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2007 Volume IV

FFOCUSCUSSelf Storage

ACTIVE SUPPLY AND DESIGN

Conference Sponsored by

Focus Front Covers.indd 1 24/10/07 4:08:37 pm

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Full Design CapabilitiesSelf Storage DoorsThe Model 650 is designed and manu-factured for durability, quick installation and ease of maintenance. Standard features eliminate the need for upgrades and additional charges. We feature exclusively the only Janus International door and panel profile in the UK and Europe.

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FOCUSSelf Storage

Self Storage Focus is published on behalf of The Self Storage Association by

Stephen Webb AssociatesKestor House, Shore Lane

Bishops WalthamHants, England

SO32 1DYTel/Fax: +44 (0) 1489 890944

Mobile: 0783 359 0919E-mail: [email protected]

Editor: Steve Webb

IN THIS ISSUE:SELF STORAGE FOCUS

FOCUS may be subscribed to by applying to the SSA Head Offi ce at Priestley House, The Gullet, Nantwich, Cheshire CW5 5SZ. Tel +44 (0)1270 623150. Fax +44 (0) 1270 623471 E-mail [email protected]. Current annual subscription is £4 per issue in the UK and Europe. EDITORIAL: Contributions on all aspects of the self storage industry are welcomed, together with photographs if appropriate. Opinions expressed in Self Storage Focus are not necessarily those of the Self Storage Association. ADVERTISING: In the fi rst instance please contact Jane Rowe, Commercial Department, SSA, PO Box 5220, Southend, Reading, RG7 6YE. Tel +44 (0)1635 869427. E-mail [email protected] .

2007 Volume IV

6

In the Association there is no doubt that ‘things are “hotting” up’ as we become more involved in making the industry’s voice heard. Before I update you on some of the issues may I make my regular plea to everyone reading this magazine to keep us informed on any matter which could have a detrimental effect on the self storage industry, even if what you have to tell us is in con dence. Your feedback is absolutely vital to enable us to keep abreast of any issues. So to the news; and I could not help noting this headline from our US colleagues and I quote; “Foreclosure a Windfall for Self Storage. A recent spike in foreclosure lings on Staten Island is helping self storage facilities there thrive like never before. Many of the Island’s self storage facilities are near capacity. Thousands of units are lled with furniture, appliances and decorations owned by people whose mortgages are in default - and those in the industry are hoping it stays that way!” Perhaps the pertinent comment as the UK housing market wobbles may be “Watch this Space”. This year’s SSA UK Mintel Report has gone to the printers and will be ready for distribution once you see this bumper edition of Focus. Much of what is found in the report con rms last year’s statistics but there are some important changes. For example and to whet appetites, the report indicates that the UK industry has grown by over 15% in the past year and now provides 0.42 square feet of self storage space per person in the country. The draft European standard on self storage is reaching an important landmark with international comments from throughout Europe expected before the end of October. All being well it could become a fully- edged standard next year. So we haven’t had a General Election but the Chancellor has just dropped the bombshell about a change to Taper Relief from April 2008 which will adversely affect

entrepreneurs in small businesses intending to sell their companies. If you want your voice to be heard, sign the petition at http://petitions.pm.gov.uk/SaveCGTrelief/. And the campaign to persuade the Government to think again about its impending changes to Empty Property Relief continues. A small team from the Association met with HM Treasury in the Summer to express the concerns of our industry. Lately and in parallel with many other associations and trade bodies, we have made further and strong representations. The outcome is not yet known but I note that the Property Press is not letting up in its adverse comment on the Government’s plans. Meanwhile the Government has scrapped its controversial Planning Gains Supplement (PGS) proposals. Instead, after consultation with relevant bodies, it has decided to introduce a tariff-based solution. The SSA UK has also been in discussion with HM Treasury and the Financial Services Authority, with other interested associations, about the possibility of exemption from the 14 January 2005 regulation of insurance provision. Whilst it is early days yet and there are a number of hurdles to jump before anything is altered we will continue to pursue this possible opportunity. We look forward to welcoming many of you to the inaugural UK conference at Hellidon Lakes on 13/14 November. Please remember that this event replaces the traditional Christmas members’ meeting.

Yours sincerelyRodney WalkerCEO

Increasing pressure on our industrySSA News 7

News 8State grants aid to Steel Storage… Safestore scores a century… Siblings launch

Fox expands… Getting the best from your contractors… Expansion for Lock N Store… Time for REITs reform… Big Yellow’s ve store boost… Stamina tested by amateur cyclist

Property 27Self Storage Investment

Scotland 31Self Storage in Scotland

Company Feature 35Into self storage with serendipity

Insurance 39Terrorism insurance

Employment 41Rooting out “Gingerism” in the work place

USA 44Cell tower hosting

SELF STORAGE EUROPE

Editorial 5

Company Feature 6Lessons from a European Adventure

Country Feature 9Self storage the Latvian way

European Union 11Climate change

COVERSSelf Storage FocusQuickstore in Exeter continues to expand

Self Storage EuropeCity Self-Storage’s Padova facility is another piece in the company’s European odyssey2007 Volume IV Self Storage Focus

pg6 SSA Leader.indd 1 24/10/07 00:13:10

a company in Maidenhead…

New Members

On behalf of the Directors and members of the Association we would like to extend a warm welcome to:

Full Operators

Uck eld● Luxfords Weybridge● Wed Mid Self Storage Stourbridge● Youcanstore.com Kingsbury● Megastorage Cambridge● Wolverhampton Self Storage Wolverhampton● Currie Easy Self Storage Richmond

Provisional Operators

● Dawson Estates - Longeaton● U Store Depot NI● Kent Space

Suppliers

● Sutton Winson Insurance and Risk Management

Overseas

● Euroministorage Romania● Styria LLC Austria

Web site

Members will only be able to enter the members’ section using their own company username and password. If you have not already been contacted by the Head Of ce team, who are the only ones who can input this information, please contact them as soon as possible so that you do not miss out on any important news. They will also keep a log of your details just in case you forget it. There will only be

7

one password per company – the company lead may, of course, pass it on to whoever requires access to this section.

Deadline for contributions to the Next Issue of Focus

Contributions on all aspects of the self storage industry are welcomed. They should be sent initially to the Editor, Steve Webb. The deadline for the next issue is 21 December 2007.

