looking beyond covid-19：self-storage out-of-the-box thinking for ‘in-the-box’ industry investment in china
jul 21, 2020
shanghai, july 21, 2020 —— according to cushman & wakefield’s recent report, looking beyond covid-19: self-storage – out-of-the-box thinking for ‘in-the-box’ industry investment in china, housing multiple individual storage units used for the storage of various items – from household furniture to seasonal clothes to office equipment – self-storage commercial facilities first made an appearance in the u.s. and in europe.
in china, the earliest batch of chain self-storage providers appeared around 2011, with the provider number growth rate accelerating in 2014. additionally, in 2015, with the boom in mobile internet usage, the first batch of o2o self-storage providers appeared.
today, given a number of factors, including a growing economy, rising disposable income, the increased purchasing of goods, products and items, high urban house prices and smaller housing units, self-storage in china has continued to gain the attention of investors, operators and customers. the pace of self-storage industry development in china has been rapid. according to a 2018 survey conducted by self storage association asia, the number of self-storage facilities in the country rose by 122.3% as the number of locations jumped from less than 170 in 2016 to more than 378 in 2017.
in terms of operators, there are a good number in china’s first-tier cities, with some in second-tier cities. the largest number of self-storage facilities can be found in the four first-tier cities of beijing, shanghai, shenzhen and guangzhou, and selected second-tier cities, such as nanjing, hangzhou, chengdu, wuhan, qingdao, shenyang and tianjin.
in terms of self-storage use in china, there are two categories: personal storage use, and business storage use.
internationally, as mentioned before, self-storage has been around for some time. in the u.s., for example, self-storage grew rapidly in the 1970s, helping to form one of the world’s biggest real estate investment trusts (reits), public storage, which is located in california and which has a market capitalisation of $ 36 billion.
today, in china, the self-storage business sector is growing. in beijing and shanghai, for instance, the sector is enjoying solid annual growth, in part thanks to millennials who are not compromising on their lifestyles and the fact that people now tend to be more mobile.
shaun brodie, head of occupier research, greater china, cushman & wakefield, said: “under the covid-19 epidemic, all industry sectors in china have been affected, but some industry sectors have been able to maintain stable growth and one of these industry sectors, generally, has been self-storage, given continued local demand. with accelerated economic growth expected for china’s second-tier cities, increasing population mobility anticipated in and around the country, and continued high housing prices in the centre of the nation’s large cities, the chinese market has the potential to match and surpass self-storage development in europe and the u.s.”
given an expected growth in demand, more and more self-storage operators in china plan to expand their operations in the future. according to a recent self storage association asia report, 57% of operators are likely to expand their business presence in the same city market where their existing operation is located, while 29% are likely to choose to expand into new city markets in china.
alvin yip, president of capital markets, greater china, and head of capital markets, china, said: “the cost of office and residential space has been steadily rising alongside city development. in order for users to realise the best usage return on their real estate space, more and more demand has turned to self-storage services. we anticipate self-storage will attract more attention and serve as another alternative investment to investors in the future.”
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cushman & wakefield (nyse: cwk) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. cushman & wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. across greater china, there are 22 offices servicing the local market. the company won four of the top awards in the euromoney survey 2017 and 2018 in the categories of overall, agency letting/sales, valuation and research in china. in 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. to learn more, visit www.cushmanwakefield.com or follow @cushwake on twitter.
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