The self-storage industry in Australia has been on a steady upward trajectory and for good reason. With more people downsizing their homes, businesses needing extra space and a general shift in how we live and work, the demand for storage solutions isn’t going away anytime soon. In fact, the industry is estimated to be worth $2 billion annually according to the latest Self-Storage Association of Australia (SSAA) State of the Industry Report. 

According to this SSAA report released late in 2024, there are currently 2,543 self-storage facilities in Australia, housing 573,000 storage units and spanning over 5.85 million square metres of storage space. Occupancy rates average close to 90 per cent and 250 new self-storage developments worth close to a further $2 billion are expected to come online in the next three years. 

While large players like Kennards, Self Storage and National Storage dominate parts of the market, independent operators still hold just over 50% of the total net storage area in the country, proving there’s room for both big and small investors looking to diversify their portfolios.

These self-storage units come in different sizes, cater to short- and long-term needs and provide a hassle-free way to store everything from household items to business inventory, vehicles and even sentimental belongings, often on a month-to-month arrangement.

For investors, the real appeal of self-storage lies in its low-maintenance nature. Unlike residential or other commercial rentals, there are no tenant complaints about broken appliances or demands for costly upgrades. Instead, facilities operate with a high volume of renters on flexible month-to-month leases, ensuring a steady and reliable cash flow with minimal hassle. 

Beyond rental income, owners can tap into multiple revenue streams, including premium services like 24/7 access, insurance, individually alarmed units and moving essentials. Additional offerings like forklifts, packing supplies and vehicle hire (trucks, utes, vans, or trailers), further enhance profitability, making self-storage an attractive investment option.

Not all self-storage units are the same and investors can target different markets depending on location and demand. Climate controlled storage is ideal for wine, pharmaceuticals and valuable furniture that needs protection from temperature and humidity changes.

Drive-up storage is the classic outdoor option where people can park right in front of their unit to store things like cars, boats and caravans, while indoor storage is found in large, often multi-level warehouses that range from small lockers to oversized units. Mobile storage is a newer concept where storage containers are delivered to customers, packed on-site and then taken to a secure facility.

What makes self-storage a smart investment?

Self-storage is a smart investment due to its consistently high demand, with occupancy rates averaging close to 90 per cent and rental rates around $380 per square metre annually. Unlike other real estate assets, maintenance costs are significantly lower, as facilities require minimal upkeep and don’t involve high-maintenance tenants or costly renovations. 

Self-storage investments offer stable and diverse income streams, ensuring steady cash flow even if a tenant vacates, as many others remain. Beyond rental income, facilities can boost revenue through late fees, admin charges, and premium add-ons like 24/7 access, climate control, and enhanced security. The flexibility of monthly leases allows pricing adjustments based on seasonal demand, while auctions of abandoned goods help recover lost income from defaults. Most importantly, self-storage has proven resilient during economic downturns, thriving even during the pandemic—reinforcing its reliability as a strong investment.

Of course, no property investment is completely risk-free and self-storage comes with its own set of hurdles, particularly around planning and compliance. Zoning restrictions can be a major challenge, as not every piece of land is suitable for self-storage and council regulations can be strict. Securing development approvals is another obstacle, often requiring extensive environmental assessments, traffic considerations and community feedback before receiving the green light. Additionally, facilities must meet rigorous fire safety and security compliance standards, including CCTV surveillance, sprinkler systems and controlled access. 

Despite the strong outlook, investors should carefully consider a few risks before diving in. A high initial investment is required, as land acquisition, construction and security measures demand significant upfront capital. Market saturation is another concern, particularly in some urban areas where an oversupply of facilities can drive down rental prices. Competition from large operators also poses a challenge, as big-name brands have strong marketing power and established customer trust, making it harder for smaller facilities to compete. Additionally, the increasing reliance on automation and technology adds to both initial and ongoing costs, with modern storage facilities requiring automated booking systems, security access and climate control features to stay competitive.

Success starts with choosing the right location, as regional areas and fast-growing suburbs often have high demand, with lower supply, while densely populated city centres have high demand, with saturated supply. Offering value-added services can also set a facility apart, with features like vehicle storage, climate-controlled units and business storage solutions attracting premium customers. 

Many upgrades in security, technology, automation, and renovations to units and communal areas are tax-deductible. Maximising tax depreciation is essential for boosting cash flow. Engaging specialised quantity surveyors like BMT Tax Depreciation can help identify deductible assets, reduce taxable income, and enhance investment returns.

The Future of Self-Storage in Australia

The industry is only set to grow. Along Australia’s east coast, demand is particularly strong, with 62 new facilities expected in 2025 and another 164 in earlier stages of approval, adding over 1.3 million square metres of net storage space in NSW alone, according to the SSAA.

With market yields between 5 per cent and 6.5 per cent and some prime assets reaching 10 per cent, self-storage has outperformed many traditional property investments. 

For investors seeking a low-maintenance, high-yield asset, self-storage is a solid option. While it requires careful planning and a good grasp of market demand, the potential for strong, stable returns makes it a worthwhile addition to any investment portfolio. 

If you would like more information on the potential for property depreciation on self-storage units contact BMT Tax Depreciation on 1300 728 726 or request a quote.

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