self storage europe in the eastern european countries › media › 1516 › 2016focuseuvol3.pdf ·...

Volume 3, 2016

EUROPESelf storage

in the Eastern European countries

Hong Kong Self Storage Fire

EasyBox is in the family way...again!

3Self Storage Europe – Volume 3, 2016

It seems that every time I sit down to write one of these reports some big event has caused more uncertainty in the

world. This time it is the Brexit decision by the UK public and then the terror attack in Nice. The world really is in a constant state of change

and uncertainty is the new normal.

Once again our thoughts go out to everyone in France as they suffer through yet another terrorist attack. It really is a sad reflection on the world today that so many innocent people are killed and injured in relation to events over which they have no control, from an aggressor trying solely to intimidate us all. The best way to combat this kind of action is to support our French friends and colleagues during this challenging time and not to change our plans for travel or community gatherings. These attacks are designed to disrupt every day people’s lives, to instil fear into us and reduce our freedom of choice. We must call them out for what they are, cowardly attacks on the innocent.

The decision of the UK to leave the European Union took many people by surprise and certainly shook up financial markets in the short term. The chain of events that it unleashed politically in the UK, with a change of Prime Minister, an almost entirely new cabinet and challenges to the opposition leadership, certainly did not help build confidence. However, the initial panic seems to have subsided and the long process of negotiating the exit can begin. From a FEDESSA viewpoint, the UK Association has no plans to leave FEDESSA and this will not change the operation of the Federation. We are open to all self storage operators in Europe, be they in the union or otherwise. The impact on the industry generally in Europe is less clear. It is likely that the Brexit will create a further period of economic uncertainty. However, this industry has shown that it can carry on through periods of economic downturn, having outperformed most other property based industries during the last recession. The industry is more evolved in Europe now than it was in 2008, with greater awareness of the product. This would indicate that we are in an even better position to weather any downturn in economic growth, if it does eventuate. Self storage is a very localised business with a broad depth of customers who use our services for varying reasons, both during prosperity and austerity. There is nothing to indicate that the Brexit decision will have a significant impact on the self storage industry in Europe.

Possibly the most severe fire to occur in a self storage business ever occurred in Hong Kong in June. More details on this fire and the impact it is having on the Hong Kong industry are provided in this issue of Focus. The fire lasted over 4 days and tragically two firefighters were killed. It is a timely reminder to us all to remain vigilant in our own fire protection systems, ensure they are checked regularly and that all staff understand and practice emergency evacuation of the site.

On a more positive note, we are only a couple of months away from the FEDESSA European Conference and Trade show in Barcelona. Registrations are well up on the same time last year and there is only one trade stand left in the trade show, so this really is shaping up to be the biggest FEDESSA conference ever. With translation services on offer for Spanish delegates, we are hoping to have a very strong Spanish delegation in attendance. There are some really top quality speakers on the programme this year, both industry experts and general business speakers who can help you lift your business and improve profits. There is a global feel to the programme with speakers from the USA, South America, Australia and Asia, along with Europe. There is sure to be something for every self storage business owner, operator and investor. I look forward to seeing you all in Barcelona.

To subscribe to the Focus and Self Storage Europe magazine, please contact:

Self Storage Association, Priestley House, The Gullet, Nantwich, Cheshire. CW5 5SZ

Tel: + 44 (0)1270 623 150 Fax: + 44 (0)1270 623 471

e-mail: [email protected]

Editorial: News items and articles on all aspects of the self storage industry are welcomed, and should be sent,

together with photographs if appropriate, to: [email protected]

The SSA UK and FEDESSA, or any of its agents/rep-resentatives/staff, cannot accept any legal liability for the accuracy of the news items and articles contained in the magazine, which have been obtained and are

reproduced in good faith.

