Supporting the growing demand for Self Storage

As business and industrial activity in East Africa has picked up, real estate developers are setting their sights on the warehousing and self storage markets. With significant growth and scale in developed market for self storage, East Africa remains one of the final frontiers for the industry. Sunbird has been investigating the market opportunity of starting a storage services business in Kenya, with the ability to roll-out to the rest of Eastern and Southern Africa. Using our research, we have uncovered 5 key markets for self-storage, each with an increasing operational complexity. These are as follows:

- Business-to-Customer (B2C) self-storage

- Business-to-Business (B2B) self-storage

- Business-to-Business (B2B) serviced solutions

- Specialist document/data handling & storage

- Large retail & distribution

Sunbird has two preferred approaches to self-storage: Multi-Modal and B2B Self Storage.

Multi-Modal

A multi-modal system is a flexible facility that can cater to different types of customers according to demand. Such a facility could include heavy goods access, self-storage units, and document storage. Such a proposition would revolve around flexibility of tenure, high standards, and excellent levels of security. Such diversification would significantly de-risk any given project given the immature and unpenetrated storage market in East Africa.

B2B Self-Storage

Such a system refers to commercial storage facilities for small to medium-size enterprises with targets being cross-sector. Sunbird has identified Kenya's large not-for-profit sector comprising of the UN, diplomatic and NGO communities. Kenya has more than 12,000 NGO workers living and working in the country and the one of the four major global UN offices is situated in Gigiri. In addition to demand from the British High Commission, the sector has created a significant market opportunity for self-storage providers that provide both storage and relocation services.

The Case for Self Storage in Kenya

According to data from Inside Self Storage, there are several economic and commercial indicators that suggest the signs are encouraging for a market for self-storage in Kenya:

Growing addressable market - 45% of the market can be considered "middle-class" with incomes over $1,136 in GDP per Capita.

Rapid urbanisation - According to data from African Development Bank, the population of Nairobi will grow to over 6.25m people, the second fastest growing city in Africa.

Construction Inventory - Inventory for construction grew in Nairobi by approximately 2.7m square metres, of which over 1.5m square metres was residential.

Returning Diaspora - There are an estimated 3m Kenyan studying and living abroad, however, they remain connected to their home country, with over $100m remitted back to Kenya every month.

Diplomatic and Expat Communities - There are over 350,000 registered NGO's in Kenya. Over 40,000 people work for the various UN agencies in Kenya.

Boom in number of SME's - There are approximately 7.5m registered small-to-medium size enterprises in Kenya. The number of registered companies in Kenya has doubled between 2010 and 2015.

With a growing middle-class population in Kenya, people are able to afford more with a greater disposable income. There are a growing number of businesses setting up, with a greater number of NGO's and registered charities in Kenya. Self-storage services are required for both households and businesses, and we believe the market is available right now to become a pre-eminent provider of self-storage facilities in Kenya, along with the rest of East Africa.