stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Storage wars escalate with on-demand delivery
space
As living spaces dwindle in size, a move to find places for all the 'stuff'
space
By SHANE DINGMAN
  
  

Email this article Print this article
Friday, June 15, 2018 – Page H5

TORONTO -- Whether you're downsizing or have found your living space can no longer accommodate your growing hoard of gear, Canadians haven't had much in the way of options for self-storage until recently.

Where once your only option was to schlep a couple van-loads of boxes to a dingy warehouse in an industrial wasteland, the selfstorage industry is experimenting with new on-demand and service-oriented ideas to destress your decluttering.

Even though storage is a huge market in North America (estimates range between $20-billion and almost $40-billion in revenue), it's also incredibly fragmented. There are roughly 3,000 self-storage facilities in Canada, and the largest five operators own just 10 per cent of the market, according to David Allan, vice-president of development at family-owned Apple Self Storage and also the president of the Canadian Self Storage Association.

While most of the storage operators are private companies, the financials of Canada's largest player, publicly traded StorageVault Canada Inc., give a sense of the industry dynamics. In 2017, StorageVault spent $485-million to acquire a total of 42 new selfstorage facilities - the largest purchase was a $396-million deal to swallow 24 locations from Sentinal Self Storage - bringing StorageVault's total to 90 owned and 148 managed lots under multiple brands across Canada. That portfolio earned $61.9-million in revenue in 2017 and the company expects to spend another $90million on acquisitions in 2018.

Still, the vast majority of storage sites are what you might call hobby storage, according to Mr.

Allan; a small number of lockers attached to an ancillary business.

There's only about 150 "investment-grade" facilities left to be bought up, he says, and with land prices and acquisition prices so high, industry players are rolling out new models to differentiate on service instead of just cost and location.

Mr. Allan has a list of 50 companies that have tried and failed to launch the concept of "valet storage" where condo dwellers can store as little as a movingbox worth of stuff and access it on demand (his own company piloted the idea and recently abandoned it). But while the idea has been kicking around in the United States and Britain since at least 2008, one of the longestlasting Canadian options is Vancouver-based Alluster, founded in 2015 and expanded to Calgary and Toronto the past year. According to Alluster chief executive Rob Buchanan, this more flexible storage option has seen triple-digit customer growth.

Alluster's prices scale up or down depending on if you have four boxes or four couches you need to get out of your home.

The service is built on convenience but it has trade-offs to traditional storage: The pickups or returns happen within 24 hours of request and each time, it costs you $25. Also, you're not allowed to visit their warehouse, which means you can't go access your junk at a moment's notice. There are very cheap prices for small amounts of storage: $10 a month for smallish items (such as a bicycle, suitcase or crate of Halloween decorations), but if you have an existing locker you'll find you're paying a premium (for example, Apple Self Storage's Erindale site in Mississauga charges $128 for a five-by-ninefoot locker while Alluster charges $143 a month for the equivalent five-by-10-foot space).

"You need to take a look at the value you're getting," Mr. Buchanan said. "You don't have to haul the stuff yourself or invite your sweaty friends and bribe them with pizza. Who wants to move a sofa into a storage unit?" He's also seen a lot of local competitors try and fail to copy the model: "A lot of people try to do this and don't realize how much hard work it is."

Mr. Buchanan's outfit also needs far less space for his operations, which means he's not in the capital-intensive real estate business like most of the storage industry.

Mr. Allan's critique of valet storage is that it doesn't fit the needs of most storage customers, who he says store things for one of the four "D" reasons: death, disaster, divorce and dislocation.

Those people need storage immediately, and they are motivated by price and availability.

Stephen Creighton, senior vice-president with the Dymon Group of Companies, represents the other way storage is evolving behind those four Ds, by going upscale in terms of services offered on-site.

More than 40 per cent of its customers are businesses that make use of flexible storage options, sheltered drive-in loading docks, free moving trucks and on-site amenities including office space and meeting rooms.

"We are continuing to evolve the storage offering, we've got shredding services and parcel pickup, mailboxes, a vault, we have a lot of services," Mr. Creighton said.

Over the past 12 years, Dymon's storage concept has captured more than 80 per cent of the Ottawa-area's storage market with big, brightly lit and multipurpose storage "stores."

Dymon is also in the middle of a massive assault on the Greater Toronto Area market; it's planning on adding 10 to 15 million square feet of new storage to the GTA in the next six to 10 years, spread across as many as 80 facilities. One concept under construction is a massive 500,000square-foot showstopper in Etobicoke, and others in Oakville and Oshawa are more like 150,000 square feet and can be hidden away inside a mixed-use residential complex. Mr. Creighton says it takes a population of 50,00070,000 people to support one of its facilities, and from Hamilton, to Barrie, to Whitby, the GTA has more than six million potential customers. That Etobicoke megastore will also include a special wine cellar with on-site sommelier and a tasting lounge. A far cry from the parking lot surrounded by chain link fence typical of traditional suburban and rural storage sites.

"They are doing something nobody else can figure out or replicate; it's a very expensive product but they aren't charging more for it," Mr. Allan says.

Mr. Creighton says the companies economies of scale let it offer "Ritz Carlton" level service for storing your velvet portraits and vintage skateboard deck collections with rates at an industrystandard Motel 6-level price.

Mr. Allan's worry is that some of the new players could flood the storage market based on rosy assumptions of customer growth continuing forever. "You're having a lot of newcomers come to the market to pay prices we haven't seen. They are assuming they can fill them up faster at rates than we think they can do," he said. "We don't know exactly how that's going to shake out."

Associated Graphic

Vancouver-based Alluster's storage-services business is all about convenience, a strategy that CEO Rob Buchanan says has led to triple-digit customer growth.

ALLUSTER.COM


Huh? How did I get here?
Return to Main Lorne_Rubenstein Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page