What's behind the global self-storage boom?

Walking the endless corridors of Apple Storage in downtown Toronto, it's easy to see why business is booming.

Behind one metal shutter, hundreds of candles are boxed up in preparation for shipping around the world, while behind another, an electric bike repair shop tunes the transport for the city's hundreds of delivery workers.

There are also lockers full of bitcoin ATM machines, which are banned in the UK but legal in Canada, allowing bitcoin holders to exchange the digital currency for cash and vice versa.

Co-owner David Allan leads me down a long, brightly lit hallway lined with rows of shuttered metal doors, and tells me that 70 percent of the space is rented out to businesses.

“Pre-COVID, office rents were around 60 Canadian dollars ($44, £34) per square foot, while warehouses could be rented for $30 per square foot back then.

“So instead of having indoor offices for storing files, companies are relocating to self-storage facilities at half the cost or even less, allowing them to use their offices more productively.”

It's a global trend: Warehouse companies are snapping up vacant commercial space abandoned in the wake of the pandemic, while consumers and businesses are seeking cheaper storage options amid rising rents.

Sixteen new facilities opened in Canada last year, adding 1 million square feet of space, and rents are also increasing by an average of 12 per cent from 2023, according to StorTrack, which tracks industry data.

In Britain, industry sales exceeded £1 billion for the first time last year, according to a report by commercial property firm Cushman & Wakefield and the Self-Storage Association.

In parts of Asia, a so-called side hustle culture is helping to drive growth, according to Helen Ng, CEO of the Self-Storage Association of Asia (SSAA).

She said having a side hustle is more common in Singapore, and often involves storing inventory for an e-commerce business in a warehouse.

Ng himself owns two self-storage facilities in Singapore, and says nearly half of his tenants use the facilities for side jobs.

The industry has become so popular among investors that it has spawned several podcasts advising future tycoons on how to get into the industry.

Dean Booty, an entrepreneur from Beverley in East Yorkshire, is one of them.

“I had a restaurant business that failed and it was a terrible time for me and my wife. It was in the town centre where I lived so it really hit home.”

Booty said this inspired him to share his success with self-storage with others.

He revealed that his podcast, “Hacking Self Storage,” gets about 15,000 listens per month, adding: “I had no idea so many people were interested in self-storage. It's amazing.”

Mr Booty's warehousing business spans just under 100,000 sq ft across five locations in England, Scotland and Wales.

The 42-year-old father says he wants to retire by 50.

“There's a lot of money coming into the industry which means it's becoming increasingly competitive, but at the moment demand is growing faster than supply in the UK which is great,” he added.

But not everyone shares Booty's excitement.

“This is an indictment of the housing crisis in our country. Space should not be a luxury when it comes to living space,” said Ben Toomey, chief executive of housing campaign group Generation Rent.

He accuses the industry of “making a lot of money from people who don't have room in their homes.”

“Not just to store their belongings, but to get by or deal with the mental health issues that come with living in small or crowded homes.”

Back at Apple Storage in Toronto, we enter a large, brightly lit locker with tools hanging from the walls and two electric bikes dangling from a workbench.

Mechanics are hard at work, including Kevin Tse, who said his e-bike repair business is spread across multiple units in the building.

“It's relatively inexpensive to do just this type of work compared to having a retail storefront. The reason we chose this storage site is because they actually had a storefront that was demolished to make way for apartments. This was an easy next step for us.”

Tsui, who is from Hong Kong, explains that where she comes from, most of the stores in shopping malls look like warehouses.

“In Canada, we take advantage of the fact that we have a lot of space, but space is slowly shrinking in larger cities. If you want enough space to do what you need, this is ideal.”

Helen Ng agreed, adding: “Urbanisation is just a reality. I'm not sure how realistic it is to expect everyone to actually store things at home.”