Perth’s self-storage market is in the midst of a shake-up after Queensland-based National Storage expanded to nine properties comprising 5,000 individual units following the purchase of its local rival Self Lock’s four metropolitan centres.
Perth’s self-storage market is in the midst of a shake-up after Queensland-based National Storage expanded to nine properties comprising 5,000 individual units following the purchase of its local rival Self Lock’s four metropolitan centres.
Through the acquisitions, National will re-badge centres in Guildford, Rockingham, Subiaco and East Perth before leasing them back to their original owner for a period of 23 years.
National Storage operations director Peter Greer said in a statement that the company, headquartered in Brisbane, now owned 45 storage centres across Australia, representing about 219,000 square metres of domestic and commercial storage space.
Mr Greer said Western Australia was an important growth market on the back of extraordinary business and residential development in the city, and the company would be looking to further consolidate its market position within 12 months through the development of 300 climate-controlled storage units in Bayswater.
“From the domestic storage perspective, the increasing trend towards apartment living has fuelled the need for additional longer term space for larger items such as cars and boats,” he said.
“People are also recognising the value and convenience of using climate-controlled facilities for items such as wine, much in the same way as the US and the UK.”
Established in 2000 following the merger of Stowaway Self Storage, National Mini Storage and Premier Self Storage, the National Storage business now employs more than 100 staff across its network in WA, New South Wales, Victoria and Queensland.
Koala is the only significant self-storage business left in WA for National Storage to take over, with prominent centres operating in Osborne Park and O’Connor.
Koala part-owner Rod Doubikin told WA Business News his company had been approached several times by National Storage with offers to buy it out; however Mr Doubikin and business partner Lyndon Lewis refused to sell because their operations were increasingly profitable and Koala’s land, situated in prime industrial and commercial precincts, was a valuable asset.
“If we sell, what can we do with the money in this market?” Mr Doubikin said.
“Achieving the right demographics and securing the right site for storage facilities is very difficult to do, particularly now with the weight of money chasing assets around town.”
Mr Doubikin said Koala self-storage set the benchmark in the WA industry with its locations, operation, presentation and price.
He had considered the possibility of opening new centres, but was now committed to a multi-million dollar expansion plan of Koala’s two sites this year.
The roof of its O’Connor operation will be lifted to make way for a three-storey addition with elevators, while over in Osborne Park the centre will receive a similar addition, which is expected to net the company an additional 6,000sq m of space there.
Anything less than this amount of additional space would not make the re-development viable, he said.
Even though both National Storage and Koala claim the storage industry is quite profitable, Mr Doubikin estimates that yields in the storage game had tightened considerably to an average of 8.25 per cent.
Mr Doubikin said storage facilities were attracting yields of 15 per cent when he entered the business 15 years ago.
“People are renting the facilities for an average of seven months, but we’ve still got customers that signed up 14 years ago,” Mr Doubikin said.
“It’s a growing business, but the industry in Australia has a way to go before achieving the same absorption levels as the US.”
