SALES for some self-storage operators have tumbled sharply amid lockdown measures imposed in Singapore.
Helen Ng, chief executive of Singapore Post’s subsidiary, Lock+Store, said: “Since the implementation of the ‘circuit breaker’ measures we have seen a reduction of more than 50 per cent in the volume of queries regarding self-storage. Most people are waiting for the circuit breaker measures to be lifted in June before committing to securing a storage unit. Actual sales have reduced by 90 per cent in this period.”
Queries came from individuals shifting house and from small businesses seeking flexible storage for their inventory as well as from people who realised they need more space after spending weeks at home during the circuit breaker, she added.
While self-storage operators were unable to entertain newcustomers on-site during the circuit breaker, they were able to stay operational to serve businesses which are deemed essential during this period.
Another self-storage operator, Mandarin Self Storage, also said that new sales had fallen significantly during the circuit breaker.
A spokesperson for Extra Space Asia said: “hile sales have not increased throughout this period, they have not dropped as well. Both the number of customers moving in and out has stagnated.”
However, from June 2, self-storage facilities are allowed to resume operations as the circuit breaker lifts.
A spokesperson from the Ministry of Trade and Industry highlighted though that customers should avoid leaving home to access self-storage facilities unless it is essential.
Meanwhile, employees in the self-storage industry should continue to telecommute, and return to the office only where demonstrably necessary, the spokesperson added.
Some operators that The Business Times spoke to said they continued to receive enquiries from prospective customers during the circuit breaker through channels such as email, WhatsApp and Facebook.
In particular, Mandarin Self Storage found virtual tours of storage units helpful during this period.
Its sales director Matthew Chee said: “We did have a few successful sign-ups during the circuit breaker…after (they saw) our brochures online and our virtual unit online.” He added that the company will focus more time on training its employees to deal with customers online once the circuit breaker is lifted.
StorHub Self Storage has seen an increase in engagement from customers amid social distancing and work-from-home arrangements, said Luigi La Tona, chief operating officer.
Mr La Tona also said that technology has played a big part in letting the company successfully continue its work during the second phase of the circuit breaker.
“We have integrated technology in our processes to serve customers remotely without compromising safety and security,” he said, adding that StorHub Self Storage has enabled a special security system which monitors facilities and ensures customers’ goods are safe.
As Singapore emerges from the circuit breaker come June 2, Mandarin Self Storage will be implementing precautionary measures such as halving the number of employees at its office area to one to two people, operating shorter opening hours, staggering customers at different time slots and using the SafeEntry app for contact tracing, highlighted Mr Chee.
Tan Boon Leong, executive director of capital markets (land, building & global real estate) at Knight Frank Singapore, said that while industry growth has taken a hit in the last two months, the long-term outlook for the industry remains promising.
Knight Frank, in collaboration with Lock+Store, recently conducted a survey of self-storage users which polled 295 respondents.
Mr Tan said: “Self-storage spaces fill in the demand gap for smaller businesses that lack the scale to rent warehouse space, or experience seasonal fluctuations in their storage needs. Self-storage spaces also satisfy the growing demand from online merchants who can also take advantage of their flexible physical space and leasing terms.”
According to the survey, 23 of the 54 companies which use self-storage space are small and medium-sized enterprises (SMEs). Of the 54 firms, 20 are startups and online businesses.
And as apartments grow smaller, Singapore residents have been turning to self-storage spaces, with around half of those polled citing the need for more space for their personal items, the survey showed.
Ms Ng added: “Self-storage has become a need more than a want for some people as living spaces shrink. Small businesses affected by the shut-down have become wary of lengthy lock-in tenancy periods and are actively looking for storage and office space offering flexible terms.”
Commenting on the outlook for the industry, Extra Space Asia expects to see more business customers in due course, citing flexibility as an incentive.
In the short to medium term, the storage industry could be impacted by the performance of the economy, with occupancies likely to drop should consumers feel the need to tighten their purse-strings, said Mr Chee.
In the long run, operators will need to evolve to stay ahead of the competition and improve the customer experience.
Knight Frank’s Mr Tan added: “The sector is expected to become more competitive, with more operators entering the market and users remaining price sensitive. Besides location and economies of scale, operators are likely to leverage on technology to differentiate themselves.”
In this respect, operators could analyse data from bookings to enhance their services, or use facial recognition software and robots to improve the collection process.