US-based real estate investment firm Heitman clearly believes in Asian self-storage investment enough that they want to look more into it. According to SCMP, the Chicago-based firm is looking to expand its portfolio. In its search to diversify its assets, it found that the Asian self-storage market is ripe with possibilities for an investor looking to have a good portfolio.
Heitman oversees around US$41.7 billion in assets. It looks to invest in other assets, most of which have recently been mini-storage areas in Asia. It already had done so in places in Australia, Japan, and Singapore, in a bid to have as diverse a portfolio as it can have. Mary Ludgin, senior global investment research director at Heitman, said that Hong Kong has a greater use for self-storage, given the limited space of most flats in the region.
Ludgin shared her analysis, saying that any individual in Hong Kong may have an apartment space not suited enough for all their storage needs, whatever appliances or items they may have. Given these small apartments, these individuals will look for somewhere else to store their surplus items safely, and those would predictably be these self-storage units.
However, with such growth comes responsibilities and headaches. Inside Self Storage noted that challenges and lessons come with this growth as well. Based on the report by an industry insider, Asian countries have some specifics, regarding 'product awareness' as well as the activity in the region.
The self-storage movement has been popular in the US since the 80s, where one sq ft of the unit was made available per person. In recent years, that has increased to 8 sq ft per person, and it's been a profitable business. In Asia, the business has been growing slowly but surely, and many lessons have since been learned--both hard and valuable.
The biggest challenge remained to be awareness. Marketing isn't where it's supposed to be yet, and all Asian markets are struggling to make the market more aware. The case is a surge of supply, but not of demand. However, actions are being made to make sure that the available market knows of the service, as well as of the abundance of units.
Hong Kong's private housing without their own storage space--or lacking enough space for it--sits at 852,000 flats. WIth a number that big, the supply may soon run out, but the awareness needs to come first. With the awareness, investors are sure to follow, what with the supply needing benefactors to fund them.