Advertising: Advertising enquiries to [email protected]

Printed by Johnsons Printers of Nantwich, Tel: + 44 (0)1270 625 207 e-mail: [email protected]

President’s report 3

Self storage in the Eastern

European countries 4

Easybox is in

the family way...again! 8

Kangu self storage 10

Stokado 12

Euro Mini Storage 14

Hong Kong

Self Storage Fire 17

Cesare Carcano FEDESSA President

PRESIDENT’s Report

Self storage in the Eastern European countriesGrowing economies means opportunities for self storage

The economies of the Central and Eastern European (CEE) countries were among the fastest growing in the World prior to the global financial crisis in 2008. Since they broke loose from the Soviet Union in late 1989 and until the start of the global financial crisis, the CEE countries had established a record of growth and economic progress. Today Poland has become the driving force in that region, however other countries like the Czech Republic are also showing positive development.

4 Self Storage Europe – Volume 3, 2016

Bulgarian image by: nikolay100 / Shutterstock.com

5

continued on page 7...

Self Storage Europe – Volume 3, 2016

Over the last 10 years, Central and Eastern Europe has gone through a tremendous metamorphosis, from a post cold war economy to a very dynamic western influenced economy. In a short time, companies like McDonalds, Ikea, and Starbucks set up business in cities like Warsaw and Prague. Also the people’s behaviour has changed due to an increase in disposable income. In other words, the population started doing things they had not been doing for years, as they could now afford to do so. Buying power increased, optimism about taking on mortgages rose, nice holidays would be booked and home improvements got greater attention. Trends that are further evolving each day. The need for self storage space is evident and growing. Similar to how the industry evolved in Western Europe, initial self storage developments have been in the major cities.

Self storage is still in its infancy in Eastern Europe with Poland having 10 facilities and the Czech Republic just 3. Thanks to TV programmes like “Storage Wars”, most of the Polish people know what self storage is, nevertheless the biggest challenge is to make potential customers familiar with the concept and to build awareness of the benefits of using self storage space to both private and business customers. Many people tend to have a need for self storage, but may not have realised that there are viable solutions.

There is enough reason to believe that there is a large potential for self storage in the CEE countries, but the operators must focus on creating awareness in the population on how to use self storage. There is no reason to believe that self storage will not grow successfully in these markets as it has in other parts of Europe, Asia, Australia and the USA.

PolandIn recent years Poland has become an important and dynamic market, capitalising on its open market economy approach. In May 2004, Poland became a new EU member and it joined NATO five years earlier. With 38 million people, Poland is the largest market among the CEE countries. Openness to global commerce and trade, competitive taxation, and an efficient regulatory system have encouraged a more dynamic and broadly based economic expansion. Today Poland can be considered as being the sixth largest economy in the EU and the CEE region’s strongest economy. Even during the global financial crisis, it showed strong and steady growth and was the only economy in Europe that did not go into recession.

Overall Poland has shown it can ensure competiveness in various industries compared to more established European economies. They have a proven record for ability to adapt to change, good education levels and competitive salaries. For this reason, it would be expected that self storage could show significant growth in Poland in the coming years on account of the positive economic development.

“We believe Poland offers a significant growth potential for

the self storage business, particularly in the larger Polish cities. “, says Klaudiusz Bechcicki, director of Stokado, one of the self storage operators in the region. “We observe increasing demand for smaller lettable areas, as Poles pay more attention to efficient usage of living space. Overall there is a significant supply of newly-built multi-family residential buildings, but storage rooms in these buildings are scarce.

There is also a growing demand among corporate clients, both SMEs and larger businesses, looking

for flexible rentals terms and space adjusted to current needs”.

Nevertheless, if we look at the situation today, the self storage industry in Poland is still in its early phase of development when we compare it to Western European countries.

“Familiarity with the concept of storage units is rather limited, which is the main obstacle to faster industry development.

A lot of people still do not know how they could benefit from self storage. Also the

commercial real estate rental market has a wide offering in larger cities, but these are mostly larger areas

(200 m² and above) or lower quality places like garages and basements. We believe self storage matches the demand in Poland well, but familiarity with this concept needs to be increased”.

