Self-storage units have long been a popular option for investors with demand from the private sector remaining high.

Ray White Commercial Head of Research, Vanessa Rader, said over the last 12 months, there has been $132 million in sales of self-storage units, highlighting the level of demand.

“Quality assets have maintained low yields, however, assets have recorded capitalisation rates as high as 8 per cent in some regional markets,” Ms Rader said.

“Enquiry levels have been elevated across the country from the private sector including syndicates and high-net-worth individuals looking for the security of these assets and their stable income streams. There has been an increase in buyers venturing interstate to secure these assets with high population growth zones across the country the key focus for these buyers.”

Ms Rader said rents have been on the rise like other industrial assets, while high demand has kept vacancies low. She said the current housing crisis has also led to many people needing to store their goods while they try and find a place to live.

“This is most apparent in highly populated areas or those which have seen strong migration growth such as South East Queensland, Perth, and Western Sydney, while there has been some move away from regional markets as post COVID-19 some population flows have come back to major cities.”

According to Rader, there are currently 50 self-storage developments in the construction phase across Australia that will bring online more than 300,000sq m of storage space. “Development is heavily dominated by east coast markets, with South East Queensland expected to enjoy the greatest new project completions, mostly across metropolitan Brisbane and Gold Coast.

“These high population areas are currently hampered by the housing shortage, keeping residential vacancies low which historically has a strong correlation with the occupancy of self-storage, which is currently high.”

She said new self-storage facilities continue to become more sophisticated, with improved security measures, while demand for more flexible spaces has also increased. “As end user activity remains high, demand to purchase self-storage facilities is expected to grow.”

The stable income stream is a drawcard for buyers, together with the continued appetite for industrial assets in the current environment.”