The exposure is being made available through Group First International’s role as the exclusive international marketing and sales representative of storage units manufactured by Group First, a Lancashire, UK-based international property developer.
The storage units business is part of a Group First division called Store First, which was launched in the wake of the 2008 financial downturn.
According to James Young, the Bangkok-based chief operating officer of Group First International – which is a separately owned and managed company from the larger and longer-established Lancashire property business – the Store First storage model is slightly different from that employed by such UK storage giants as Big Yellow, Safe Store and Access.
These companies rent storage units on a monthly basis to individuals and companies, which can remain "tenants" for years and even decades.
“Being a property developer, Group First builds the storage facility which contains the individual storage units, and then sells these units, through Store First, to investors, who can buy anything from a 25-square-foot space to an entire floor,” Young said.
Most of the spaces are then rented out by their investor/owners, who enjoy a number of tax advantages, such as the fact that they are not obliged to pay VAT on the storage spaces they buy, as the purchase price per unit is below the £79,000 threshold for a business property. This enables them to offer storage at a cheaper monthly rate than the major companies active in the market.
Investors don’t need to get involved in the actual renting of their space, as this and other support services are provided, in return for an annual fee based on the amount of space involved, by Group First, Young said.
The way Group First International markets the storage spaces is through financial advisers, wealth manager, real estate companies and other financial services intermediaries, which in turn market them to their clients. These investors take direct ownership of the properties, with full UK Land Registry title on a leasehold of typically 999 years.
Car parks next
The storage model has been so successful, according to Mike Starvis, Group First International’s chief executive, that Group First has begun taking the concept to the long-stay car park industry, through a new division called Park First.
“In the four years Store First has been in business, it has grown to become the No. 3 player in the UK market, behind Safestore and Big Yellow,” Starvis, who recently relocated back to the UK from Hong Kong, said.
Unlike most of its rivals, however, Store First’s focus is on the commercial storage market rather than individuals, according to Starvis. “The NHS has a floor in one of the properties, and British Gas has two floors, with a third pending," he said. "Another Store First tenant is Monster Beverage.”
Although the storage units of Store First represent Group First International’s flagship investment product for non-UK investors at the moment, the company, which until earlier this year was known as DV Global Capital, is in the process of being given other Group First UK property-based products to market internationally.
These include long-stay car parking spaces in the UK, through Group First’s Park First division, and spaces in UK business centres through a new Group First division called Business First, for which Group First constructs the units.
In addition to its Hong Kong head office, in the Wanchi district, and the London and Bangkok offices in which Starvis and Young are based, Group First International has offices in Singapore, Tokyo, Kuala Lumpur, Bangkok, and Zug, Switzerland.
‘Six times as much stuff’
The growth of the industry which markets empty space to people and businesses who need it has enabled Big Yellow to become a FTSE 250-listed company valued at close to £750m, with annual revenue of around £70m.
According to a recent BBC website article on self storage, the UK has the largest self-storage industry in Europe, with a total annual revenue approaching £500m. The article quoted Danny Dorling, professor of geography at Oxford University, as saying that the current generation of Britons has six times more “stuff” than the one before it.
The BBC article notes that the “gold rush” element of self storage may be coming to an end, though, as acquiring and building the facilities needed becomes more expensive, and the once wide-open market becomes more mature and competitive.
A BBC Two documentary on the UK’s self storage industry, Real Storage Wars, was broadcast on 14 April. It may be watched online by clicking here.