It’s not just the economy that has grown in Poland, also the media sector has been evolving in spectacular fashion, which has led to a public and private duopoly. Today, Poland’s broadcasting market is the largest in the CEE region and the third-biggest cable television market in Europe. With the

Over the last 10 years, Central and Eastern

Europe has gone through a tremendous metamorphosis,

from a post cold war economy to a very dynamic western

influenced economy

continued from page 5

7

Self Storage Europe – Volume 3, 2016

state-owned TVP and privately held TVN and Polsat, TV is the leading medium in Poland. A medium that could be used very well to increase awareness about self storage. Radio and internet could naturally also be used as important complementary tools to educate people about the advantages of self storage.

Although all drivers are there for self storage to succeed in Poland there are still difficulties in setting up a self storage business, mainly due to two reasons according to Martyn Dickinson of Janus International. “First of all, it is very difficult to find a good property due to the fact that most of the industrial buildings were built many years ago during times when the country was still under Soviet rule. A lot of these buildings are very bland and utilitarian. Secondly, it is a big challenge to plan and get the local authorities to understand how self storage works”. According to Klaudiusz Bechcicki, there are typical industry entry barriers in Poland, with self storage being a capital intensive business. Although bank financing is generally available in the country, there may be limited financing availability for new entrants, given the lack of understanding of the business by investors and no “proof-of-concept” in the region. There are no significant legal boundaries for a self storage business in Poland. The typical issues to be resolved prior to launch include building permits and fire security approvals, which may be time consuming due to the local authority’s limited experience with self storage.

Due to this limited familiarity with the product generally, a new

store opening may need more time to reach

optimum occupancy rates as compared to an average Western European city. So once again it is all about education!

Bureaucracy and political issues are part of the reason self storage has been so late in developing in these markets

and are likely to continue to impact the growth of the industry in the future. As developing markets

there are clearly opportunities for growth, particularly in the major cities and areas of higher personal wealth and large concentrations of western immigrants and businesses. The challenge is to find suitable real estate that can be purchased or acquired on a long lease hold and dealing with the authorities in developing a business that is not that well known.

City Self-Storage was the first professional self storage operator in Poland, opening its first

Warsaw store in 2006. In 2014 it was purchased by the Canada based self storage operator Less Mess Storage

Inc. For Less Mess this acquisition represented an important first step in building a substantial self storage business in a high growth region with almost zero market penetration. Today they have 5 facilities located in Warsaw and Prague. Having a larger operator like Less Mess in the market helps develop awareness of the product. History has shown us that having operators willing to spend money on marketing and high profile sites helps develop a market and currently operators in Poland and the Czech Republic are doing this more so than other CEE countries. The other operators include Kangu Self-Storage, Fort24 and Stokado, who are all also interested in developing more sites.

If Poland follows the pattern of other self storage markets in Europe, you would expect it to continue to grow and potentially attract more corporate investment. But what about the Brexit? Will it have an impact on the industry in Poland? Since Poland joined the EU in 2004 about two million Poles decided to leave the country to find a higher paid job. Around 850,000 Poles are now living in the UK because they could earn up to four times as much by doing the same job as in their home country. One of the negative implications for Poland could be the return of Polish migrants to their home country, meaning the level of financial transfers sent by Polish immigrants to Poland will be reduced, potentially slowing down the economy. On the other hand, Brexit could also have positive implications for Poland due to the prospect that a number of Poles would return to Poland with experience gained in the competitive UK market. This improved knowledge base would be a positive factor for the Polish economy. This of course is all prefaced on the assumption that Brexit will have a noticeable effect on freedom of movement, which until the details of the exit are negotiated, is all speculation.

While there will always be challenges present either from the economy, local authority or an awareness point of view, it still does not change the view that following self storage development in the region will be very exciting in the months and years to come.

There are no significant legal boundaries for a self storage business in Poland.

The typical issues to be resolved prior to launch

include building permits and fire security approvals



In a previous edition we reported that for the second occasion two of the managers at Easybox (which operates 7 stores in Italy) were marrying each other. The family theme continues as Paul Fahey, President, CEO and majority shareholder has recently been joined in the company by his three daughters Madeline, Miriam and Naomi.Madeline was until recently a real estate lawyer with Druces, one of the oldest law firms in the City of London and has joined Easybox as a director working in Milan.

Madeline heads up the company’s national call centre at its Milan HQ as well as being responsible for overseeing its HR and legal functions.

