The UK self storage industry saw a turnover of £385m last year with occupancy rates up 3%.
The latest Self Storage Association UK survey, produced by Deloitte Real Estate, showed despite the introduction of VAT on rents for storage, 79% of operators indicate they expect to see an improvement in profits over the year ahead.
The survey shows average occupancy levels have risen three percentage points to 71% over 12 months.
With demand increasing, there is now an appetite to expand portfolios among operators, although generally this new space will be outside the London market, the survey found.
The survey reported that there are approximately 975 self storage facilities in the UK providing in the region of 34.4m sq ft of storage space. Deloitte Real Estate estimates the total turnover for the UK industry in 2013 was £385m from around 420 different operators, employing more than 2,000 full time equivalent staff.
Of all the facilities in the UK, 339 are held by larger operators with small operators accounting for the remainder.
Rennie Schafer, chief executive of the Self Storage Association UK, said: “Figures are encouraging as operators are seeing increased occupancy although this has been offset by slightly lower income levels.
“Considering that 20% VAT was applied to the rent of self storage units 18 months ago the industry has shown remarkable resilience.”
Ollie Saunders, partner and head of self storage at Deloitte Real Estate, said: “With occupancy rising and the sector continuing to show resilience despite the introduction of VAT, we are seeing an optimistic outlook from both operators and investors.
“There are new stores planned, but the shortage of available land and the potential to redevelop self storage facilities for alternative uses will mean that supply is unlikely to meet the future demand. We have also seen a resurgence in corporate activity with a number of important transactions as operators start to acquire existing stores to expand – both in the UK and Europe.”