7 - 9 May 2008European Conference and Trade Show in Rome

Dates of Meetings

The programme for 2007 includes:

Tuesday 13 and Wednesday 14 November 2007UK Conference and Exhibition at Hellidon Lakes

2007 Volume IV Self Storage Focus

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State grant aids Steel Storage’s Streamline construction An A$45,000 grant has been awarded to Steel Storage by Queensland Industry Development Scheme (QIDS) to develop its next generation Streamline construction system. Queensland’s Minister for State Development, John Mickel, commended Steel Storage’s innovation commenting: “Steel Storage has been designing and constructing self storage facilities for about 15 years and is now considered a market leader. The company has recognised that to stay on top it needs to come up with new and innovative ways of doing business.” The Streamline project has been in development for over two years, with Steel Storage collaborating with Prodex Systems, who specialise in strategic and operational management of new product development. The patented new Streamline system incorporates a redesigned channel and insert which eliminates dust build up, whilst also removing sharp edges and xings in self storage facilities. The Streamline product was developed in response to feedback from operators who had commented that cleaning partitioning channels is extremely dif cult, as well as health and safety concerns over sharp edges and exposed xings. Both of these issues are eliminated with the Streamline system, providing value for operators and managers through a safe and clean partitioning

system. Managing Director, Jonathan Perrins said his company worked collaboratively with government bodies and industry to help foster industry growth. “We are very appreciative of the Queensland Government’s support,” he said. “The grant will help us to develop better systems for self storage constructions the world over and communicate these advancements to the industry and investors.” Steel Storage now operates in four global regions, with its head of ce in Australia, and operations servicing Asia, Europe, and most recently the Middle East. The Steel Storage Group has been involved in the construction and ownership of self storage facilities since the industry’s early days in Australia. Collectively, the company’s directors and managers represent more than 50 years experience in the self storage industry. Steel Storage caters directly to customer needs, from simple t-outs and build-ups, right through to providing the full service experience.

Five minutes to install a roll-up doorIt only takes ve minutes to install its Model 502 roll-up door, claims US Door & Building Components. The roll-up door, speci cally designed for maintenance-free operations, stands out as the roll model for the industry according to the company. “We have been very pleased with the Model 502,” said Cletus Frank of K.C. Steel Systems. “The overall quality and workmanship combined with no-maintenance helps us stand apart from other metal building suppliers.” For wind load applications, US Door & Building Components has engineered its self storage doors for the industry with

wind load ratings of up to 120mph without the need to incorporate additional wind locks. For applications requiring wind load ratings of 140mph the design uses Ultra High Molecular (UHM) nylon wind locks for ease of use and quieter operation than doors designed with steel wind locks. Additional features of the Model 502 include a 20 year warranty against chalking and fading on the paint

barrel assembly making it ideal for low headroom applications and a universal guide system suitable for any doorjamb type. Doors are available in sizes up to 10 ft wide by 10 ft high and in 22 different colours.

Marketing Director joins US Door & Building ComponentsMary Ann Diehl has joined US Door & Building Components as Director of Marketing. Her responsibilities will be to lead both tactical and strategic marketing for the company including promoting the company’s

global reach in supplying building components to the self storage industry. She has a Bachelor’s of Science Degree from Missouri State University and an MBA from the University of Leicester in England.Jonathan Perrins

US Door’s model 502 may be tted as interior or exterior

8Self Storage Focus 2007 Volume IV

pg8-15 News.indd 1 23/10/07 23:33:01

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Safestore tops its centurySafestore recently opened its 100th self storage facility at Guildford in Surrey. It is on the popular Sly eld Industrial Estate which it shares with two other major self storage operators. Active Supply and Design were responsible for the t out of the new facility working closely with Safestore to ensure deadlines were met and that the store opened on time and to budget. Active designed and built a two tier mezzanine oor with partitioning to the ground and rst oor levels

providing over 20,000 sq ft of storage rooms. The store is 49,500 sq ft and has space for more than 700 customers. Apart from standard storage rooms ranging from 10 sq ft lockers to 325 sq ft prime business storage rooms, a few modern and bright of ces are also available to let in this brand new building. Another feature of the Guildford storage centre is a carpeted oor which gives the storage centre a unique homely touch for its customers.

Safestore’s 100th store

Single door module creates a high security areaAccess control provider, PTI Integrated Systems, has released a single door module. This is an expansion device for its FalconXT and Quantum solutions and, according to the company, has everything required to secure access through any door. Ideal applications for self storage include offering customers a high security building or hallway by requiring a proximity card or thumb print scan to enter the area. The module simpli es the creation of these high security areas by including all features needed to secure access through the door. Included in the module is a Wiegand interface for proximity and biometric readers, RS485 communications to the FalconXT, power for a door strike and multiple inputs for items like request to exit buttons. Installation is made easy, as the PTI single door module supplies power and control signals directly

to the door strike making the cabling for power and communications much easier. The single door module comes precon gured to support the most common access control applications. “The single door module allows our customers to offer high value services to their customers by creating a high security area in their self storage facility,” stresses Justen Ferguson, Operations Manager at PTI, “customers install this device on the secure side of the door and connect a proximity card or biometric reader and the door strike and the area is secured.”

The PTI single door module

“It is a major milestone for the company and hard not to get excited about this smart new store,” says UK Marketing Manager Jonas Witt, adding that it is managed by one of the company’s most senior store managers. Two months later Safestore opened its 101st storage facility in Eastbourne, using

Active again for the t out to provide just over 30,000 sq ft of storage rooms on the ground and rst oors, using a two tier mezzanine oor supplied by Active as part of its turn-key installation. Over the next year Safestore has a further 14 new stores in the pipeline, including two in Paris.

New self storage company starts in OxfordA 28,348 sq ft industrial site in Oxford has been leased by Fort Box. The company was founded in the spring of this year by Hugh Knowles and Ian Connolly, both with experience of working for self storage companies. Fort Box has taken a 25 year lease on units at a rent of £5.75 per sq ft, according to PropertyMall.com, and will fully refurbish the building before moving in.

The company is backed by U-Store-It Trust of the USA. The leasing of the units on the D-G Horspath Industrial Estate, Peterley Road, Oxford was completed by property consultancy Lambert Smith Hampton acting on behalf of CBRE Investors for Falcon Properties. The Horspath Industrial Estate is on the city’s Eastern bypass and the company will have Big Yellow and other self storage companies as near neighbours.