Like Miriam and Naomi after her, Madeline, whilst a student, was a part time duty manager at BiG Storage based in the North West of England and recently sold to Big Yellow. Paul ensured the girls’ experience of the sector was further embellished by arranging for each to work for a period with StorageMart based in the US and Canada. The experience of working in a 170 store business in North America provided the girls with a very different perspective on operating self storage than in the emerging European market.

Madeline said “I am delighted to have joined a vibrant team here at Easybox at a time when we are implementing innovative practices to improve the performance of the business. In particular the newly formed national call centre. Uniquely the call centre incorporates the central video station sales and operational team dealing directly with customers in store. It therefore provides back-up/support to our store managers during manned operational hours and store cover in off-peak unmanned hours of store operation. Having had experience working at the largest self storage call centre in the world based in the USA, it has been great to develop and refine their processes for the European market in our call centre here in Milan”.

Miriam has joined Easybox from the corporate finance sector having worked previously for Cantor Fitzgerald in London, an American Investment bank. Miriam’s achieved a first class degree in Economics and a Masters at the London School of Economics and unsurprisingly her role is centred on finance and data/performance analysis. As Miriam also has past general sector experience, her role incorporates working on a variety of performance improvement projects both for Easybox and occasionally for FlexiSpace, Paul’s UK based self storage

business.

Miriam said of her new role “Despite my dad’s extensive experience in the sector I have been

delighted to teach him a thing or two in my short time in the business! Sophisticated KPIs are essential to the constant effort to drive improved performance in every area of the business. I am pleased that I have completed my first challenge, having expanded and overhauled our suite of key performance measures, which has provided the management team with a more complete view of a large variety of

performance areas.”

“Unlike my past role in corporate finance which was largely numbers based, I am enjoying being involved

hands-on in the development of sales and operational practices therefore helping to improve the numbers as opposed to just producing them.”

Naomi, having recently graduated from Newcastle University’s Business School, is currently working on an internship at Easybox, but plans to travel to Australia and New Zealand shortly. Although the travelling will be mixed with some Australian self storage work experience, if “dad” has anything to do with it.

Paul said of his daughters’ recent move into the business from the UK “I am not quite sure why the 3 girls were delighted to join Easybox, possibly their love of self storage, possibly they wanted to work alongside their “dad”, or just possibly it was that Milan has the best choice of ladies fashion wear in Europe? I think I have a good idea which it was!

I am not quite sure

why the 3 girls were delighted

to join Easybox, possibly

it was that Milan has the best

choice of ladies fashion

wear in Europe?

EasyBox is in the family way...again!


Kangu Self Storage opened its first store in Poznan in April 2011 and it was also one of the first storage facilities in Poland. Two years later, in March 2013, they opened their Wroclaw facility. Followed by one in Szczecin in 2015 and the latest one in Warsaw on the 22nd of June this year. They hope to expand their network by opening new facilities in cities with more than 300,000 residents that have higher than average wages. The mobility of residents (moves, renovations etc.) is also very important in their location decision.

´

Kangu Self storage


But how easy is it to set up a self storage business in Poland? While there are different

views on how difficult it is to set up a self storage business, all agree to that there are several barriers to

overcome.

“It is easy to start a storage business on the Polish market. Usually it works through leasing properties or a partnership. Small buildings up to 800 m² are very easy to obtain. It is more difficult with buildings bigger than 1000 m² or store buildings. There are very few properties that are adapted to such activities and the cost of adapting a large object is high “, says Przemek Główczewski, Director of Kangu Self Storage.

The opening of the first two self storage facilities have turned out to be very successful. Both facilities today have an occupancy that varies from 80 – 90%. Based on the success of these two facilities, their next sites were significantly larger with their latest facility at Warsaw offering 650 units. All the units in their facilities vary from 1 m² to 23 m², with heights from 2 to 3 meters.

Across the portfolio 63% of customers are individuals and

37% commercial. The company provides 24/7 access and security system (CCTV), free parking, top-quality moving and storage supplies, free platform trucks and individual insurance policies. Furthermore, they also offer customers the possibility to send and receive mail and parcels to the self

storage facility. All their buildings are also adapted for disabled people. The offices are manned Monday –

Friday 9am to 5pm each day.

