Since the pandemic period, the self storage market in Australia & New Zealand saw a significant surge in storage fees, occupancy rates, and development activity. This upturn reflects growing demand for storage solutions amid shifting consumer behaviours and a challenging environment. And in response to growing demand, the self storage supply pipeline increased by a whopping 80% across 2024.
A similar trend occurred in the USA. As highlighted in a recent New York Times article by Martha C. White, “Americans went all-in on self-storage. That demand is suddenly cooling”.
The article explores how demand for self storage in the United States increased significantly during and post pandemic, and how the market is now beginning to ‘cool’ just as an increase of new supply has hit the US market.
Martha writes how the U.S. self storage market “added 439 storage facilities annually from 2010 to 2019, according to Yardi Matrix. From 2020 to 2023, that number rose to 735. Last year, 245 self storage construction projects were abandoned, more than double the number from the year before, according to Yardi Matrix.” Martha demonstrates the importance of understanding the demand and supply risks, and to consider the challenges of development feasibility in the current market.
Is the Australia and New Zealand market heading in the same direction? To explore this, it’s worth comparing the two markets in the context of self storage.
Size and Maturity
The United States boasts the largest self storage market globally, with an estimated 52,300 self storage facilities, a supply rate of 6.2 square feet per capita and approximately $40 billion in total revenue. When compared to the ANZ self storage market, it is estimated that there are approximately 3,300 existing self storage facilities, with a supply rate of 2.5 square feet per capita and approximately $2 billion in total revenue.
In simple terms, there is 2.5 times as much supply in the U.S. market per head of population than there is in the ANZ market.
This demonstrates the significant disparity between the two markets, highlighting the much larger scale and higher penetration rate of self storage facilities in the United States. The U.S. market’s larger market and stronger usage underscore its maturity and the entrenched demand for self storage solutions, while the lower figures in the ANZ market suggests that the storage market is still emerging.
Therefore, the U.S. market is more susceptible to oversupply issues compared to the less saturated ANZ market.
Nevertheless, the ANZ self storage market has witnessed a sharp increase in the development of self storage facilities in recent years. This year (2025), it is forecast that close to double the number of facilities will be delivered when compared to last year (2024) highlighting a sharp uptick in development activity.
Whilst comparing the two markets could suggest that the Australia & New Zealand is an undersupplied market in comparison to the U.S. market, supply is only one side of the equation. Perhaps the more important question to ask is: Is there enough demand for more self storage in our market, and if so, does it come at a price?
Market Performance
The average storage fee rate across the ANZ market as per the 2024 SSAA State of the Industry research was reported at $383 AUD. The comparative average in the U.S. is $258 when converted to AUD. That’s 33% lower.
Therefore, with 2.5 times more supply per capita, the average fee rate in the United States is only 67% of what is being achieved in our market. Does this mean that more supply in ANZ will translate to lower fee rates?
The answer is, possibly; it will depend on how much new self storage supply comes into our market, and how quickly it occurs. Considered supply is added to markets that have an undersupply of self storage relative to the underlying level of demand. This supply can be good supply, as it offers a solution to the market, and generally increases the awareness amongst the population. Unconsidered supply is added when other uses have been discounted. For example, repurposing a building that no longer suits its purpose, or where demand no longer exists for the originally intended use. Unconsidered supply is often not responding to demand and can be reckless when the appropriate research into the catchment has not been undertaken.
Another important consideration is the increased cost of construction and financing. We have observed some developers and new entrants ‘modelling’ inflated revenue projections into feasibility studies to get the project to ‘stack up’. This is extremely dangerous in an already delicate market, which is sure to lead to issues in the future.
Given these challenges, it’s crucial for self storage developers and operators to deeply understand the demand and supply dynamics of their catchment. This insight is essential for project viability, it can be very useful to assist with identifying target markets, and it supports considered new supply which helps to avoid market saturation.
By understanding the demographic makeup of a target market, coupled with new existing and new supply statistics, developers and operators can get clarity into the supply landscape and demand drivers of a specific catchment and they can tailor their storage offering to meet specific needs and preferences. Further, a thorough understanding of demand and supply dynamics helps to avoid market saturation and supports the longevity of a healthy storage market.
Four Leaves can assist with supply and demand studies. In fact, it’s one of our specialties. Contact us for more information.
Max Mahoney | Senior Consultant / Negotiator, Four Leaves Property
Max is a self storage specialist with deep industry experience in providing advice, valuations, and sale strategy. He combines market insights with strategic thinking to help clients make confident, well-informed decisions for the best outcomes.