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Brother and sister launch self storage in MaidenheadBrother and sister, Kevin and Karen French, have invested in a self storage facility in Maidenhead, Berkshire. Once fully tted-out, for both domestic and commercial clients, intostorage.com will have over 35,000 sq ft of net lettable space with units from 10 sq ft to 1,000 sq ft. Karen has swapped her executive suit for a uniform and fork lift truck. The former boss of a successful London recruitment business has thrown her all into running the self storage company. “I was thrilled to pass my fork truck test. It was dif cult, but an essential element of running this business. I have also spent a year researching about the best storage facilities and the needs of customers as well as locating the right premises. It has been a busy year and quite an eye opener,” she said. The smart uniform is an important element of the sibling’s new profession and professionalism. So is the logo and branding they created which they intend to make a household name. “We are very proud of our logo, designed by us, with the idea coming from children’s bricks purchased

from a Marlow toyshop. It was great fun and very rewarding creating the new brand,” said Karen. The brother and sister have invested in excess of £250,000 on the rst phase of the project and have big plans for the future. Kevin owns a facilities and storage warehouse in London specialising in the media industry, and has expertise within the storage and security industry. They have arranged around-the-clock security, 24-hour monitored digital CCTV, and full access control which allows clients 24/7 access. Kevin said: “It is important that people know their

goods are safe and secure and that they will be safe visiting and inspecting their possessions. We have created a warm friendly

hard graft for the brother and sister team. They planned every inch of the business from the glamorous red and white logo to installation of high spec and high tech security systems. “Our decision to use Globaleye and the Digitech product for our access control system was a really smart move. It is a great system and the team at Globaleye has been with us every step of the way,” said Karen. Kevin said: “We are now in our fourth month of trading and have been amazed at the speed with which the rst phase has lled. Due to demand we are now going ahead with Phase 2, which

place to come along to.” Business Editor at the Maidenhead Advertiser Carla Delaney boxed clever when asked to open intostorage at its launch party. Instead of the usual ribbon cutting she suggested being a surprise gift in a box. Fortunately she didn’t have to stay inside for too long. The celebration at Gardner Road site was the nale to months of preparation and

is planned for March 2008. “Steel Storage did the t out for our rst Phase. Project Manager Keith Szreider and his team worked hard to ensure that we had a perfect end product, and a facility to be proud of. “This is such an exciting time for us both, and with a structured business plan, we are looking forward to putting intostorage.com well and truly on the map.”

Launch party with (centre) Carla Delaney Business Editor of the Maidenhead Advertiser and Kevin and Karen French at the launch party

Intostorage Units

Marlow Five Miles water run contestants: Kevin, Fiona (Kev’s wife), Lacey (Karen’s daughter) Jamie and Charlotte (Kev’s son and daughter)


pg8-15 News.indd 3 23/10/07 23:33:06

Fox increases its self storage capacity

Fox Self Storage has re-cently completed a t-out at its Cardiff facility. Managing Director Paul Fox commissioned Active Supply & Design to supply and install a two tier mezza-nine oor with storage rooms to the ground and rst oors; building-in the ability to in-stall another mezzanine oor and storage rooms on the second and third level. The project included 90 minutes re protection, all electrical works including CCTV and building regulations approval and now provides Fox with a huge increase to its exist-

new storage units and thank Active’s involvement and advice from the planning stages through to comple-tion. “We are hoping that take-up on the new units con-tinues to grow so that we can invite Active to expand our current operation once again.” Take-up of the new units has indeed been excellent, with the facility achieving

Bright clean floors build customer confidenceAlfa Self Storage speci ed a Ryebrook resin oor for its new Walton-on-Thames unit opened this summer. All corridors and individual storage areas have been laid with Ryetech hi-build epoxy resin, delivering a seamless nish that is easy to maintain and, with good impact, loading and scratch resistance which will remain looking highly presentable long into the future. When viewing suitable units to develop as the next Alfa Self Storage facility, Managing Director Carl Hanauer was impressed by one that already featured a resin oor installed by Ryebrook. Although an alternative location was nally selected, Carl speci ed Ryebrook to lay a single coat of its Ryetech resin nish in each storage area with two coats being laid to the corridors that obviously endure greater levels of foot and moving-aid cart traf c. The rst coat of Ryetech was applied to the entire 1,500 sq m area before any

dividing walls were installed. Ryebrook prepared the existing concrete base using a diamond grinder to remove adhesive and additional debris. Localised damage was then made-good using an epoxy resin mortar before applying the hi-build resin coating. Once the internal structure was completed, Ryebrook returned to apply a second coat to the corridors.

Bright clean corridors brings customer con dence

ing self storage net lettable area. As part of this turn-key t-out Active installed varying sized units between 16 and 165 sq ft, optimizing avail-able space for maximum returns. The installation was completed within the arranged deadline, as the new extension needed to be ready in time for a new ad-vertising campaign being run by Fox in the local area. Steve Peterson, who has been appointed Manager of the Fox Self Storage brand commented: “We are ex-tremely pleased with the

78% occupancy in just three months. These extremely encouraging results have prompted Paul to press on with the nal phases of expansion much earlier than originally anticipated. Active has already tted out Fox Group’s other two self storage facilities in Stour-bridge and Louth, highlight-ing Paul’s plans to expand further into the self storage industry.

Interior of Fox Self Storage Cardiff facility

Fox Self Storage in Cardiff


pg8-15 News.indd 4 23/10/07 23:33:10

Globaleye May07.indd 1 23/7/07 20:17:37

Another way of getting the best from your contractors

A recent contract for the newest Storage King facility in Woodley, Reading was ful lled without the need for additional resources such as architects or quantity surveyors. According to Dave Betts, Chief Executive of Storage King Europe Ltd, the use of such professionals can add a signi cant amount to the initial set up fees. For many months now Dave has worked closely with the team at Active Supply and Design (CDM) Limited to create a slick method of producing feasibility studies for future proposals, which, with the in uence of a major investment, has resulted in many of these coming to fruition. Commenting on the culmination of the project Dave said: “In an increasingly competitive market, where nding new locations, not to mention the legalities involved in getting the keys, takes up a huge amount of time, it is always nice to know that a close team of contractors are working tirelessly behind the scenes. Our approach on this project was to simply

allow people to deliver what it is you are paying them for and not to tie them up in a mass of red tape and onerous contractual legalities. “Prior to completion of the deal the SK development team headed up by Active Supply and Design (CDM) and including Elephante Lifts and PTI UK meet on site to agree the speci cations and scope of works for the project. Following on from this the whole project is designed, costed and programmed so that as soon as the legalities are completed and keys obtained the team is ready to move in. With our massive development plans for the next 18 months we cannot afford to complicate the process, all our contractors work together to deliver the completed article on time and on budget.” The facility in Reading will offer in excess of 40,000 sq ft of self storage units covering two levels, following the introduction of a single tier mezzanine oor which is securely and conveniently covered by a PTI UK access control and security system, complete

with an Elephante goods lift for upper level customers. In addition, all re rating and electrical services to achieve building control compliance, of ce refurbishment and security fencing were undertaken. “Active Supply & Design has really taken ownership of the project, working on our behalf with our preferred suppliers PTI Integrated Systems and Elephante Lifts. Internally Storage King deals direct with all other preferred suppliers,” said Dave. “A special thanks should go to Active’s Contracts Manager Rod Rickett, whose efforts on site kept things

running smoothly and Greg Dale who despite being mainly of ce based, offers a wealth of experience and is always on hand to answer any queries we have relative to the project, from concept to completion, and brings together all information in readiness for opening,” said Dave.