Kangu Self Storage mainly uses the internet to promote their business (sponsored articles, blog, Facebook etc.). In addition, they advertise through billboards, radio campaigns in Szczecin and have their company mascot distribute leaflets with current offers. They are one of 4 main competitors in Poland, the others being Less Mess, Stokado and Storico.

According to Kangu Self Storage there is a significant growth potential for the self

storage business in Poland. “Before the opening of our facility in Warsaw we had for example about 100

enquiries from customers,” says Przemek Główczewski. “We are looking to increase our funding to potentially develop in Mokotów (district of Warsaw), Kraków and Katowice”.

The opening of the first

two self storage facilities

have turned out to be very

successful. Both facilities

have today an occupancy that

varies from 80 to 90%.


Their first facility opened in Wroclaw in October 2013; a warehouse with 600 m² of floor space and a further 360 m² of external drive-up units. The facility is housed in a building where they were already operating other businesses and the building was perfectly suited for self storage. Location played a significant role in the decision to open a store in Wroclaw, which is a very dynamic city with growing businesses in various sectors and has a large university student population.

They also opened their 3rd facility in Poznan (lease hold property) as they identified a large potential for self storage there.

The facilities offer units ranging from 1 to 30 m², with lockers also on offer, which are very popular mainly among private customers. The mix of customers is around 50/50 between private and business users, who are typically smaller private companies and entrepreneurs. They are pioneers in Poland in offering external container based storage units that vary from 2sqm to 35sqm. These units are located next to their warehouse and are in secured areas. They are popular predominantly among small business owners, but also among private customers looking for non-heated and less expensive storage space.

The warehouses are heated and well-ventilated, with temperature and humidity being carefully monitored. The entire facility is equipped with access control, alarm systems, fire detection and CCTV. All the units in the facilities are accessible 24/7 and the offices are manned Monday –

Stokado Self Storage has a very clear strategy of “building a network of self storage facilities across Poland”, says Klaudiusz Bechcicki, director of Stokado. All their self storage facilities are conveniently located in large Polish cities and provide accessible storage rooms of various sizes both in an enclosed facility as well as drive-up storage container units.

Stokado

Stokado is currently progressing with the

preparatory phase for a fourth location, with opening

planned for mid 2017


Friday 09.00 to 18.00. To give their customers a full-scale service, Stokado also offers free handling of deliveries, a wide selection of packing material, transport services, pallet storage and a wine storage service. They also offer small office spaces which can be used as meeting rooms.

Stokado see an increasing interest in storage, with the vast majority of clients never having heard of self storage in the past. Being one of the pioneers in the industry in Poland, Stokado is focusing their marketing efforts on building potential clients’ awareness of self storage services and the benefits of using a rented space to both private and business customers. The largest portion of Stokado’s marketing budget is dedicated to online advertising, including Google, social media, blogs and various internet portals. Being located on a busy road, the Stokado building has an eye-catching signage. They also use press, local internet portals and billboards in the city. In addition, the company carry out joint-marketing efforts with other businesses, including vouchers distributed in sales outlets, supporting local community events and charity initiatives.

They have wide ranging domestic investment plans in the years to come. Stokado is currently proceeding with the preparatory phase for a fourth location, with opening planned for mid 2017. They also anticipate expansion of their existing facilities and will add new units (both internal and container storage) towards the end of 2016 and early 2017. Given the current size of the industry, competition is limited.

“The biggest advantage of our service is flexibility - we are

flexible because our customers are flexible. There are no long term commitments, customers come and go as they wish”.


Euro Mini Storage, the first self storage operator in Hungary and Romania, recently added 91 storage units to their existing site in Budapest and over 150 units in their Bucharest site. Both sites were approaching 95% occupancy before the expansions, so the time was right. The total investment to fitout this stage was over 300.000¤ for both sites. The growing market and economic recovery both in Hungary and in Romania have confirmed that it is the best time for investment, “said Danu Temelie, Euro Mini Storage Managing Partner.

