Unlocking value from next-generation storage

The European self storage market presents a unique investment opportunity through the combination of growing demand for storage space, within a market which is currently underserved and fragmented.

The sector benefits from strong tailwinds which are driving demand for storage from both consumers and commercial customers, and supporting resilient and long-term sustainable growth. Since 2012, the sector has averaged 14% growth each year, growing six times in size in just over a decade.

At the end of last year, there were around 10,000 self storage facilities in Europe – FEDESSA, the Federation of European Self Storage Associations, predicts that demand will see this figure double by 2035.

Driving demand in the consumer market are the demographic factors known as the 4Ds – dislocation, downsizing, divorce and death – in tandem with consumers now occupying smaller houses and flats with less storage space at home. Commercial customers are increasingly wanting storage that is flexible, scalable and conveniently located, which optimizes their overall business space and supports last-mile delivery.

Undersupply and fragmentation create opportunity

Compared to more mature markets such as the UK, the self storage market in continental Europe is at an early stage of development and is fragmented with a long tail of small operators behind a limited number of market leaders.

Based on FEDESSA numbers, we estimate supply per capita in Europe to be on average around 3x lower than the UK, which in turn is 7x below the penetration rate in the US. Awareness of the service is gradually growing, leading to more consumers and small businesses being attracted towards self storage.

The fragmentation of the market creates the opportunity to rapidly build meaningful scale. For example, Mitiska REIM’s partnership with Storo, which is backed by the MEREP 3 fund, will see the rollout of the platform to 8 sites in Belgium by the end of this year. This will make Storo a Top 5 player based on surface area, with the five largest players only having 40% market share.

Operational assets in the Storo portfolio are all performing on or above target, and our plan is to grow the Storo platform. In addition to 5 operational sites, Storo has 3 sites under construction and another 8 have been secured and are in the process of permitting. Storo has established a targeted expansion plan and pipeline to double the number of sites in Belgium in the next 3 years.

Based on the successful experience in Belgium and our investments abroad in other segments of convenience real estate, we are now also aiming for international expansion of our storage investments. As a result, we are actively investigating opportunities in storage in markets like Germany, Poland, the Netherlands, France, Spain and Portugal.

We see self storage as a natural fit within Mitiska REIM’s convenience real estate investment approach. It targets the same urban infill locations as retail parks, multi-let light industrial and urban logistics, enabling us to leverage our locations, platform and network, and the team’s expertise across Europe to identify and capitalize on opportunities, each time in partnership with strong local operational management.

A growing investment market

The investment market for self storage remains robust, with a growing number of institutional investors and REITs drawn by the strong cash flow and revenue growth, efficient operating models and attractive yields. Investment volumes in Europe and the UK grew by 4x between 2018 and 2024, from €276 m to €1.2 bn.

Significant repricing and market dislocation, mainly as a result of increased interest rates, makes a compelling entry point for investors according to Heitman, with asset values down 11% from their peak. Additionally, Heitman says that constraints on new development, combined with robust underlying demographic and usage trends, means that self storage enhances portfolio diversification and growth potential. Since demand is hyper-local and driven by a wide range of user cases, self storage has a low correlation with other property types.

The sector has been proven to be both resilient and hyper diversified over a range of economic cycles. This resilience is illustrated by the sector’s outperformance during recessions, with self storage in the more mature US market having outperformed all other sectors of commercial real estate in terms of same-property NOI growth during the previous three recessions (Dot Com, Global Financial Crisis, and COVID-19) and their subsequent three-year recovery periods.

Self storage is hyper diversified through relatively small buildings and a very broad local customer base. At the customer level, the various use cases for self storage help to diversify demand, mitigating exposure to one specific industry or demographic, and with low correlation to the broader real estate market. Due to the relatively small average transaction size within a granular portfolio, and the fact that demand is very localized, performance is driven by a uniquely broad and diverse customer base, virtually eliminating single tenant risk.

With strong historical performance, even through periods of market turmoil, favorable demand and supply dynamics, and inflation resistant characteristics, Heitman says the sector is well positioned for long-term growth.

The impact of technology

Digital management platforms are reshaping the self storage sector according to Savills by streamlining the customer journey through online booking, payment and communication tools, while also enabling remote site management and leaner staffing models. Technology-enabled security systems, including smart access controls and digital surveillance, are being widely adopted to enhance both operational efficiency and customer confidence.

The Storo platform, for example, enables customers to complete their entire self storage journey online, by offering customers a unique digital booking and onboarding process, a keyless system for units managed on an app and a fully digital automated service. By capturing all this data, Storo is able to continually improve its sales and operations, reduce costs by operating unmanned facilities, and use its proprietary AI-based dynamic pricing model to deliver above sector EBITDA margins.

Savills says they are seeing high-quality, modern premium facilities perform strongly and out-position older stock in certain markets, which is beginning to create a more two-tier landscape for operators and customers.

The self storage sector has proven its resilience across a wide range of macroeconomic conditions, delivering stable occupancy and continued rental growth even as wider economic performance has weakened, underscoring the strength of the asset class.

More mature markets such as the UK and US provide a clear view of the sector’s long-term capacity in Europe, and we at Mitiska REIM believe that the current early-stage opportunities in next-generation storage present a compelling opportunity to unlock value in this dynamic and growing sector of real estate.

Links to market reports referenced in this blog:

• Heitman – Niche to Necessity: The Next Chapter of Self-Storage
• Savills UK & European Self-Storage H1 2025 Roundup
• Savills UK & European Self Storage Spotlight: Technology, Scale and Institutionalisation

Past performance is no guarantee of future results. Mitiska REIM is a licensed alternative investment fund manager under the Belgian 2014 AIFM Law. Mitiska REIM acts in its capacity as fund manager (AIFM) of MEREP Light Industrial, MEREP 3, M3CC, M3GC and FRP, and fund advisor of FRI and FRI 2.