APAC self storage stock to grow 50% in the next 5 years

The growth will be more prominent in Japan, Australia, and Hong Kong.

Despite being an active market in Asia Pacific for the past few years, the self-storage sector has been widely fragmented. According to JLL, self storage facilities have attracted the interest of institutional investors recently as these assets offer yields higher than logistics and multi-family assets in Japan, Australia, and Hong Kong. With a resilient income and high tenant retention, more operators are also looking to own rather than lease their premises. 

Here’s more from JLL:

We expect self storage stock to grow c. 50% in the next five years, mirroring the growth of online retail, in the more mature cities of Japan, Australia and Hong Kong, due to the following drivers: 

1. Continued migration into cities and an acceleration in renting: Asian city populations are still growing at 4-10% over the next five years while city governments are changing housing policies to encourage renting instead of buying. These trends, compounded by small apartment sizes, are boosting the demand for self storage facilities. 

2. Rise in remote working and flex office space: After working from home due to COVID-19, a growing number of employees have adapted to working partially from home or a third-party location such as a flexible office spaces. As a result, more residents are adapting to self storage to create a bit of extra space at home. Widespread utilisation of flex offices is also driving demand for business storage. 

3. E-commerce growth driving demand for business storage: In some cities, e-commerce and retailers have turned to centres closer to the city to hold or showcase goods and to facilitate last mile deliveries. 

Read the full report here.