Euro Mini Storage adds over 240 new units in Romania and Hungary


Euro Mini Storage has developed partnerships with companies specialising in

property insurance, security and transport, offering a large range of services

This expansion has expanded each of the sites to over 7,500 m2 with 5,800 m2 lettable space and over 1000 units. They each have 3 levels, with lifts servicing each floor. The safety of customers goods is among the company’s priorities, which is why Euro Mini Storage has developed a wide range of security measures: video surveillance 24 hours a day, building alarm systems, computerised gate access and individually alarmed units. There are drive up units which are accessible from the outside of the building and internal units with heating and active ventilation systems.

Euro Mini Storage has developed partnerships with companies specialized in property insurance, security and transport, offering a large range of services - cardboard boxes, tape, plastic foil, metallic shelves - so as to offer all customers a wide range of complete and complementary services.

“The biggest advantage of our service is flexibility - we are flexible because our customers are flexible. There are no long term commitments; customers come and go as they wish so that this type of storage is ideal for those who need more space in their lives and are reluctant to store certain items in the house. However, we have customers who rent a room for a month, until they solve personal problems, and customers who rent for years. That unit is where they store their valuables, souvenirs or personal items, that take up too much space“ says Danu.

Hong Kong Self Storage Fire

The fire department claim they were significantly hampered

while fighting the fire by the individual units and small

corridors. They had to break open the locks of units in order

to gain access to them and extinguish the fire inside

Self Storage Europe – Volume 3, 2016 17

On June 19 a major fire erupted in a Hong Kong self storage business that took over 4 days to extinguish and tragically killed 2 firefighters. The impact of this event is likely to have major ramifications for the self storage industry in the region.

continued on page 18...


Background on the industry

Hong Kong has a rapidly growing self storage industry which is quite different to the European markets. The real estate market has required operators to establish their buildings in locations that would not be considered viable in many other locations. Operators often lease entire floors and sometimes even part floors of a building. These leases are usually short term, 6 years or less in some cases. The businesses can occupy several levels of a building not always connected, for example level 6, 9, 10 and 12 of the same building, with other businesses and sometimes even residential units. There are some purpose built and full conversions, however these are usually in the outer regions of Hong Kong. Partitioning systems range from the steel frames and doors commonly seen in Europe and the USA, to simple lightweight timber partitioning. Average unit sizes are significantly smaller than in Europe and there is an abundance of small sites with 100 units or less. There are several major operators with multiple sites all over the region, but recently the industry has seen an influx of smaller operators using self storage to increase their yields on secondary real estate offerings. The industry, being one of the newest to the region, is largely unregulated.

Buildings in Hong Kong constructed after 1973 must be fitted with automatic sprinkler systems, however older buildings pre-date this requirement and are serviced using fire hoses and extinguishers. Many self storage operations are set up in these older buildings as they are a cheaper real estate option. Highway frontage businesses are less common, premium locations are considered to be near subway stations, as many of the residents do not have cars. They will have someone move their goods into storage and then access their unit using the subway or by walking. Customers’ goods’ insurance is not commonly sold to self storage customers.

The Fire

On June 19 at approximately 11:00am a fire broke out on the 3rd floor of a building largely occupied by SC Storage. The fire is believed to have started through an electrical fault with an air-conditioner in the building. SC Storage are one of the larger self storage operators in Hong Kong, having been established in 2001 and now with over 60 sites. In this building they had storage on the 1st to 7th floors. The fire was originally classed as a 3 alarm fire, but after the fire services arrived at the scene they soon upgraded it to a 4 alarm fire. Hong Kong fire services grade their fires up to a 5 alarm, which is the most serious fire. Anything above a 3 alarm is unusual and considered very severe. 30 engines and over 120 firefighters were deployed to fight the blaze. Initially fire fighters entered the building, possible in an attempt to contain it to the third floor, or maybe to ensure no-one was inside the building. During this first entry, one of the teams lost contact with one of the firefighters who was eventually found and taken unconscious from the building. He died shortly after. Three other firefighters were admitted to hospital with smoke inhalation related injuries. The fire was then fought from outside the building and took over 108 hours, or 4 and a half days to extinguish. For much of this time thick smoke was being emitted, which impacted nearby residential buildings and commercial buildings. People were advised to stay inside and close all doors and windows. Four nearby schools were closed and concerns were raised about potential toxins in the smoke. On the Thursday another firefighter perished from injuries received while fighting the fires. The fire was eventually extinguished on Saturday, having destroyed 3 floors of the building and significantly damaging the remainder through heat, smoke and water damage. The building itself also had structural damage.

