Thinking of Buying a Self-Storage Business in Australia? Here Are 3 Vital Questions to Ask

The Australian self-storage industry is experiencing solid growth, with over 1,800 facilities nationwide catering to both residential and commercial customers.

Approximately 10% of Australian households currently utilise self-storage, and the industry is projected to grow 3.5% annually through 2027.

The demand is fuelled by urbanisation, rising e-commerce activity, and shrinking living spaces, making self-storage a resilient and lucrative investment.

However, increasing competition, operational costs, and changing customer preferences mean prospective buyers must evaluate their purchase carefully.

1. Is the Financial Health of the Business Sustainable?

Why It Matters:

While self-storage businesses boast low operating costs (30-40% of revenue) and a recurring revenue model, profitability is under pressure from rising rental costs, increasing competition, and technology investments.

The average occupancy rate in Australia is 83%, with well-run facilities in major cities operating at over 90%.

However, intense price competition in generic storage services may narrow profit margins, making financial diligence critical.

What to Check:

• Occupancy Rates & Trends – Request reports for the last 2-3 years to assess demand stability.
  
  
• Revenue Breakdown – Understand income streams (e.g., storage units, vehicle storage, business storage, add-ons like insurance).
  
  
• Operational Costs vs. Revenue – Review financials to ensure costs don’t exceed 40% of total revenue.
  
  
• Profit Margins & Growth Potential – Identify value-added services (climate-controlled units, mobile storage) that can sustain profitability.

2. How Competitive is the Location and Market Position?

Why It Matters:

Location can make or break a self-storage business.

Facilities near major urban centres, highways, or commercial hubs benefit from high visibility and demand.

In contrast, oversaturated markets or poor accessibility can lead to lower occupancy rates. With urbanisation driving demand, proximity to apartment-heavy suburbs is a key factor.

What to Check:

• Local Market Demand & Competition – Is there an oversupply of storage units? Check occupancy rates of nearby competitors.
  
  
• Accessibility & Visibility – Is the facility easily accessible by major roads and transport links?
  
  
• Zoning & Expansion Potential – Are there restrictions on expanding the facility? Is additional land available for growth?
  
  
• Competitive Differentiation – Does the facility offer unique services (e.g., climate-controlled units, mobile storage) that competitors lack?

3. Is the Operational Model Aligned with Industry Trends?

Why It Matters:

The self-storage industry is evolving rapidly. 

Technology, automation, and value-added services are key to staying competitive.

Facilities without modern security, online booking, and automation risk falling behind.

Additionally, climate-controlled and mobile storage are growing sectors, offering premium pricing opportunities.

What to Check:

• Technology Integration – Does the facility have automated security, digital access, and online booking/payment systems?
  
  
• Facility Condition & Maintenance – Are security systems, climate control, and infrastructure up to date?
  
  
• Revenue Diversification – Are there high-margin offerings like business storage, mobile units, or climate-controlled spaces?
  
  
• Customer Preferences & Retention – Are tenants long-term or short-term? What’s the tenant turnover rate?

Ready to Invest in a Thriving Self-Storage Business?

With strong demand, recurring revenue, and scalable growth opportunities, the Australian self-storage market presents an attractive business opportunity.

However, success depends on financial stability, strategic location, and operational efficiency.

For a more comprehensive exploration of this opportunity, read the full article here: Your Guide to Buying a Self-Storage Business.