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Link 🔗
Article by Edge Prop on Self-Storage
What is the ultimate recession-proof business model? Self-Storage Space 🧳
Let's say I pay $400 a month to store a bunch of my stuff, I'm not going to move my stuff somewhere else to save some money during a recession. That's why in this week's One Thing, we'll dive deep into the storage business 👇
Business Model 📝
- Self-Storage is a relatively new concept in Malaysia but the industry in the US and Europe have seen tremendous growth - They even made a show about it
- The model is simple - Rent out storage spaces ranging from small lockers to 200 sq ft rooms to people who need some extra space
Why is Self-Storage a Good Business? 💲
- When it comes to real estate investments, storage units probably requires the least amount of maintenance. You don't have to deal with broken toilets and worrying that someone is going to trash your furniture
- The beauty of this industry is that you have the ability to eliminate the moving parts, introduce some technology and automate the entire onboarding process
- Self Storage Businesses can have extremely high-profit margins. In 2019, Public Storage delivered a whopping 54% net margin on $2.8 billion in gross revenue
Players 🏁
- Although Malaysia is still in the pre-introduction phase - there are already a handful of players
- Flexi Storage offers more than 60 different storage sizes ranging from 16 sq ft to 200 sq ft. The minimum space-renting period is two weeks and the maximum is a year with renewal options. The minimum charge per month is RM66
- The facility's occupancy rate is currently at 70% said Flexi Storage co-founder, Desmond How
- Lock + Store offers storage space with sizes from 14 sq ft to 150 sq ft. The rents range from RM7 psf to RM12 psf per month
Opportunites 🔮
- The increasing demand for e-commerce and online shopping will raise the demand for storage space
- With more and more people moving out of Malaysia, they will need a place to store their furniture and belongings
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