Exterior of Simple Storage Solutions building

15

Shiny passageway


pg8-15 News.indd 5 23/10/07 23:33:14

Office Elephante lift

Simpson Ad Nov 06.indd 1 23/7/07 20:19:29

Packaging

Selling:Selling: Five boxes at a timeFive boxes at a time Established over 15 years ago ABC Selfstore has three stores in high pro le locations – Camden, Southwark and Wandsworth. Linda Bent, ABC Selfstore’s Group Operations Manager, has been looking for ways to improve revenue and recently stocked up with the SSA Retail Packaging Products, a decision that has brought great delight.

Quality Boxes

The boxes are much stronger which makes them a big improvement for storage and stacking. They all have handles which are more practical for carrying and this makes them easier to sell. “The appearance of the boxes and all the products are professional and this has helped us create a smart retail area,” says Linda Bent.

Shrink Wrapping Improves Sales

The boxes are shrink-wrapped in 5s and this helps everyone. “Now we have the shrink wrapped packs, it is easier for the customer and the staff to carry the stock. The key bene t is that we no longer sell single boxes. No one complains about buying ve at a time and they generally buy a couple of packs. As a result we are selling more boxes,” says Linda. Bubble wrap is selling better too. The pre-packed rolls of ve metres are professionally packed so they are tight and neat. “The delivery of these with a presentation box is so helpful for displaying. They look better, take up less space and save the staff time cutting and packing bubble wrap when they could be doing follow up sales calls,” says Linda.

ABC Selfstore branded boxes

Service Bene ts and Discounts

ABC Selfstore now has one supplier for all its retail products and this has made ordering and invoice payments easier; from the store managers to the accounts department. “We have obtained discounts when placing orders across all three stores. Our deliveries are con rmed with the dates and times; enabling store staff to schedule their time for receiving stock; thus not leaving the facility unattended. We struggled with quality previously and found that as we got to the bottom of our stock pile, boxes had not been stuck properly and we were left

with items we could not sell. This, plus improved margins on the products, has given us the opportunity to improve retail sales,” says David Milton, Managing Director of ABC Selfstore.

Retail Packaging Products – a division of Smithpack Group

Charlotte and Nadine selling more bubblewrap with the boxes.

Charlotte Okosun and Nadine Williams of ABC Southwark store – Selling 5 boxes at a time

Find out more and view the complete range of products on:

www.retailpackagingproducts.co.ukOr telephone 01322 338080


pg17 Smithpack.indd 1 22/10/07 23:33:01

Expansion for Lock N Store on Tyneside

(Left to right) Fred Hoult, Managing Director, Leanne Bone, Manager and Mark Brown, Finance Director of Lock N Store

Lock N Store has invested £250,000 in the t-out of a new warehouse offering 82 additional units to business and domestic customers. Lock N Store, one of Tyneside’s largest self storage companies located within Hoults Estate in the Ouseburn area, was set up in 1998 with just 28 units and has steadily increased in size as demand has grown. It now houses 840 exible do-it-yourself storage units based on one site. The company has particularly seen growth from businesses and home-owners looking to declutter and use space more ef ciently. The new units, installed by Active Supply & Design, are housed within a newly

refurbished 6,000 sq ft warehouse along with of ce accommodation for six full time staff. An additional member of staff will also be recruited to help operate the units. The company’s sales have shown steady growth at ten per cent in the last year with turnover now in excess of £400,000. The company expects continued growth in the medium term and hopes to achieve annual sales of £500,000 in the near future as a result of the expansion. Lock N Store offers storage solutions starting from £5 per week in sizes ranging from 16 sq ft lockers to 1,250 sq ft warehouse units. They are proving popular with businesses looking for

extra storage space either through relocation, downsizing or expansion as well as domestic customers looking to move home or free up more space. The

How would your organisation cope in a crisis?

company offers 24-hour access to units, 365 days a year with CCTV in every warehouse and on-site security guards outside of of ce hours.

A new online assessment tool developed by BSI British Standards will allow organisations to determine the adequacy of existing plans and develop con dence in their Business Continuity Management (BCM) strategies. The threat of terror and natural disaster should be a concern to UK organisations of every size and sector. But faced with such disruption, how many have a Business Continuity Management system in place which will allow operation to continue throughout a crisis, meet moral and social responsibilities and satisfy stakeholders? Business Continuity Assessment Online, sponsored by Marsh, a leading insurance broker

priorities. The tool contains an enhanced help option which gives guidance on interpreting the questions and explains what the answer options deliver in practice. Completion of the online assessment will help an organisation develop a comprehensive understanding of the principles of Business Continuity Management and the component parts of BS 25999-1. Users will develop an appreciation of continuity planning and better understand how to develop, implement and manage Business Continuity plans. Business Continuity Assessment Online will identify areas of improvement and add value

to businesses. Mike Low, Director of BSI British Standards, said: “The Business Continuity Assessment tool will help organisations understand how to prepare a business continuity plan in a simple yet effective framework and will give added value to their business by enabling them to demonstrate improved risk management.” The tool is aimed both at SMEs and listed companies looking for a cost-effective means of preparing a Business Continuity plan and understanding the capability of companies in their supply chain. BS 25999-2 will be published later this year and independent assessment will be available after publication of part 2 of this standard.

and risk advisor, uses 191 questions and multiple choice answers covering each aspect of the British Standard BS 25999-1 Business Continuity Management Code of Practice, to nd out where organisations are doing well and what improvements can be made.

