Occupancy rate in a new market

[Paul Smith]

Hi All,

After a study over the past 6 month, I decide to build up the self storage business in Taiwan, however, 99.9% of people here have no idea about this, I think there is a need to educate people to know this useful products.

From the forum and ISS, I cannot find any articles about that ''how long will the occupancy rate from 0% to 70% if I operate the first one facility in a popular area, especially in an emerging market?''

Any comments will be appreciated!

[janicejan]

It seems to be a pretty hard situation, if no one knows about self storage in a certain area, you may end up closing it for sure, if you were thinking about educating them about self storage, you may start with advertising, TV ads or create commercials even through radio, banners may also be effective, do your best to attract people to visit your site for them to learn what it is inside a self storage facility and for them to know the importance of it.

[alexlekas]

Paul,
You're not just looking at an educational issue, but also a cultural one. Are Asians 'stuff' people, as Americans are? Could be they do not find themselves as readily in a position of more things than square footage.

Some insight, perhaps, could come from reading about what is happening in Europe, another area in which storage is gaining traction but remains relatively new, especially outside of the UK. There are several countries, particularly in Central Europe, where the first faciilty is being built or is in process. On this site, you will find any number of articles that speak to growing business in new markets, whether foreign or domestic.

I don't think there is a magic bullet for reaching a specified target, but time is an ally whose value will be enhanced as more people there learn the benefits of storage. Along with time, you are also on the ground floor of a businesses that has succeeded EVERYWHERE it has been tried.

[Autodoc]

Sounds like you have a very exciting challenge ahead of you.

Once the facility is open make sure you have enough staff on hand to keep the place polished and give lots of tours!

Offer daily guided tours of the property - make sure your tour guide is well versed in storage and the construction of your facility.

You will find that as more and more people understand what this is all about you will fill up in no time.

I would also plan on several outside 5 x 10 spaces and advertise these as secure motorcycle and scooter parking - this should go over big there.

Good luck - and keep us updated on your progress.

[Paul Smith]

Dear Janice, Alex, Wayne
Thanks for the great comments.

Before my post here, I did read about the SS industry in Europe market and also the Hong Kong market. As I know, the SS industry is growing well in HK, it's a 30% increase annually from 2004 to 2008. however that I didn't read about when it can break even in the beginning.

In such as an uncertain economic, Taiwan still meet with the job loss increasing, assets down and GDP drop drastically, I know I have much challenges ahead of myself, but there is no doubt that there is a big opportunity, a blue ocean business in Taiwan.

[Paul Smith]

Hi all,

Self storage in TaipeiWe are the first one and open this month, and we have 6 tenants in short 10 days. 13 customers came from internet to visit our site, and the successful rate seems to high(6/13=46%).

Although our tenants never see or learn about what self storage it is, but they did have need an extra space for renovation or relocation. Our facility is small but clean with surveillance cameras, gate-entry system that reads MRT card, 24hr. building security guards, hence people make a decision soon and great to pay a high rate for a unit.

Hope we can do well in Taipei.

[MusicCity Gal]

This is very exciting to read! Please keep us updated as you continue to grow! All advice here is good! Just stay on the forums and read all the threads you can. The topics on here alone are a wealth of information especially for newbies in the industry. We address all kinds of scenarios, some that you will be glad you had a heads up on.

Best of Luck!!

[Gina6k]

Other emerging SS market countries.

A few months back we had a guy posting about his facility in a new market; does anyone remember that thread? And if so, can you find it? He mentioned some water flow issues and I think his property may have been a UK territory island.

There were a couple of ladies at the ISS Expo this past January from another brand new market country. They were at the Manager's open session with Mr. Jim and Mel. Maybe someone has a way to contact them for help also.

I wish my memory was more photographic, but all I remember are the generalities. But here's hoping the new market people can connect and help each other somehow.

[alexlekas]

good for you, Paul, and continued success. While here, let me piggyback on a point Wayne brought up regarding the UK which may have some parallels with Taiwan. This falls in the realm of cultural; at the very least, it is geographical. While the American vision of SS is what it is, in parts of Britain, folks use their units as extra rooms on a house. Not for storing, per se, but as dens, offices, getaways, and the like. The units are functional extensions of tenant's homes.

I don't know if that applies in Taiwan but I'll get that square footage for homes/apartments is less there than it is here, probably closer to the European model. Would the Chinese view a unit in the same way some Brits do? Don't know the answer but may be worth exploring. Here is an article from a British paper about the topic: http://www.dailymail.co.uk/property/...prise-you.html.

Just a thought, Paul. If someone else's idea can help you, it is worth borrowing.

[Paul Smith]

Re: Occupancy rate in a new market

Hi all,

A long time not to post my updated here, today I want to learn more from your operating experences:

I have a new site with a total 520 units, it opened in Dec.2010. In my viewing, the no. of new move-in is @30~40 per month, the move-out is 10~18 per month. So the net increased tenants is an avg. 20 per month.

I am sad about the performance, it seems grow up so slowly if we want to reach the 90% occupancy

Do you have any comments?

[r_lee5]

Re: Occupancy rate in a new market

To go from 0-90% in less than 2 years (assuming your growth continues at current pace) would be an owners dream in the current ecconomy! Though not in a new market, we opened a facility 2 1/2 years ago that has had a consistent growth of about 15 net/month, which continues to present even though we are fast approaching the stabalized status, so don't be discouraged. Pay particular attention to the vacating tenants to make sure they are not leaving because of anything but they don't need the service any longer. At some point your new tenants will come more from referrals than from external sources, so the more satisified ex-customers you have, the more personal marketers you have for the facility. Keep them happy and they will continue coming!

[That Girl]

Re: Occupancy rate in a new market

I total agree with what you are saying. In the last two week I have rented 3 units to customers who have rented with us before. I have always said great customer service is the best way to market. Word of mouth goes a long ways!

[Countryside Pittsburg]

Re: Occupancy rate in a new market

wow, Taiwan? I would be concerned with people renting a unit and then trying to live in it since this is a poverty stricken area. Less rent and better living conditions

[hurlco]

Re: Occupancy rate in a new market

Paul, you are actually doing quite well. The average facility rents approximately 5% of their total square footage each month for 18 months. Taiwan is a new market and therefore, consumer awareness is not as high, nor as consistent as a U.S. market. Don't get discouraged, get motivated.

Find an advertising specialty item (Chip clip, flashlight, tape measure, letter opener, etc.) have your name printed on it and give it to everyone in your community every time you walk out the door. Design a killer website. Ask every new renter if they know someone else that may need a storage space.

It takes hard work to fill up a facility. Hard work and then some more hard work. Push hard, hire good people, exceed their expectations, help them move in, stand out, be innovative and make your customers feel special.

[DeeUKStorage]

Re: Occupancy rate in a new market

This is a really interesting thread for me as we are a new business in the UK, and I have been wondering lately whether our increase in occupancy has been relatively slow, quick, or about average?

While self storage is definitely becoming more and more popular over here, it is obviously nowhere near US levels. So I think I am fairly pleased with taking our occupancy from 0% up to 33% in 6 months. And of all of our customers who have moved in, only 6 have moved out again - the rest just keep on staying!

0-33% in 6 months? Good, bad or middling?? What do you guys think? Enquiries are certainly up, more people are phoning/coming in every week and last week we took record takings so I think it's looking good for the future

I'll keep an eye on this thread as there are such similarities between certain markets, with Europe/Asia being a prime example.

Thanks for everyone's input!