Why Are So Many Storage Facilities Being Built? [2024 Guide]

Have you noticed all those storage facilities popping up near you lately? You’re not alone…

Globally, the number of self storage units has exploded over the last decade. The US currently has over 50,000 storage facilities, while Europe accounts for nearly 7,000 stores, with more in the pipeline! So, what’s fueling this storage unit boom? In other words, why are so many storage facilities being built?

In this article, we’ll examine surprising stats that highlight the rapid increase in the number of self storage facilities as well as the factors driving more and more people to rent out storage space. We’ll also explore those features that make storage units a smart investment for developers.

The Growing Need for Storage Globally

The self storage industry is experiencing significant growth, driven by a variety of factors such as urbanization,downsizing, and the increased need for space. A recent study by Storeganise indicates that the global self storage industry is expected to grow at a rate of 4.37%. Another source projects a compound annual growth rate (CAGR) of 7.53% from 2022 to 2027, potentially reaching a market value of $83.6 billion by the end of 2027 .

Despite economic challenges like inflation and rising interest rates that make operating facilities more costly, the industry has shown resilience. Occupancy rates for self-storage units have been strong, averaging 96.5% in Q3 2021, which suggests a sustained demand. Even with financial headwinds, the self storage sales volume surged to nearly $3.4 billion in 2023, underscoring the growing need for self-storage solutions.

What’s Behind This Surge in Storage?

Several trends are driving the increase in the number of storage units being built, including the following:

• Urbanization has led to smaller living spaces, leaving people in need of extra room for their belongings.

• Lifestyle transitions such as downsizing, relocating for work, or managing estate items during life events create a demand for temporary storage solutions.

• The rise of e-commerce and home businesses has also triggered a need for inventory space among entrepreneurs.

• The minimalism trend encourages individuals to declutter their homes, yet they often seek storage units to keep items they aren’t ready to part with.

All signs point to continued growth for storage operators around the globe. As cities become denser, homes shrink in size, and e-commerce expands, the demand for storage should remain strong. The self storage industry is proving to be a stable sector, even in times of market volatility. However, demand is not the only factor driving self storage growth; there are many other key drivers behind this increase.

Key Drivers Behind the Storage Boom

Beyond the evident increase in demand from self storage users, here are a few key reasons why so many storage facilities are being built:

1. Lower Cost of Building

With a surge in innovation, the cost of building a self storage unit has dropped significantly. Thanks to improved construction techniques and materials, developers can build storage properties quickly and cheaply. At the same time, land prices have remained relatively stable in many areas, keeping overall costs low.

2. Self Storage’s Increasing Attractiveness

Secondly, performance improvements in areas like security, access, technology adoption to improve user experience, and climate control have made self storage a more attractive option for both residential and commercial customers. Modern storage facilities offer conveniences like 24-hour access, video surveillance, on-site staff, and temperature regulation, which were rare or non-existent in older storage properties.

The self storage industry is booming thanks to lower costs and better facilities. With demand rising in communities worldwide, self storage is poised to continue its upward trend for years to come, presenting an opportunity for smart developers. Several statistics and projections point to self storage being a profitable industry to invest in.

Storage Industry Growth Stats and Projections

The self storage industry has exploded in recent years. In the US alone, the market is expected to from $44.37 billion to $49.88 billion by 2029, representing a cCAGR of 2.37%. Globally, the market is projected to reach $85.27 billion by 2030, up from $54 billion in 2021.

The key trends driving these growths include the following:

• The global population is increasing: More people mean more stuff, and we all need somewhere to stash these belongings. With the increased cost of living, many young professionals are opting to rent rather than buy, living in apartments and condos with limited space.

• Self storage is profitable: Revenue from self storage rentals and sales is on the rise. Worldwide, self storage market expected to hit $50.58 billion in 2024, with year-over-year growth of 5.49% in the next 4 years. With high demand and significant cash flow potential, self storage has become an appealing real estate investment.

• Technology simplifies the process: Technology is making self storage more convenient and accessible. Web and mobile apps allow self storage business customers to easily compare facilities, check unit availability, rent, and pay online. Self storage operators are using software like Storeganise to streamline operations, improve the customer experience, and maximize profits. Some facilities offer high-tech storage security solutions like keypad gate access, video surveillance, and climate-controlled units.

The self storage industry shows no signs of slowing down, and recent trends explain why there are so many storage facilities. Strong market fundamentals, smart investments in technology, and a growing customer base all point to continued opportunities for self storage owners and investors. The demand for extra space isn’t going away anytime soon. For people and businesses with too much stuff and not enough room, self storage provides an ideal solution.

 

Conclusion

So, why are so many storage facilities being built? This guide has outlined the factors behind this trend, from rising demand to the increasing attractiveness of self storage investment and more. With the need for storage on the rise, now is a great time to venture into self storage business.

However, people are particularly drawn to exceptional services and convenience. Therefore, investors looking to stand out from the competition should equip their units with modern self storage technologies and flow with the latest self storage trends. One important technology that offers convenience for self storage facility owners and renters is the Storeganise management software. Try it out today and give your business a boost!