Responses to questions such as ‘Is the importance and value of business continuity management understood and appreciated at the organisation’s highest level?’ are used to suggest actions, which are ranked high, medium and low, helping to determine

Responses to questions suggest appropriate

actions


pg18-25 News.indd 1 23/10/07 23:31:55

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Second Portsmouth location for Lok’nStore A new site in North Harbour, Portsmouth has been acquired by Lok’nStore Group Plc The freehold site extends to almost two acres and was purchased for £4.3mn funded from existing facilities. The land will be used to build a new self-storage centre of around 60,000 sq ft taking the total Lok’nStore portfolio to 1.1mn sq feet. The store, which will front the A27 to the north of Portsmouth, is opposite a busy retail area and is prominent to the M27. Commenting on this acquisition Andrew Jacobs Chief Executive of Lok’nStore said: “With

our recently expanded Fareham store and the new central Portsmouth store, this additional site will position Lok’nStore in highly visible and easily accessible locations across the Portsmouth area which is developing rapidly. “We are actively searching for new sites to continue our growth, and are committed to our stated expansion plans with £20mn already committed to our pipeline. The current market circumstances may provide a useful buying opportunity for strong operating businesses like Lok’nStore as property investors retreat from the market.”

Warm winter for customers’ goodsCustomers at Easistore’s Crawley self storage centre will be nice and warm this winter. This is because the company has tted Reznor V3 gas- red warm air heaters to automatically maintain a comfortable 14 to17°C with excellent distribution of heat, protecting stored goods from frost and damp. It is Easistore’s priority to ensure its customers’ goods are safe and damage-proof at all times, especially during the colder part of the year when frost or damp could potentially compromise stored items. A Reznor heating system compromising a powerful V3 warm air unit on each of the four oors was installed by Hadene Engineering of Chatham. The strategic positioning of each unit on the rear wall of the building

is designed to ensure optimum air distribution around the oor. The units achieve an excellent throw which circulates heated air around the wide corridors and in the air space above the storage rooms. The Reznor heaters work entirely automatically, ensuring temperatures never drop below the set point and frost and damp cannot penetrate the building. Modulating burners within the unit maintain cost effective operation. Paul Glenister, Managing Director of Easistore, comments: “Having used Reznor heaters in all our other self storage centres, we were very impressed with their reliability and ef ciency and didn’t hesitate to specify the latest product in our newest centre.”

Andrew Jacobs

Time for REITs reformReform of the REIT regime launched at the beginning of this year is now overdue, according to Andrew Jacobs, Chief Executive of AIM-listed Lok’nStore. In his opinion there is no incentive for AIM listed companies to become REITs. “I don’t see why they should exclude AIM companies from it. We certainly wouldn’t go to the main market to get REIT status,” he is reported in Estate Gazette as saying, adding that other self storage operators have considered REIT status following Big Yellow’s conversion to the tax-

ef cient vehicle. “The company is very well insulated from a corporate tax perspective and we would lose that by being listed on the main market,” Andrew said.


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Big Yellow announce fi ve store boost

Board appointment at Big Yellow

Big Yellow has gained planning consent for a total of 293,600 sq ft since its quarterly results in July. The company has gained consent at ve sites:

Location where planning Net lettable Estimated store consent received area opening dateMerton 75,000 sq ft March 2008Shef eld Hillsborough 60,000 sq ft Summer 2008Poole 53,300 sq ft Summer 2008Liverpool 45,300 sq ft Spring 2009Bromley 60,000 sq ft Spring 2009Total 293,600 sq ft

These consents, together with the existing planning consents on its sites inBalham, Barking Central, Ealing, Fulham, Kennington and Sheen, result in 11 ofits pipeline of 28 stores now having planning permission. Of the remaining, Big Yellow has submitted four applications, which are expected to proceed to planning committee in the next three months. The majority of the remaining applications will be submitted by the end of the nancial year. One site remains the subject of an appeal which will be heard in October of this year. When fully built out, Big Yellow’s development pipeline will provide it with

a further 1.7mn sq ft of storage space, taking the total to 4.4 mn sq ft. It has acquired the freehold of its store in Chelmsford, and a site for a new store in central

Guildford. Jimmy Gibson, Chief Executive Of cer, said: ‘We are delighted to have secured these planning consents, and are hopeful of obtaining further consents during the remainder of the year.’

John Trotman has been appointed as an executive director on the board of Big Yellow Group PLC as nance director. The role was previously exercised by Jimmy Gibson who was also chief executive of cer, a position he has held for about four years and will retain. The company had announced in May that it intended to split the roles of CEO and nance director to re ect the increasing size and complexity of the Group. John is a chartered accountant and former senior manager of Deloitte & Touche LLP, where he specialised in the real estate sector and self storage. After leaving Deloitte in 2005, John worked for a subsidiary of the Kajima

Corporation involved in the large Silvertown Quays regeneration project. Commenting on the appointment Jimmy Gibson said: “We are delighted to welcome John to the board. He brings rst class accountancy experience combined with very current knowledge of the real estate and self storage sectors both of which are valuable assets as he takes the nancial reins at Big Yellow.”

The show goes on for theatre groupIt was nearly curtains for local amateur theatre group, Old Town Theatre Company, until Anchor Self Storage of Blagrove, Swindon, stepped in to save the day. The theatre company was facing its last performance. It had to move out of one of its stores which it used for its sets, traditionally the

South African investor attracted to Lok’nStore

Audley Capital Management has raised its stake in Lok’nStore to 12.6%. According to a recent report in Property Week South African Julian Treger increased the holding to 3.38mn from 2.66 shares for the Audley European Opportunities Master Fund. According to Property Week Lok’nStore is 29% owned by Chief Executive Andrew Jacobs and Chairman Simon Thomas.

company relied on grace and favour for storage from members and could not afford commercial rents for storage. This was when Darren Howard of Anchor Self Storage came to the rescue of the theatre group with an offer of free storage, barring £4-a-month insurance.


