While many other property-based industries have seen rents and occupancy hit by the impact of COVD-19, the self storage industry has seen growth in both revenue and occupancy. Based on Q3 results, the Self Storage Association UK reports that the industry has increased occupancy by 2.9 points year-on-year to 79.2%, while also increasing the return per square foot on storage space by over 1.5% to £23.46. Non payment of storage fees has also remained basically stable year-on-year, with less than 1.5% of storage fees being overdue at 30 days. In fact, the lockdowns have moved more customers to direct debit and other automated payments, as self storage stores encourage non-contact and cashless systems.
The diversity of people using self storage has meant that the industry has not had large numbers of move outs as a result of COVID-19. There was an increase in move outs at the completion of the first lock down, but this was mostly pent up demand due to customers inability to move out during the initial lockdown travel restrictions. Move in levels were also up post lock down, and by July the industry was above their pre-COVID-19 occupancy levels. Enquiry levels have also been at record levels as people uncertain about their future are looking to see if self storage can help them with their storage needs, whether that be commercial or private use. Early data from the current lock down indicates it has had limited, if any, impact on the industry with enquiry rates still high.
People often come to self storage during life changing moments; the birth of a child, moving house, a death in the family, entering or leaving a new relationship. All this is continuing during the pandemic, and in some cases, like use by people renovating their houses, has increased. Commercial enquiries have also increased as people make space for social distancing in shops and cafes, more people move to online sales and on-hand stock levels are being increased due to increasing import times. Self storage stores have implemented social distancing and vigorous cleaning procedures to keep their customers safe during the pandemic. Many have also moved to more automated and online systems to minimise contact between customers and staff within stores.
The major listed self storage companies have performed above the industry average as indicated in their most recent financial statements. Big Yellow reported at 2.4% increase in like-for-like revenue, a 3.7% increase in profit before tax and a 3.9-point increase in occupancy in their September half year report. Safestore reported like-for-like storage revenue up 4.4% in their UK stores with a 3.2 percentage point increase in occupancy in their fourth quarter trading update. Both companies share prices are up on the same time 12 months ago, and close to the levels prior to the February market correction.
The coming 12 months remains full of uncertainty, however all indications are that demand for self storage will continue to grow and the industry will remain in a strong position. Changes in the commercial real estate market as a result of the pandemic could provide more opportunity for development of new stores, which has not shown any signs of slowing. All the major operators have a strong pipeline of development which they remain committed to. This development is not just in the South. Surestore, who are a preferred developer for a number of institutions including Legal and General, recently announced plans to open a further ten sites by the end of 2021, most of which will be in the North.