There’s no doubt about it – the self-storage sector is blossoming in the UK, with the industry’s annual turnover reaching over £1.2 billion in 2024 and growing demand among consumers serving to fuel further growth.
In short, this market offers an exciting prospect for M&A activity, with the opportunity to benefit from its stable income stream and burgeoning customer base, among other unique attractions.
Intrigued? If you’re thinking of acquiring within this sector in 2025 to enhance your portfolio, read on to discover the pros and cons of investing in self-storage as well as some insider tips on how to buy the right business for your requirements. Shall we get started?
Pros and cons of buying a self-storage business
It’s important to gain a solid understanding of both the positive and negative aspects of investing in this sector, so with that aim in mind, let’s begin by weighing up the benefits.
Advantages of investing in self-storage
A clear upside to acquiring a self-storage business is the stability of the income it generates, as we’ve already touched upon above. There is also the fact that an established business also already has an established customer base and – hopefully – high occupancy rates for its units, which can result in an immediate return on your investment.
In short, buying an existing self-storage business with robust levels of occupancy means reliability and a firm foundation for you to build upon. It also saves you the significant time, cost and strain of having to set up a company from scratch, as it can take some time for a new self-storage business to acquire enough renters to generate a profit.
Another benefit of acquiring within this sector is the flexibility and growth potential it affords you. Once your new acquisition has completed the integration period successfully and begin to bring you a decent turnover, you can look at expanding your geographical reach or adding complementary services to the business – such as providing vehicle rental to help your ‘occupiers’ move their belongings to and from the units.
Downsides of investing in self-storage
The main obstacles you are likely to encounter if you acquire a self-storage business are the same challenges you’re liable to face with any kind of acquisition. These consist of:
- Securing your place in the market and maintaining the customer base the company had before you opted to take over. Because self-storage businesses across the UK are expanding – a form of growth fuelled to no small extent by the bigger franchises – you should research your acquisition target carefully to ensure it can stave off increasing competition.
You should also assess its geographical location to determine whether demand for self-storage is apt to remain high in that area and contribute to the business’s ongoing success.
Finally, it’s important to understand what consumers want from their self-storage facility and whether you are well-placed to provide any additional services or benefits that will make your new business more appealing.
- Competition can be fierce. As we’ve just described, there are some huge businesses dominating the market, so you need to be confident that the self-storage company you buy can still bring in high occupancy rates and remain competitive against the ‘giants’ of the self-storage world.
- Ensuring effective management of your new facility. While many self-storage facilities have hardly any staff – sometimes none on the actual premises at all – it’s still important to remain active and vigilant in your management of the facility. After all, you are in charge of safeguarding the precious belongings of your customers. Depending on your budget, you may want to consider hiring round-the-clock personnel and/or investing in state-of-the-art security software, if the facility doesn’t have it in place already.
Special considerations
If you’re brand-new to the world of self-storage you may not be familiar with the range of self-storage facilities available.
Broadly speaking, they break down into four main types:
1. Warehouses
At the loftier end of the storage scale, there are big warehouses, which tend to be used for storing sizable industrial equipment or for stockpiling inventory for various businesses.
In many cases, warehouses offer more sophisticated services and facilities, including heightened security and the ability to access your belongings at any time of day or night. As a result, these facilities can often charge higher rents for the storage space they provide.
2. Container units
Container storage facilities usually comprise a compound filled with shipping container units, with the potential to provide renters with over 100sqft of storage space depending on the size of the containers.
Of course, this form of storage is more basic and it’s important to regularly inspect and maintain the units to minimise damage from exposure to the elements.
3. Lock-up units
These garage-style units are smaller than containers, offering compact storage spaces at affordable rates.
Within these main categories there are specific storage units designed to accommodate vehicles such as caravans, cars and even boats; there are also furniture depositories and outdoor storage units which tend to offer easy access for owners who can just drive up without having to go right into the midst of the facility.
How to acquire a self-storage business
If you are eager to go ahead and acquire a business within this steadily growing sector, let’s take a closer look at the actual M&A process. After all, if you have never acquired before, it can make things easier if you know what to expect!
1. Choosing your acquisition targets
The first step, of course, is to select the best self-storage targets for purchase, once you have done your research and decided which type of facility you’d like to own.
Because there are a few different types of self-storage businesses to consider – from warehouses to lock-ups – it may be worth your while to hire a business broker to help you find and verify potential targets. They have an extensive network of contacts spanning various sectors, including self-storage, so they are well-placed to help you find the right sort of companies.
Once you have narrowed down your preferred candidates you can ask for valuations, so you start off with a good idea of their market value. Again, a business broker can assist you by conducting the valuation themselves and ensuring you pay a fair market price.
2. Negotiating an initial agreement
When you have chosen a business – or businesses – you would like to purchase, it’s time to proceed to the negotiation stage. This allows you and the seller to create an initial heads of terms agreement, settling key terms for the proposed deal.
Although not legally binding in most cases, a heads of terms agreement is still very beneficial for both buyers and sellers. Having this agreement laid out helps to streamline the acquisition process and putting both you and the seller of the self-storage facility on the same page.
3. Due diligence
The next step is due diligence, which is arguably the most crucial part of the M&A process.
During this stage, you’ll be given access to your self-storage target’s documentation, ranging from tax returns and business registration details through to paperwork related to the property it occupies. This part of the process should hopefully provide you with all the information you need to help you make a truly informed decision about purchasing a self-storage facility.
A word to the wise – don’t be tempted to rush this stage, or you might miss something that could have a serious impact post-sale, such as bad debts or a legal issue.
4. Closing the deal
If you complete your due diligence and you’re satisfied that your self-storage target represents a sound investment opportunity, then the obvious next (and final) step is to sign on the dotted line and seal the deal!
Why use a business broker
As we’ve mentioned, having a business broker to assist you with various aspects of the deal – or, in fact, the entire acquisition process – can prove invaluable, leaving you free to focus on what happens once the deal has been completed.
Not convinced? Did you know that, besides helping you source and vet the right targets and providing a fair and accurate valuation, business brokers can also assist with negotiations and due diligence – thereby ensuring a smooth and streamlined journey to a successful deal?
Reliable and experienced business brokers can even offer insider tips and expert advice on how to manage the integration process post-sale, helping to optimise the transition period and get you and your new business firmly on the right track.
Harris Acquire – for a stress-free self-storage acquisition
If you can’t wait to get the ball rolling on your self-storage purchase, then why not get in touch with our friendly and highly experienced team here at Harris Acquire?
We provide a comprehensive acquisition service carefully tailored to your unique requirements, taking you all the way from initial contact to deal completion with maximum value and minimal fuss.
To find out more about our services and how we can help, don’t hesitate to give us a call on 01926 757100 or send an email to Hello@harrisacquire.com.