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pg18-25 News.indd 3 23/10/07 23:32:05

Ninety hours to complete a gruelling 1,227km cycle race. It’s what Ian Dixon, Manager of Scotts Self Storage (Cumbria) Ltd in Carlisle accomplished between Monday 20 and Friday 24 August. The race was the 16th Paris-Brest-Paris event rst held in 1891 and now held every four years by L’Audax Club Parisian. Stephen and Jacqui Scott of Scotts Self Storage Cumbria sponsored Ian for the event which set off from St Quentin, near Versailles, from where 10,000 people cheered the 5,000 cyclists off. They had to pass through 14 controls on the race where the riders’ pass books were stamped to prove they had followed the correct route. It was a period of extremely wet weather in North West France – it never stopped raining. Ian’s sister Sheila was support driver for her husband Steve, one of a small group entered from New Zealand. Sheila wrote a blog of the event and in it she records that at Tinteniac she caught up with Steve and his colleague Anton when they had stopped for a rest in the provided

dormitory which doubled in the school term as an assembly hall! Somebody was carried out of the hall on a stretcher, the ambulance staff were in and out checking on riders. The cold was starting to get to everyone on top of the wet. It was still about 14 degrees, but once they stopped moving that was when the cold set in. To get time to rest riders had to ride faster than the set average of 14kph. Ian at this time was pushing on heading for the next outward control at Loudeac and Carhaix. It had rained constantly and the riders were soaked. The buffet food at the control was perfect – salty pasta dishes, semolina and rice puddings, bread and coffee. The riders needed to consume 7,000 to 10,000 calories per 24 hours. Ian said: “In every village the inhabitants were out to cheer the riders on. People were handing out free crepes and hot coffee – even in the early hours of the morning.” The French take their cycling very seriously. Sheila caught up with

Ian on the return journey at Carhaix at 8.30pm and reported: “His tour group had organised a bag drop and, of course, the bus was parked down at the bottom of the hill. He got his gear then the heavens opened. Sheila sheltered with the bags under the bus while Ian grabbed some sleep in the bus. At Mortagne au Perche the closing time for Ian at the checkpoint was 5.30am, but an extra two hours had been added by the organisers due to the dreadful weather conditions. Ian nally staggered into the control at 6.30am. Wet, soaked, in a bit of a daze after cycling for almost 18 hours non-stop. This had been his worst night of the whole ride with torrential rain and fast descents. “I knew I was pushed for time so when Sheila appeared at the control my major concern was to get to the control/check point asap, so no time was wasted on family introductions. Yes, I was de nitely on auto pilot at this point!” Luckily Sheila had her car close to the control point and after checking in Ian was

able to refuel on water, ham and cheese sandwiches and pain au chocolat, plus get a 20 minute power nap. “I must have recovered well because I managed to average 20 kph to the next control at Dreux, some 70 to 80Km away.” Ian nished in the allotted time, but 30% of the contestants had fallen by the wayside when the usual gure for the race is 10%. On the way back to hotel after the race both Ian and Steve were alternatively speaking then in mid sentence falling asleep, then start talking again. The amazing thing is that all the contestants are amateurs. They do it for fun!

Amateur cycle race tests stamina

Ian on his bike


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pg18-25 News.indd 4 23/10/07 23:32:07

Store-It meets Big Box criteriaBig Box Storage has upgraded its software system to Uniserve’s Store-IT program following trials of various systems. Between April and July of this year Big Box Storage owners, Peter and Mike Rayner, have converted seven of their centres located in the south and east of England, updating the information for around 4,500 customers and switching the data to the store-IT system. Each centre works on a stand alone platform, updating in real time and at the end of each day to a central server for management information to be viewed by store, by area or for the company as a whole. Peter explains: “Our choice of Store-IT was based on its well-developed enquiry (or prospect) system. Our bespoke system had been very much focused on achieving highest possible conversions from enquiries, and we had been disappointed that most systems were quite poor at providing a quality work- ow from initial enquiry through to conversion and then to rental commencement. “We worked with Uniserve

to develop its Store-It program to a higher speci cation that meets our requirements fully for enquiry handling, and which enables a company-wide overview of prospect information.” Store-IT integrates fully with all the most common access control systems, enables automated direct debit and credit card transactions, and is able to produce consolidated nancial information for import into accounting software packages. Commenting on the installation Dick Stolp of Uniserve said: “At the rst meeting with Big Box it became very clear that I was dealing with a highly professional organisation which was set to achieve an occupancy rate of more than 90% for each facility.” Because the self storage company bespoke system was initially not developed as a multi-site system and facility number seven was coming on-stream, the decision to explore the market for another system was made. During the market research it became very clear to Big Box that it required an up-

to-date information system which would gain a complete insight into all qualitative and quantitative aspects of all potential customers. Dick continues: “During the rst meeting with Peter it became clear to me that he was looking for an innovative system which could, against the lowest hardware costs and minimum impact of system engineering, provide the company with up to date (real-time) nancial and operational information of each individual site or whole company. “It seems to be that Store-IT with Store-IT on-line could meet the requirements of Big Box. With the input of Big Box, Uniserve was able to adapt Store-IT on-line to Peter’s requirements. “Through an automated conversion tool Uniserve could easily convert each facility and support Big Box during this process when needed. Although Uniserve is capable of converting more than one facility a day, both companies decided to convert only one facility every two weeks. In this way the customers had time to get used to the new system before a new conversion was started.”

Space Maker goes to Babcock and Brown for £63mnAustralian fund manager Babcock and Brown’s £63mn acquisition of US backed Space Maker was led by Jones Lang LaSalle Corporate Finance. The Space Maker Group was established in 2000 by American David Hicks and Dougald McLachlan who had met when working for the then US-owned Access from which they resigned in June 1999. They will remain with the business to help Babcock and Brown’s expansion plans. It took a year for David and Dougald to fund their venture, with the help of the Royal Bank of Scotland, before opening their rst store in Romford, Essex. The company now operates ten stores totalling 484,431 sq ft net lettable space and employs 50 staff, primarily in London and the South East, with one centre in Leeds. The Space Maker Group and Babcock & Brown intend to grow the business. With the current acquisition Babcock and Brown will own 37 self storage properties across North America, Asia and the UK.


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pg18-25 News.indd 5 24/10/07 13:13:37

26

Conference News Advertorial

Active Supply & Design is sponsoring the first Self Storage Association Autumn Conference.To be held at Hellidon Lakes, Daventry 13-14 November 2007 it will also feature a trade show. In an industry with a seemingly high turnover of staff, Active Supply & Design break the mould with the longest serving design team in the self storage market place. With a combined experience of twenty years, the team consists of Greg Dale, Andy Atack and Stephen Hughes. Having such a wealth of experience is one of the key factors in Active’s continued growth, instilling con dence in a diverse customer base, ranging from new entrants to the market, established single facility operators, through to multi-site plcs. Designing self storage facilities successfully is dependant on several key issues. An accurate and detailed survey of the building in question, knowledge of an appropriate unit mix and correct proportioning of units which all help to optimise the available space within a building thus creating extra revenue which in turn, enhances pro tability. Design Manager Greg

