Property types
Why invest in properties?
Globally, property investment is recognised for its strong, stable long-term investment potential.
Even in slower markets, real estate tends to grow, a claim few other investments can make. Property investment aims for returns through rental income, resale value, or a combination of both.
Local (South African) real estate investments face challenges such as low or no capital growth, increasing crime, and difficulties in generating positive cash flow
These factors, amidst the ongoing economic downturn and our volatile currency, are prompting many South Africans to seek alternatives offshore.
Investors are turning to offshore property and specifically ‘buy to let’ self-storage properties. Traditional real estate investments offshore often are out of reach for most South Africans due to high starting prices. Offshore property in destinations like Mauritius, Portugal or Spain starts anywhere from R7million, not to mention the UK and USA.
Self-storage (Commercial, Buy-to-let Property), however is a low-maintenance investment with a much lower entry price than traditional real estate. When you combine the lower entry price, rental return, the growth of the property and hedging your ZAR against USD, by buying offshore, South Africans get a great solution.
WHat is self storage?
longer-term, usually monthly basis
• Tenants have exclusive access to their rented space
• It's a low-maintenance investment option
• Attracts investors with its hassle-free approach and potential for steady returns
Self-storage is the no. 1 trend in the property market
- Lower Capital Barrier to Entry
- Low Maintenance Costs
- Liquidity
- Tenant Vacancies
- No Disruptive Tenants
- High Demand
- Recession-Proof
The Global Self-Storage Industry
A few decades ago, the concept of self-storage was relatively unknown. Today it is a multi-billion dollar industry worldwide.
At a Glance: Industry Valuation
- Global Market: Valued at approximately $58.26 billion in 2023, with projections to reach $72.15 billion by 2029. More than 70,000 self-storage facilities are serving customers worldwide.
- United States: The largest national market, valued at $39.5 billion in 2023.
- Europe: Notable for its robust investment activity and vigorous expansion, with year-to-date investments around €342 million.
- South Africa: A rapidly emerging market, with around 70,000 self-storage units indicating significant potential for growth.
Trends and Forecasts
- Growth Rate: The global market is expected to grow at a compound annual growth rate (CAGR) of approximately 4.7% from 2024 to 2032, reaching $87.8 billion by 2032.
- Urban Expansion: Urbanization and downsizing are major drivers, leading to a surge in demand, especially in Europe and developing markets.
Industry Dynamics
- Real Estate Investment Trusts (REITs): Major investments from REITs, including South African REITs, signify strong growth and investment allure.
- Investor Appeal: The resilience of the self-storage sector during economic downturns positions it as an attractive option for steady cash flow.
Global growth trends highlight the vigorous expansion of the self-storage industry.
Europe is at the brink of a self-storage boom, fuelled by rising urbanization and limited space availability. Attracting substantial investments from key global and South African Real Estate Investment Trusts (REITs), the region demonstrates strong growth prospects and appeal for investment.
For a more comprehensive analysis of the self-storage industry’s evolution, expansion, and future, read our detailed blog – Just how big is the self-storage industry.