Storefriendly Singapore CEO Jes Johansen Discusses Self-Storage with The Straits Times

January 5, 2025
Storefriendly Singapore CEO Jes Johansen Discusses Self-Storage with The Straits Times
  • Singapore's self-storage demand is driven by factors like limited living spaces, business needs for cost-effective storage, and e-commerce growth, with occupancy rates reaching 82%, surpassing the Asia-Pacific average.
  • Storefriendly leads the market with innovative, personalised storage solutions for individuals and businesses, offering accessible locations with modern amenities. It aims to expand capacity and capture 20% market share.
  • Despite challenges from JTC regulatory reviews and limited industrial land, Storefriendly, with the least exposure to JTC sites among operators, continues to act as industry leader to actively engages in dialogue with stakeholders to ensure balanced growth and industry sustainability.
Storefriendly CEO Jes Johansen with the company's robots, which are able to move storage units to terminals where users can access them.

SINGAPORE – Toy collector Jian Yang lives in a 1,050 sq ft two-bedroom single-storey terrace house, but it is far from sufficient to house his collection of 13,000 Barbie dolls.

To manage the overflow, Mr Yang rents two storage units at a facility in Eunos, where over 1,000 dolls are kept.

“I built my house around my collection, but space ran out,” Mr Yang told The Straits Times.

The 45-year-old, who runs an advertising agency, was one of the first customers to rent a storage space at Storefriendly when it opened its flagship store in Eunos Avenue 3 in 2019. He pays less than $1,000 a month.

Mr Yang is part of a growing wave of individuals and businesses driving a boom in demand for self-storage services here.

Originally catering to relocators seeking temporary space for household items, the industry now serves diverse needs – from collectors like Mr Yang to businesses leveraging storage as a cost-effective alternative to larger premises.

Unlike warehouses that typically store bulk items or fast-moving consumer goods, Storefriendly focuses on providing personalised storage solutions for individuals and businesses, said its chief executive Jes Johansen.

“We’re about storing your barang-barang, your personal items,” said Mr Johansen, stressing that self-storage is way different from the traditional concept of warehousing.

The goal is to offer convenient, accessible storage spaces near where customers live or work, complemented by added amenities such as air-conditioning, security features and racking systems, he added.

For businesses, Storefriendly, which has seven branches in Singapore, also provides work-friendly features that include Wi-Fi, meeting rooms, and areas for live streaming or customer interactions.

Mr Johansen explained that the shift to cater to businesses, which took place about two years ago, transformed storage from a passive service – where items are stored and forgotten – into an active one, where stored items are regularly accessed and integrated into daily life or business operations.

He plans to double Storefriendly’s storage capacity in the next two years, aiming to capture 20 per cent of the market share.

An annual survey report by real estate and investment management company JLL for Self Storage Association Asia (SSAA) noted that self-storage operators in Singapore saw a 14 per cent increase in demand from business users who now make up 40 per cent of their customers, up from 26 per cent in 2023.

The other 60 per cent are individual users.

In Malaysia and Hong Kong, the household-to-business ratio for self-storage usage has consistently remained around 70 per cent to 30 per cent, noted the report.

Singapore’s market has seen occupancy rates climb to 82 per cent, surpassing the Asia-Pacific average of 80 per cent, said Mr Peter Guevarra, JLL’s Asia-Pacific director of research consultancy.

“Several factors are driving this growth, including rising housing costs, increased awareness of self-storage solutions and the expansion of e-commerce. These trends have encouraged self-storage operators to expand their facilities to meet the growing demand, which in turn has bolstered investor confidence in the sector,” said Mr Guevarra.

He added that while rental rates for self-storage units in Singapore have seen a modest increase of about 2 per cent, they are slightly below the Asia-Pacific average of 2.7 per cent, indicating a healthy market with steady demand.

And to cater to the expanding business segment, self-storage operators are diversifying their offerings with value-added services, such as small package delivery and pick-and-pack services.

Technology adoption is another key strategy for boosting occupancy rates.

In December 2023, StorHub, a pioneer and Singapore’s largest self-storage operator, introduced online booking for all its 18 facilities here, said Ms Georgina Zhou, chief marketing officer of StorHub Group.

Ms Zhou added that StorHub has over 2.1 million sq ft in gross floor area and close to 20,000 units, with general occupancy rate over 82 per cent. It posted a 5 per cent year-on-year growth from 2023 to 2024 in the number of customers for self-storage units.

Savills Singapore’s executive director of research and consultancy Alan Cheong expects self-storage facilities to gain even greater traction in the next five years, as they meet the need for small space that traditional warehouse operators would not come down to.

He also pointed out that the high attrition rate among businesses could create demand for self-storage space.

That is “because businesses that cease operations but whose owners still want to remain in the game will need space to temporarily store both equipment and possibly unsold inventory”.

SSAA chairwoman Helen Ng, however, said that the industry faces challenges, particularly from regulatory reviews.

There are eight self-storage member operators under the SSAA and at least four more independent operators.

Ms Ng, who is also the CEO of General Storage Company, which runs 14 Lock+Store facilities in Singapore, said plans to expand have been put on hold following JTC Corporation’s review that started about three years ago.

JTC, which manages more than 80 per cent of industrial land, periodically reviews policies on the use of its industrial land and space in line with the evolving industrial and business landscapes.

This is to ensure that Singapore’s industrial land continues to serve manufacturing needs while balancing increasing demand from self-storage players to operate on JTC sites, said its spokeswoman in response to queries from ST.

The statutory board is now reviewing the longer-term potential impact of upping the supply of self-storage facilities, given limited industrial land.

The spokeswoman added that JTC has been engaging the SSAA and its members in several dialogue sessions to seek feedback.

Ms Ng pointed out that with limited industrial space, the outcome of JTC’s review will significantly influence the sector’s trajectory.

Higher operating costs or lease renewal challenges at JTC sites could threaten the viability of storage services and disrupt operations at these locations, said Ms Ng.

“This uncertainty poses challenges for both micro businesses and self-storage operators, who employ a predominantly Singaporean workforce. Any closures could have wider repercussions, affecting not only businesses, but also livelihoods. We hope for a balanced outcome that supports all stakeholders,” she said.

JTC plans to share the outcome of its review by March 2025.

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Original article by Joyce Lim at The Strait Times: https://www.straitstimes.com/singapore/self-storage-industry-sees-rapid-growth-amid-rising-demand-for-flexible-space-solutions