Complications in fighting the fire

The fire department claim they were significantly hampered while fighting the fire by the individual units and small corridors. They had to break open the locks of units in order to gain access to them and extinguish the fire inside. Also, a strategy the fire department use to contain such a fire, is to flood the floor above which keeps it cool and prevents the fire spreading upwards. In this case they say the self storage units prevented the water from spreading over the floor and allowed the fire to more freely spread. The fire department also stated that they found evidence that a range of dangerous goods were stored in the building. Such goods were required to have a permit from the fire



department to be stored in large quantities; items such as compressed gases and substances that produce flammable vapours and toxic fumes. These not only fuelled the fire, but created deadly emissions for the fire fighters, which could have also affected the surrounding areas.

The reaction

Within 2 days of the fire starting, and well before it was extinguished, the government formed a task force to inspect all self storage stores in pre 1973 buildings within two months. This would cover around 500 buildings. Following this, the remaining self storage businesses would also be inspected. After checking 90 locations, they announced that they had already found “not a small number” of violations, without providing the actual figures. These included passageways being too small, insufficient hose reel coverage and obstruction to fire service installations arising from the configuration of the storage units.

There were calls for fire sprinklers to be installed in all pre 1973 buildings, particularly as the last major fire in Hong Kong was also in one of these buildings and this also resulted in the death of a fire fighter. Self storage buildings in particular have been widely questioned in the media due to their rapid growth and perceived use of older buildings.

Landlords and building owners have expressed concerns about allowing self storage businesses as tenants. They claim that not only do they pose a fire risk, but they also

scare off other tenants who do not want to be in the same building as a self storage. It has been reported that

negotiations on self storage leases were halted after the fire.

The government is meeting with the Self Storage Association of

Asia, self storage operators, fire authorities and other regulators to look at what action needs to be taken as a result of the fire. They have repeatedly stated that regulatory changes are a possibility. They have mentioned having all self storage businesses fitted with sprinkler systems. They have also raised the possibility of having self storage operators keep an inventory of the contents of every self storage unit so

they can advise fire authorities accordingly. Increased staffing

and security measures have also been

mentioned to monitor the storage of unsafe goods. Any one of these changes will have a significant

impact on the industry.

What can we learn in Europe?

While the Hong Kong fire is unlikely to have a direct impact on the European self storage industry, it is still a timely reminder that fire is possibly the most significant risk to both a self storage operator and the industry as a whole. There is little doubt that some regulatory change will come out of the Hong Kong fire, at the very least

there will be a higher level of scrutiny. The New Zealand self storage industry is dealing

with their government following a serious fire there 2 years ago and calls for sprinklers to be installed in all self storage buildings. If there were a major fire in a European self storage building, then governments are likely to take a closer look at our industry and possibly impose additional regulations.

All self storage operators need to be vigilant in the maintenance and testing of their own fire prevention systems. This means regular testing of alarms and smoke detectors; ensuring fire doors are not held open; having an evacuation policy and staff trained on clearing buildings in case of an emergency. You should have an active disaster management plan. Templates for such a plan are available from FEDESSA should you need them. Be vigilant in making sure customers know the restrictions on storing prohibited items, and if staff are suspicious that these rules are not being adhered to, take action. When building a new site or extension, consider the latest technology in fire suppression systems and see if they would be suitable for your site. Fires can be caused by numerous events, some within your control and some completely out of your control. While they are still relatively rare in our industry, there is always a chance that your business could be the next affected. It is essential that you do all you can to minimise the risk of fire and have systems in place to deal with such a disaster if it occurs.

All self storage operators need to be vigilant in the maintenance and

testing of their own fire prevention systems.

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