– Inventory and office documents among most common items stored by businesses
– Lock+Store to introduce small offices at Chai Chee facility to meet growing demand for integrated services among SMEs
More businesses are switching to self-storage amid rising rents and office space constraints in Singapore, according to a survey of 300 self-storage users at Lock+Store. The survey results, published in a report by Cushman & Wakefield, show that 40 percent of current users at Lock+Store are businesses (start-ups, blogshops, SMEs and MNCs) compared with 30 percent in 2011. The remaining 60 percent are personal/household storers.
Ms Helen Ng, Chief Executive Officer of Lock+Store said, “We see more start ups, blogshops and SMEs, especially those in the retail sector, using our storage space to store their inventory. Self-storage allows them to do away with a storefront and reduce their operating costs. They can then focus on growing their business through e-commerce. Apart from inventory, businesses, especially the MNCs, also store office documents with us as they are required by law to keep their financial records for five years.”
Added Ms Ng: “Further, as part of the SingPost Group, we are able to leverage synergies with our parent company to offer our customers end-to-end integrated e-commerce logistics solutions that are not only affordable but also can help them scale up their business fast.”
Ms Sigrid Zialcita, Managing Director, Research, Asia Pacific, Cushman & Wakefield said the survey results reflect the landscape of rising business costs which has “led to more corporate users turning to self storage facilities for their storage solutions.”
She said, “According to the URA, on average, rentals for warehouse space have risen by 16 percent while prices of warehouse space have risen at a faster rate of about 36 percent in the past two years.”
Ms Ng said, “As a result, business users now comprise a high proportion of Lock+Store’s customer base. With SMEs largely bearing the brunt of Singapore’s rising business costs, they form the bulk of Lock+Store’s corporate customer base.”
The survey results show that SMEs form 57 percent of Lock+Store’s corporate customer base, followed by startups (about 16 percent of business users), MNCs (15 percent of business users) and blogshops (12 percent of business users).
Business storers less price sensitive, tend to store for longer periods
The survey results show that while managing costs is uppermost among all self-storage users, business storers are less price sensitive as compared to personal users, however, they are more likely to use their facilities for longer periods and thus would value discounts based on longer leases or commitment periods.
Ms Ng said, “As an industry, we distinguish ourselves from traditional warehousing in terms of how we help businesses manage their operating costs with our flexible lease terms. You can store with us for a minimum period of two weeks to as long as you like. Business users appreciate the flexibility to tailor their storage usage according to seasonal demand for their products. At the same time, we make it more compelling for them to store with us for a longer period by giving them attractive terms.”
Ms Ella Sherman, Managing Director of Animal Merchandise Pte Ltd, a local SME that distributes and retails home-ware products, started renting a 100 sqft storage locker at Lock+Store Serangoon in September 2013. Ms Sherman said, “High warehousing costs are a huge barrier to starting a distribution retail business in Singapore. We learnt it’s actually more cost effective to store our inventory at Lock+Store rather than with a logistics company. We like the flexibility of being able to access our storage unit 24/7, the state-of-the-art security, air-con and customer service. We take advantage of the onsite SmartPac collection and delivery service that allows us to despatch our online shopping purchases from www.animalmerchandise.com to our customers quickly and affordably.”
Among the businesses surveyed, about a fifth said they would take advantage of the onsite SpeedPost and SmartPac services launched by Lock+Store in December 2013.
Rising demand for integrated services among SME storers
Onsite SpeedPost and SmartPac services are just some of the new service offerings that Lock+Store has introduced to provide an integrated experience for its business storers. Lock+Store will be setting up small offices for rental at its flagship Chai Chee facility. Of the 116 business users surveyed, about 40 percent expressed interest in exploring the use of the small offices. The most popular office format is a private office without ancillary services, such as a receptionist or secretarial support. Potential lessors also value privacy – an open concept office garnered the least amount of votes.
Ms Zialcita said, “Self-storage service providers have to continue to innovate to meet the evolving demands of their end users, especially business storers who want more than just a place to store their goods. The survey results show that there is a demand for integrated services among business storers. Service providers that can meet businesses’ changing needs beyond basic self storage will be able to pull away from their competitors in an increasingly crowded industry that sees new entrants with new business models very year.”