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Banking on the strong demand for rentable self-storage space in Singapore, the supply of such properties increased by 11 percent to 1.6 million sq ft in 2015, according to the latest report from CBRE.
According to CBRE, the market for self-storage space in developed markets, like the city-state, is driven by four Ds—death, divorce, dislocation, and density.
In Singapore, CBRE said density was by far the biggest driver for self-storage space demand, accounting for around 918,000 sq ft of demand, followed by dislocation, death and divorce.
But the supply of self-storage space here still falls below those in Hong Kong and the United States. According to the report, Singapore’s rentable space per capita stood at just 0.30 sq ft, while Hong Kong and the United States recorded 0.44 sq ft and 7.80 sq ft per capita, respectively.
The property consultancy attributed the shortfall to the “lack of consumer awareness and the fact that the necessity for such facilities remain low at the moment.”
Nevertheless, the long-term economic and demographic trends in the republic, such as rising wealth, shrinking home sizes and an ageing population, are a boon for the self-storage industry, CBRE said.
“With storage needs in Singapore projected to rise in light of homes getting smaller, the self-storage sector is definitely on the investors’ radar,” said CBRE’s Research Head for Singapore and Southeast Asia, Desmond Sim.
Furthermore, CBRE’s latest Asia Pacific Investor Intentions Survey revealed that proportion of people who have already invested in such properties rose from 7.3 percent to 7.9 percent between 2015 and 2016. At the same time, those interested in the sector climbed from 9.2 percent to 14 percent.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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