Business investors hold the key as self-storage property goes on the market for sale
Trading as AA Secure Storage, the secure complex in Blenheim’s southern suburb of Witherlea contains 169 individual storage units – comprising a total of 2,124-square metres of floor space sitting on some 5,326 square metres of industrial-zoned freehold land.
Encircled by a 2.3-metre-high wire security fence topped with barbed wire, the AA Secure Storage self-storage hub comprises five rows of buildings - with individual stowage facilities ranging in size from entry-level 4.25-square metre units, and domestic garage sized units of between 12.50 – 15.60-square metres, up to large semi-commercial spaces of approximately 31-square metres.
Weekly rental rates for units start at $24 for the smaller lock-up-and-leave cells, up to $87.50 for the more spacious garages. When fully tenanted, the Witherlea business generates annual net income of $241,967 plus GST and outgoings. Trading records show that the units have an average occupancy term of 3.95 years.
Sitting on the corner of Woodmor Road, Taylor Pass Road, and George Conroy Drive, the rectangular-shaped units are constructed of prefabricated module steel framing with Coloursteel roofing, and feature roller doors facing inward onto a large, sealed yard with ample space between the rows for loading and unloading vehicles such as trucks and trailers.
Tenant access to the AA Secure Storage self-storage units is via two gates – one off Woodmor Road and the other from Taylor Pass Road. Both security gates are operated with a card system, with additional security monitoring on each individual unit.
Now the wedge-shaped property at 20 Woodmor Road, along with the going concern AA Secure self-storage unit business, is up for sale by deadline private treaty through Bayleys Blenheim, with offers closing on December 3. Salesperson Grant Baxter said the AA Secure Storage lockable units were tenanted by a mix of private and commercial clients.
Baxter said the AA Secure Storage operation would attract both investors looking for a relatively hands-off business opportunity, and owner-occupiers seeking storage space for their own possessions and supplies. Four of the units have higher studs allowing for the storage of cabin boats or smaller commercial vehicles.
“The current owners have engaged the services of a part-time manager working between eight to ten hours a week - answering phone enquiries, ‘meeting and greeting’ both new and departing tenants, and undertaking primary property maintenance,” he said.
Baxter said the physical structure of the five storage blocks and the external areas of the Witherlea property required only rudimentary minimal property maintenance. Each individual unit has concrete flooring – allowing for the storage of cars, boats, and jetskis, among other items.
“The location of AA Secure Storage in a suburban industrial location means tenants can access their units at any time of the day or week without disturbance to neighbours in the nearby residential locale,” he said.
Baxter said self-storage has been a constantly growing industry in New Zealand over the past two decades. A survey by AA Insurance found that five percent of the 1100 Kiwis they surveyed paid for off-site storage of their goods and possessions.
Analysing the survey findings, AA Insurance said: “Kiwis use storage facilities for a number of reasons, like keeping items safe between houses moves, if they’ve inherited furniture, or simply because they have too much ‘stuff’.”
The AA Insurance survey highlighted that furniture and household items were the most common items kept in storage by Kiwis – as indicated by 67 percent of respondents, followed by sports equipment at 34 percent, and tools and equipment indicated by 30 percent of respondents.
The AA Insurance survey also noted that a substantial proportion of storage unit users – some 30 percent – utilised the service for more than three years.
“For storage business owners and operators, that’s certainly a cornerstone block of tenants within the rental book which would give confidence to forecast revenues,” Baxter said.
Although the self-storage industry is relatively new in New Zealand, in America it's worth more than $38 billion, with one in 11 people paying for extra space to house their possessions. The first self-storage facility in the United States was established in Texas in the mid-1960s.
Baxter said that last year, a 49-unit self-storage premises in McCartney Street in Blenheim - with 882-square metres of storage units generating net annual income of $102,690 - sold for $1.68million.
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