Thru and operator StorageGiant are similarly positioned in Cardiff and Bristol.
“Fast-food outlets are generally in convenient locations and have a steady stream of visitors for much of the day, which makes them a place to keep goods safe and secure,” says Saunders.
A growing sector
Europe’s self storage sector has grown rapidly over the past decade to reach 4,290 facilities providing almost 10 million square feet of storage space, with the UK the largest market.
However, rising demand leaves plenty of room for more growth. A recent study by the Federation of European Self Storage Associations (FEDESSA) and JLL estimates that there are just nine self storage stores per million inhabitants in Europe, compared to more than 160 in the U.S.
Coupled with structural changes in the retail and office markets, the self storage facilities of the future will be less isolated than in previous years, Saunders believes. Existing failing retail facilities, for example, could be converted into flexible space for the office and self storage sectors with a small retail offering on the side.
In some cases, self storage could even become an anchor tenant of future mixed-use developments in established markets such as the UK and Germany, Saunders adds.
“There’s a convenient matching of demand for space right now from self storage operators with landlords who need to find tenants,” he concludes. “There’s certainly greater cooperation between previously siloed sectors and we’ll see the growth of mixed-use developments open up more opportunities for self storage.”