Dale whose creative portfolio includes Storage King, Red Devil and Kangaroo Self Storage commented, “In my nine years at Active I have seen many changes in the market, from 1st generation facilities comprising of basic partitioning works, right through to the latest 4th generation facilities utilising multi-tiered mezzanine oors and the latest access control technology. The key is to provide the correct unit mix for the operator in question, which can largely be based upon location; proximity to a College or University for example requires a good proportion of lockers and small units to satisfy student demand; a more commercial location however requires larger units for business customers.” Greg’s nine years’ experience has enabled him to obtain a good knowledge of most localities, allowing him to combine that knowledge with customer preference to provide effective design solutions. Stephen Hughes, whose primary responsibility is the design of facilities for the UK’s largest operator – Safestore, added: “Every job is different and requires a fresh and logical approach to obtain the results that we and the client strive

towards. This can only come about if the team all work together and have the same dedicated approach, utilising our experience to good effect.” With more than six years service with Active designer Andy Atack, who has designed facilities for clients such as Big Storage, City Self Storage and Pickfords Self Store said, “It is within our own interest to ensure our continued success, that our clients ll their stores and achieve good returns from their investments, in the quickest possible time frame. The key to good self storage design is simplicity. We aim to provide layouts

that are simple, owing, methodical and ef cient. Designing these facilities is an art; learnt and honed by time, with only experience ensuring results on every occasion.” This small, but ef cient design team is a key component in Active’s continued success and is one of the many corner stones in ensuring that any business placed with Active will culminate in a mutually bene cial experience for both parties. Delegates to the conference will be able to meet the Active Supply & Design sales staff on its stand at the trade show.

Active sponsors first SSA Autumn Conference

While the design team members at Active Supply & Design have been with the company for some time, so have the sales staff, seen here on the company stand at the self storage conference in Paris earlier this year.

Self Storage Focus 2007 Volume IV

www.askactive

.comACTIVE SUPPLY AND DESIGN



pg26 Advertorial.indd 1 22/10/07 21:47:41

The level of direct investment into the self storage sector is likely to break records in 2007. So far, the year has been characterised by a number of new investors who want to own self storage assets. It started with the £40mn sale of Armadillo Self Storage to HSBC in January. The summer brought the acquisition of Space Maker by Babcock and Brown. We also saw the sale of City Box in Holland which attracted the attention of overseas investors. These are all deals in which Drivers Jonas have had an involvement. Historically, self storage was owned either leasehold or freehold by the self storage operator. These recent deals are from investors who have separated ownership from management. This is a signi cant development as now property investing institutions are buying self storage properties. But what has caused this, and importantly, what is in store for the sector, as we enter more choppy waters in the property and nancial markets? There are four main reasons why there has been such as surge in investment this year.

Yield Compression

Firstly, the property market has witnessed a sustained period of yield. With borrowing so cheap and high loan to value ratios available, there was not the need to risk a signi cant amount of equity. Some investors saw property as an “easy money” option, with the ability to buy property with a large chunk of debt, and to trade the property over a relatively short time period in which yields fell – generating very handsome pro ts. The fall in yields is shown in the following graph which shows how yields have fallen from over 7% in 2002 to below 5% in 2007. It also shows the recent large increases in Swap rates.

Debt and Equity Markets

The banking world is the fourth reason. The new investors have all borrowed money to fund their purchases. The willingness of the major banks to lend to purchasers based on the value of the property as a going concern gives the sector appeal to these investors. Coupled with a bull run in the private equity market, there has been more

As a result of these falling yields, investors have looked at the less traditional and different property types in order to nd the higher yields that they want. Some have found self storage!

Knowledge

The second reason for the increased level of investment is that there is now a much greater level of awareness of the sector. Investors have been able to educate themselves as more information is made available, be it from the publically listed companies, to published research such as the SSA Survey and other sources from within the industry.

Maturing

The third reason is that the sector is beginning to mature. Most readers of this magazine will understand how it has developed, but investors are drawn to it as it is on its way to becoming a “tried and tested” asset which has relatively predictable cash ows. Investors like to look at risk – and as the sector delivers properties that generate successful positive cash ows, the risk pro le is reduced. There is a strong track record of success.

Self Storage Investment: What’s in Store?By Ollie Saunders, Partner, Drivers Jonas

4

4.5

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5 Year SWAP All Prop Initial Yield


pg27-28 Property.indd 1 22/10/07 23:11:25

cash looking to invest in self storage than ever before. Looking Forward …

The storm clouds gathered over the summer and we have entered choppy waters in the property and money markets. At the start of the summer, yield compression has largely come to an end and some yields had gone into reverse. Much of the reason for the slackening in yields is put down to increasingly expensive cost of money, especially ve year swap rates and the relative attractiveness of returns from other asset classes. Late summer brought some very real corrections to the commercial property market dampended by the credit squeeze. The headlines in September were all about Northern Rock, but behind the scenes some lenders are reducing loan to value ratios, or even shutting up shop to some new lines of business. However, the fundamentals of the sector are still strong and whilst there will not be an immunity to the turmoil in the markets, there should be a continued level of interest and some innovative deals. But why?

Attractive returns

Investors buy assets in order to obtain an income and to sell at a future date for a pro t. There is still a self storage yield gap between self storage and other investments, meaning that the return from a self storage investment is

still higher when compared to other more traditional investments. As the sector continues to mature and grow, this perceived risk will diminish and the gap will narrow - making the self storage still an attractive investment today. The potential to convert a portfolio of stores into a REIT makes the sector even more attractive. Unless there is a major readjustment in the

harder to develop. As operators become bolder, and consumers more sophisticated, will we see larger, more modern fourth generation facilities? Will these make the older, second generation stock in need of a major makeover in order to appeal to the more knowledgeable investor? It is interesting to draw parallels with the hotel sector. The ownership structures are much more advanced that in the self storage sector. Most facilities in the UK are owned either freehold or leasehold by the operator. In the next few years, property owners may offer JVs or management agreements in a similar way to those that they offer in the hotel sector. Could turnover based rents, pro t shares and management agreements be commonplace so that operators can secure the best sites? The overriding message must be that there still remains an appetite from a new breed of investor. Those that can deliver good quality new stock and keep the consumers coming through the door should see the sector safely sail through these choppy waters.

tight supply of property, the laws of supply and demand will mean that there will also be upward pressure on values. In order to meet the demand for new sites, there will have to be some innovation. In the current planning environment, we may see more mixed use developments integrating self storage, and stand-alone facilities will become

commercial property market, it is likely that there will be downward pressure on self storage yields. And as operators get more sophisticated in getting the highest possible income out of sites, the increased incomes and falling yields could see values continue to rise.

