Self-storage market in Dubai: Existing size, opportunities, and innovation
In general, the city of Dubai and the UAE are seeing major real estate bounce back that came faster than expected(1). Strong fundamentals and new laws seem to be the causal factors. As people continue to work, learn, and move in a rapidly digitizing world, the new ways of working and living are energizing a few verticals and segments. One of these is the self-storage market, which is experiencing a resurrection of sorts due to high economic activity.
Its fortunes in the UAE are no different. Regional players are emerging in the UAE, Bahrain, and Qatar within the self-storage market. Overall, this segment offers a positive outlook from a real estate investment perspective. Rapid lifestyle changes brought on after the pandemic — such as people shifting to work-from-home and putting off major decisions such as moving homes during an uncertain period — are fuelling the demand for external storage.
After an unprecedented year rocked by uncertainties, self-storage facilities present a rather dependable alternative asset class that can offset the risk to a huge degree. Technology, urbanisation, expanding consumer markets, household wealth, and overall access to more ‘things’ are all reasons that are shaping the segment internationally and in the local market too. Technology is also playing a key role in optimizing niche property types like self-storage facilities. According to an article(2) by Citiscape Intelligence, myriads of institutional investors are diversifying real estate assets and focusing on alternative asset classes like warehousing, which houses self-storage units.
According to research(3) that looked at investments in 54 countries, the need for niche properties like self-storage facilities and data centres is growing. Self-storage properties performed well in 2021, compared to other asset classes within the real estate sector. Despite the worldwide health crisis, these properties have shown great resilience.
Space for new players to emerge
According to experts(4), now is the best time to purchase properties in the real estate market in Dubai. And with the sector poised for steady growth, there is still room for new players to emerge and offer alternative storage solutions to mid-to-small sized businesses and end-consumers looking to store official items or things that hold great business and sentimental value. This potential is more pronounced in Dubai because of the typically smaller housing units and growing millennial families.
Other factors such as macro-economic elements and inflation also tend to play a key role. Technology is also a driving force behind the significant adoption of self-storage within local communities, by offering touchless rentals and access to storage facilities without the need for human intervention. This involves the seamless blending of self-serving kiosks, call centres, websites, apps, etc., which are providing an exceptional digital experience and leading to secure storage systems.
Looking at the bigger picture, owners, operators, and investors within the self-storage sector have reasons to believe that technology is a value-adding factor. It differentiates an offering in terms of convenience, service, and more, playing a key role in growing the bottom-line for self-storage facilities. Right now, it seems like a great time to look at different real estate assets, including warehousing for self-storage, as the segment is showing all signs of continuous growth, which is likely to continue throughout 2022.