SELF-STORAGE is the next big thing that investors in commercial property are snapping up in Asia, says a new report by global property adviser CBRE.
"The self-storage industry is rapidly expanding in Asia, fulfilling market demand for more storage space," it said in a recent report.
"Consumer demand is strong, due to a range of drivers such as disruptive life events, urbanisation and changes in business activity, with cities such as Tokyo, Hong Kong and Singapore leading the trend."
Self-storage is an industry in which customers rent units for storage purposes, and these are usually leased for a short period.
Investors are becoming more interested in self-storage as an alternative asset class, as seen in the success of the recent Self-Storage Expo Asia, which attracted about 200 participants, CBRE added.
Mr Darren Benson, CBRE Asia's executive director of industrial and logistics, said: "The improving sentiment is also reflected by the multiple self-storage investment deals we've seen over the last couple of years and the increase of interest from global real estate funds."
CBRE noted that self-storage demand is usually triggered by four disruptive life events - death, divorce, downsizing, and dislocation caused by job changes or marriage for instance - and business activity.
The report said that in Hong Kong, Singapore and Tokyo, consumer demand driven by these four factors and business demand from expanding offices are "healthy and growing".
Mr Benson said: "The outlook for the self-storage sector in Asia is positive - especially in Hong Kong, Singapore and Tokyo - as demographic trends and robust office and e-commerce expansion are supporting growth."
The report found that with an estimated 1.5 million sq ft of rentable self-storage space in Singapore for instance, there is a shortfall in self-storage space, as is the case in Hong Kong and Tokyo.
The self-storage per household for Singapore is 1.3 sq ft, much smaller than the United States' 21.62 sq ft per household despite the latter having a much larger living space.
Mr Jonathan Hsu, CBRE Asia Pacific's head of occupier markets research, said that despite the opportunities, this sector has three key risks - overall awareness of self-storage; the scarcity of suitably located and priced properties; and short leases and land tenure in Asia.
He noted: "Given the lack of available properties to convert and the lower awareness of self-storage in Asia, the organic expansion of self-storage, despite the strong demand, will remain challenging in the short term."
He believed there will be "a consolidation of players to create scale in multiple markets".