Connect with us

Property

Self-storage industry in Asia on the rise

High housing prices and small living space should continue to drive personal demand for self-storage, while corporates and e-commerce platforms will likely drive business demand.

Avatar

Published

on

The self-storage industry in Asia is evolving as the notion of storing personal belongings outside the home catches on.

Outside of Japan and Australia, Hong Kong remains the most established Asian market with an estimated 418 facilities, a number that compares closely to China’s total facilities.

However, there is potential for further market growth.

Per capita stock of self-storage facilities in eight logistics markets in Asia (Hong Kong, China, Japan, Taiwan, Singapore, Malaysia, Philippines and Thailand) currently averages less than 0.01 sqm, significantly below the 0.1-0.2 sqm in the U.K. and Australia, and one sqm per capita in the U.S.

Self-storage operators have a potentially very viable product

The average occupancy rate in more established Asian markets as well as the U.S. stood above 80% during 2018, although China, Taiwan and Southeast Asia saw slightly lower levels.

Moreover, a good customer mix (on average 70% personal users and 30% business users in Asia) means that the sector is less susceptible to fluctuations in business cycle as compared with other commercial real estate.

High housing prices and small living space should continue to drive personal demand for self-storage, while corporates and e-commerce platforms will likely drive business demand.

Rents charged by operators to end-users enjoy a good spread over typical industrial rents paid to the landlords in major markets. For example, the average premium is about USD 20 per sqm per month in Singapore and up to USD 50 in Hong Kong.

Investors take a closer look

Investors are taking a closer look at the self-storage sector because of a lack of available products in traditional commercial real estate. In addition, rising asset values has squeezed investment yields in core sectors to record-low.

We estimate alternative investment sectors can often generate rental yields 100-200 basis points higher than traditional real estate assets.

Investment activity in the Asia Pacific self-storage sector has been rising. Transaction volumes between 2015 and 2018 averaged only USD 120 million per year, and were dominated by Australia and New Zealand.

Momentum in investment activity increased in 2019, as CapitaLand divested its interest in self-storage subsidiary StorHub, one of Singapore’s largest self-storage networks, for USD 136 million.

A number of other notable deals have also taken place. Private equity firm InfraRed NF announced its acquisition of a 90% stake in Hong Kong self-storage provider RedBox Storage Limited in April.

In May 2018, RedBox also invested USD 28 million in China Mini Storage, a technology-led self-storage provider and one of the largest mini self-storage operators in China.

We expect more investment activity because of the growing interest in alternative real estate and as operators want to accelerate market consolidation through acquisitions.

Earlier this year, Hong Kong-based self-storage provider Boxful acquired its Taiwanese competitor ALL IN Premium Storage for an undisclosed…

Source link

Continue Reading
Advertisement Load WordPress Sites in as fast as 37ms!
Comments

Property

Thailand Property News Of The Week

CBRE’s weekly property news snapshot features the latest residential and commercial real estate stories in Thailand and elsewhere that you cannot afford to miss – be it regarding residential, industrial, retail, office, hotel, land, or investment property.

Avatar

Published

on

The top residential and commercial real estate news of the week – 24 June 2019

(more…)
Continue Reading

Press Release

The Creators HQ to penetrate Rangsit area with premium high-rise condominium

The Creators HQ has invested as much as 1.5 billion baht to build a premium condominium under the “Common TU” brand as it enters the Rangsit area for the first time.

Avatar

Published

on

The company is focused on penetrating the Rangsit area for the first time, kicking off with “Common TU” a new premium high-rise condominium which recently received EIA approval.

(more…)
Continue Reading

Property

Real Estate Transparency: Southeast Asia moving in the right direction

Encouragingly, Asia Pacific has made positive strides throughout this period and in the 2018 survey, it recorded the biggest improvement of the four major regions globally.

Avatar

Published

on

We recently launched the 10th edition of our Global Real Estate Transparency Index, a leading publication that has been charting the progression of transparency across the world for two decades.

(more…)
Continue Reading

Most Read

Upcoming Events

Nov 27

The Future Energy Show Thailand

November 27 @ 10:00 am - November 28 @ 5:30 pm BMT

Press Release

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 10,903 other subscribers

Trending