Expanding self storage facilities
Reproduced article from the Self Storage Association of Australasia (SSAA INsider May 2023) – www.selfstorage.org.au
Expanding and developing self-storage facilities can be a profitable business venture. To extract the highest value from buyers for the expansion potential, it is important to assess the demand for storage in the area and engage a specialist self-storage builder to put together plans and permits for the expansion. Building multi-level facilities in metropolitan areas are becoming more common, and expanding in stages can be a viable option for businesses. With careful planning and execution, investing in self-storage facilities can yield high returns.
Self-storage facilities have become increasingly popular over the years, with more and more people looking for secure and convenient ways to store their belongings.
As such, investing in expanding and developing self storage facilities can be a profitable business venture. Not only can it improve the sale price of the property, but it can also attract more tenants and generate higher rental income. However, in order to extract the highest value from buyers for the expansion potential, it is essential to take specific steps.
First and foremost, assessing the demand for storage in the area is crucial. If there is ongoing solid demand, then the potential for expansion is more valuable. In such cases, getting plans and permits for the expansion can be a game-changer. This shows buyers exactly what can be built and allows them to expand immediately, thereby making the property more attractive.
When preparing plans for submission, it is advisable to engage a builder with a lot of experience building self storage facilities. This ensures that the design is conducive to a well-flowing and functioning facility. Self storage buildings are specialised buildings, so it is important to consult a specialist who understands the nuances of building such facilities. This will save time and money and ensure that the end product is of high quality.
In most metropolitan areas, multi-level facilities are becoming more common. Don’t be scared off by the prospect of building a multi-level facility, as it can provide more storage space and can generate higher rental income. However, always assess the feasibility of such a facility in the area and ensure it complies with all zoning laws and regulations.
Suppose the demand for storage is not strong enough to justify a full expansion. In that case, it is still advisable to consult a specialist self storage builder to develop plans for a potential expansion or redevelopment. It may be wise not to apply for a permit if demand is not strong enough, as a planning permit will expire within two years if not commenced – so assessing the market before investing in expansion is essential.
Expanding in stages to meet demand can be a viable option. This allows for more flexibility and reduces the risk of overbuilding. It also allows the business to respond to changing market conditions and adjust the expansion plans accordingly.
Further possibilities if the facility is already at its maximum capacity would be exploring whether adjacent land is available to purchase. Alternatively, more and more facilities are purchasing land close by and running it as a satellite facility, with only minimal increase in ongoing expenses of the facility.
There are a number of ways you can maximise the potential of your asset sale. Take the time to think through the options, your desired outcome and importantly, ensure you seek professional advice.
