CBRE Report Examines Asia Self-Storage Market

CBRE Global Research, a division of real estate services company CBRE Inc., has published a report examining the Asia self-storage market. Titled “Demographic Changes Drive Demand for Self-Storage Space in Asia,” the 22-page report provides an overview of market dynamics across the region, identifying demand drivers, investor interest, market potential, real estate conversions, supply and competition, and risk factors.

In general, self-storage development and services in Asia are 20 years behind those in the United States but remain poised for rapid growth, according to CBRE analysts. “Self-storage is a relatively new type of commercial property in Asia that is primed for growth due to demographic changes, strong business activity and growing investor interest,” according to the executive summary. “Focusing on the more developed cities of Tokyo, Hong Kong and Singapore, demand is being driven by the four ‘Ds’—death, divorce, density and dislocation—as well as business activity (office expansion and contraction).”

Although consumer demand in Hong Kong, Singapore and Tokyo outpaces current supply, other regions face awareness challenges and other risks. “Despite the strong demand fundamentals and robust investor interest, the key risks of low awareness levels, lack of available properties for conversion, [and] short lease and land tenure may dampen the growth potential of self-storage,” analysts wrote.

Singapore currently has the most rentable square feet of self-storage available per household at 1.29, followed by Hong Kong at 1.06 and Tokyo at 0.32, according to the report. By comparison, the U.S. market has 21.62 rentable square feet per household, while Australia is at 5.13 and the United Kingdom at 1.17.

In terms of available square footage, Hong Kong leads with 2.6 million square feet of storage space, followed by Tokyo with 1.6 million and Singapore with 1.5 million. Using New York as a benchmark, those markets would have to reach 27.9 million square feet in Tokyo, 12.1 million square feet in Hong Kong and 5.5 million square feet in Singapore to reach development equilibrium, according to the report.

Emerging markets to watch include the mainland China cities of Beijing, Shanghai and Shenzhen. Other cities identified for growth are Bangkok; Kuala Lumpur, Malaysia; Manila, Philippines; and Taipei, Taiwan. “As some of the more developed Asian cities, these markets are experiencing similar storage demand drivers—tighter living spaces due to urbanization, strong job growth and a growing office market,” Darren Benson, executive director of CBRE’s Industrial & Logistics Brokerage Services Asia, told a source.

The CBRE report was released during the recent Self Storage Expo Asia in Tokyo. A downloadable PDF version of the report is available for free on the CBRE website.

CBRE Global Research is a network of researchers and other professionals who provide consulting services, econometric forecasting and real estate market research. In the United States, CBRE’s Self Storage Advisory Group specializes in self-storage acquisitions, dispositions and financing. It offers complete brokerage and sales services and value assessments.