Investors are always on the lookout for favourable risk-adjusted returns. But such opportunities can be difficult to find in a world awash with capital and frictionless communication systems. Sadly, supernormal profits never last long.
Every so often, though, new opportunities do pop up, and often in the least expected places. What’s more, it can take time for the word to get out. Which is why the investors who are first to the party are often those who make the biggest returns.
Currently, interest is surging in Urbanbox strata storage units, thanks to the combination of strong demand from consumers and impressive returns of up to 5 per cent or more per year.
Where is the demand for Urbanbox strata storage units coming from?
Urbanbox strata storage units in South Sydney are more elaborate than simple windowless boxes. We build these units to facilitate a growing market for “home away from home” setups. These units now come with conveniences you’d expect in a traditional utility room, not self-storage. And they come with a host of features for car enthusiasts, making them far more attractive to this particular type of tenant.
Homeowners want to convert their garages into rooms they can use for things other than storing and working on cars. Sometimes they don’t have garages at all if they live near the CBD. So strata storage units are becoming a kind of garage outsourcing service where a member of an existing household stores vehicles and works on them surrounded by regular home comforts.
Conveniences we offer at Urbanbox include drive-up access, a variety of sizes available and 24/7 access. There’s WiFi access throughout our facility, combined with shared amenities such as kitchens and toilets for added liveability.
In many ways, it’s a new approach to the self-storage concept. Tenants get a host of quality of life improvements which encourages them to use the facilities more and pay higher premiums.
Demand for this type of storage unit is also coming from changes in available space in many inner-city districts. Renting a property in the middle of Sydney with a car-sized garage is prohibitively expensive for many residents. But a storage area on the edge of town is well within budgets – especially those who want such a space to work on their vehicles.
These units are also becoming more popular to buy outright too. Prices are going for around AUD 2100 per square meter. And that means that strata buyers have heaps of opportunities that simply weren’t available before.
Why is there a strong investor demand for Urbanbox storage units?
It’s clear what regular folks are getting out of storage units. But what’s in it for investors?
Perhaps the primary draw is the high occupancy rates. Getting above 90 to 95 per cent in the current climate is a challenge for traditional commercial and residential real estate investments. But thanks to the unique set of demand factors affecting the industry, it’s very achievable in the strata storage unit market. Most of the time, there’s a waiting list for units. And even if the odd unit is available, renters tend to snap it up fast.
The market is also biased in favour of more affluent renters, which is another advantage over the traditional rental market. Primarily, demand is coming from tenants who make their money in the city and want to store their luxury and specialist cars out of town. They’re demanding value-added utilities to make storing, working on and viewing their vehicles a more pleasant experience. And that’s adding to the premiums many of these self-storage businesses can charge.
At Urbanbox, the system for investors is straightforward. Investors buy individual units through us and then let them out to tenants. Urbanbox currently has approximately 205 units located at its Kogarah facility in South Sydney varying in size between approximately 18 metres squared up to 39 metres squared (with a lot of options in between). Once you purchase a unit, local residents begin paying for using the space. If they fail to make a payment, investors have the option to evict them, sell the contents and then rent to somebody new, depending on the late payment status of the tenant.
Remember, as an investor, you can buy individual strata within the overall Urbanbox development how you like. Individuals or self-managed super funds can simply adjust the number of units they own, based on their risk appetite. It’s that simple.
How the long-term returns play out will depend considerably on how conditions in the market change, but at the moments, trends are positive. Space in city centres is at a premium, so there’s a large population of buyers who are looking for opportunities like these to store their vehicles, without the inner-city premium.
Urbanbox also has the advantage of being a rare kind of strata self-storage service, offering tenants facilities that they struggle to find elsewhere. This differentiation makes investment storage units you buy from us more attractive and more likely to secure tenants looking for additional “home away from home” type storage outside of Sydney centre where it is more affordable.
Investing in Urbanbox strata storage units
Sydney is home to a large number of car enthusiasts, but relatively few of them have places where they can leave their vehicles in relative safety. They want to be able to tinker under the hood, socialise with other enthusiasts, and explore their passions, but facilities for doing so are few and far between.
Urbanbox in the commercial, residential and industrial area of Kogarah near St. George’s hospital in South Sydney is stepping up and providing a space designed for this kind of tenant. And that’s providing a unique opportunity for investors like you.
If you purchase a unit through us, your tenants will receive a host of advantages that they will struggle to find elsewhere. They get state-of-the-art surveillance technology to protect their assets, 6.5m-wide internal driveways for easy access to their garages, and no public access to the site. All these features help to keep their vehicles away from prying eyes and avoid bumps, scrapes and scratches – a unique selling point of the facility.
Investing in Urbanbox allows you to diversify your current property portfolio and appeal to a new type of tenant. Plus, you can achieve impressive, inflation-beating returns in the process. Why not speak to us see if a Urbanbox Strata Storage Unit is for you?