The self-storage market involves storage facilities that offer small, private spaces where individuals or businesses can store their belongings. Self-storage facilities are typically secure, with controlled access, varied unit sizes, and affordable rental rates making them an ideal solution for both residential and commercial storage needs. The global demand for self-storage is growing owing to factors such as changing demographics, smaller household sizes, increased mobility, and urbanization.
The global self-storage market is estimated to be valued at US$ 55843 million in 2023 and is expected to exhibit a CAGR of 6.9% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Rising construction of new self-storage facilities across major cities is expected to provide significant growth opportunities in the market. According to the Self-Storage Association, over 200+ storage facilities are opened annually in the United States alone, driven by the growing consumer requirements. Constructing new facilities allows operators to better serve the market by providing more options across broader coverage areas to both existing and new customers. Governments are also liberalizing policies to encourage private investment in developing self-storage infrastructure to meet increasing demand. This rising construction of new self-storage facilities will propel the growth of the global self-storage market during the forecast period.
Porter's Analysis
Threat of new entrants: The self-storage market size has moderate threat of new entrants due to high initial capital required for building storage facilities. However, positive industry growth and fragmentation provides opportunities for new players.
Bargaining power of buyers: The bargaining power of buyers is moderate as self-storage services have no product differentiation. However, customized space sizes and additional value-added services increase switching costs.
Bargaining power of suppliers: The bargaining power of suppliers is low given the fragmented nature of suppliers and availability of substitutes. However, land for facility development is concentration among few suppliers exerting pricing pressure.
Threat of new substitutes: Threat of substitutes is low as self-storage offers flexibility over alternatives. However, digitalization enables online file storage substituting physical storage.
Competitive rivalry: The market has high competitive rivalry due to fragmentation and location-based competitive advantages. Pricing wars and facility expansion are common in this highly competitive market.
SWOT Analysis
Strength: Growing demand for flexibility and storage accessibility, tax benefits for real estate investment, and additional value-added services.
Weakness: High initial investment and dependence on occupancy rates, vulnerable to economic slowdown, and negative perception of storing unused items.
Opportunity: Increase in secondary city demand, growth of urban households and nuclear families, and organizational downsizing leading to decluttering.
Threats: Risk of liability claims, natural disasters destroying stored items, and digital disruption reducing need for physical storage.
Key Takeaways
The global self-storage market is expected to witness high growth. The global self-storage market is estimated to be valued at US$ 55843 million in 2023 and is expected to exhibit a CAGR of 6.9% over the forecast period 2023-2030.
The United States dominates the self-storage market currently with a share of over 60%. Presence of stringent foreclosure laws and real estate investment culture driving storage facility investment.
The Asia Pacific region is forecasted to grow at the fastest pace during the forecast period. Increasing disposable incomes, urbanization, and small living spaces increasing reliance on external storage units. Countries like China, Japan and India expected to fuel future growth.
Key players operating in the self-storage market are Public Storage, Extra Space Storage, CubeSmart, Life Storage Inc., and Security Public Storage. These players have strong presence across major countries and focus on acquisitions to expand geographic footprint and service offerings like truck rental and packing/unpacking products.
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