Rates of growth?

The rate of growth will always be constrained in the UK market by the high barriers to entry - or in other words the lack of available sites. There are a number of examples where operators are bidding aggressively against each other for new sites and land values are now in excess of £6mn per acre in London. To me, this demonstrates con dence in the future from the operator and an acknowledgement that there can physically only be a limited number of sites. And if there are more investors looking at entering the market, with a

Self Storage Focus 2007 Volume IV28

Ollie Saunders is a partner at Drivers Jonas and has advised owners, operators and investors for a number of years. For more information, please visit www.driversjonas.com/selfstorage or call him on 020 7896 8149

pg27-28 Property.indd 2 22/10/07 23:11:28

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Self storage in Scotland Rebecca Walker heads north to nd out how members are faring in Scotland

Len Lothian in Edinburgh

Keepsafe Storage Centres in Dundee31

Scotland saw its rst self storage site back in the early 1980s when George Lomon experimented in an old redundant building in Glasgow. There are now nearly forty sites across the country from Glasgow to Edinburgh, Perth to Aberdeen. My trip up the east coast took me to Edinburgh, Dunfermline, Dundee and Aberdeen; there are clear differences in both the rate of expansion of the industry in the cities as well as the proportion of commercial to domestic storage. Domestic self storage in Scotland is dominated by those moving house. The buying and selling of houses in Scotland is very different from that of England and Wales; as you may be aware, it uses a sealed bids system. This results in many more people moving into rented accommodation, having successfully sold their house, until they can purchase a new one; whilst renting, people put many of their belongings into storage. The sealed bids system means the vendor is in control; this can make the buying of a new house a very drawn out process increasing the demand for self storage. The vendor of the house sets a price and invites offers in excess; buyers bid for the house often unaware of other offers. Once your offer is accepted you are immediately

under obligation to buy that property. With this in mind, you cannot really place several bids on different properties at once further delaying the buying process. The ever-increasing house prices in Edinburgh and Glasgow have slowed down the property market changing the demand for self storage. I visited Len Lothian U-Store in Edinburgh which now has a majority of commercial rather than domestic customers in its Edinburgh sites. Alistair Lothian believes there is now a greater supply than demand in the domestic sector in Edinburgh and Glasgow due to fewer people moving house. Looking at the

cities, buyers are being forced into smaller properties where they do not have suf cient space to store their belongings. Looking into the coming years, it seems likely that more and more people will use self storage to keep their windsur ng, ski and mountaineering kit where the price per square foot is that much cheaper than in the city centres. Moving up the east coast, I visited Fife Group in Dunfermline and Keepsafe Storage in Dundee. The self storage centres in these smaller conurbations, with populations of 45,000 and 145,000 respectively, have a majority of domestic customers. Residents of Dunfermline and Dundee enjoy plenty of space; indeed, the last high-rise ats in Dundee have just been demolished and houses are still relatively cheap for what you get (in comparison to nearby Perth, for example). With plenty of sites in both areas and not a huge market in Dunfermline, self storage has possibly reached its limit with regards number of sites. It does, however, look to be ourishing in both areas. Aberdeen, further north and east, is a different kettle of sh altogether.

statistics from the Edinburgh Solicitors Property Centre (who account for over 90% of houses bought and sold in Edinburgh) it can be seen that there has been a decrease in the number of sales of houses in the rst quarter from 2006 to 2007. Counteracting this, however, is the building of high-density ats in Edinburgh and Glasgow resulting in a future for long-term closet storage. With space at a premium in these


pg31-33 Scotland.indd 1 23/10/07 23:51:44

US Door ad.indd 1 23/7/07 20:30:19

A company van promotes Simply Self Storage in Aberdeen

It is the third largest city in Scotland (after Edinburgh and Glasgow) with a population of over 202,000 but it only has one self storage site: Simply Self Storage. Aberdeen is the European Oil Capital (as its road signs proudly claim) and it is quite a rich city, so why hasn’t the self storage industry taken off? According to Jon Wilson of Simply Self Storage, it is very dif cult to acquire sites on industrial estates

because the oil companies outbid everyone else. There is certainly a market for self storage in Aberdeen as land is at a premium and people are desperate to get houses. House prices have been increasing year on year and more and more people are having to buy off-plan to get a foot in the door. With plenty of people currently waiting for developments to be nished, there is strong demand for storage solutions. However, not many local residents know what self storage is and, until more sites crop up, it is unlikely that this awareness will increase. Once awareness is increased, the industry will be in higher demand but if the oil companies continue to dominate in the way that they have, it is hard to see how this can happen. Looking to the future of domestic self storage in Scotland, it is clear that the industry can continue to succeed. Different parts of the country face different challenges that appear to go hand in hand with the uctuations in the housing market. Scotland is different from England and Wales in not only the way they buy and sell houses but also in that most people have enough space. That being said, the fact that residents are prepared to pay for rented accommodation until they can buy their ideal home allows the self storage industry to offer a vital service; only time will tell as to whether the increase we’ve seen over the last twenty years can continue for the coming twenty years.

pg31-33 Scotland.indd 2 24/10/07 13:18:45

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2007 Volume IV Self Storage Focus35

In 1989 when Andy Patrick established Quickstore in Plymouth, self storage was a relatively new concept and still in its infancy. At the time there were only 14 self storage companies in the UK! Quickstore is now proud to be the major space provider in Devon offering over 125,000 sq ft of storage. The business was born as a result of a remarkable serendipitous situation. When carrying out a ve year rent review on a self storage operator on the books of his family’s property company portfolio, the tenant advised Andy that he was not making a pro t and therefore, was unprepared to pay the proposed increase. Seeing the potential in the market it was decided to buy him out. The rst job was to have the 1960’s warehouse building cleaned up. Originally built by Dunlop it was utilised for its tyre distribution and as such was constructed with signi cant oor loading permitting the construction of a mezzanine oor. Running Quickstore in conjunction with another business, Andy invested signi cant monies in renovating the property and installing security cameras: “The cost of tting out and security cameras was signi cantly higher than it is today,” he recalls. The excellent location near the city centre coupled with initial focused marketing including direct mailing and advertising in Yellow Pages helped to establish the business quickly within both the local domestic and business community. The desirable location is still proving bene cial with the recent opening of Drake Circus, the exciting new £200mn shopping centre, which has further increased Quickstore’s client base with more and more local companies utilising the centre for both

storage and business services. In 1998 Quickstore acquired another 11,000 sq ft building nearby which is dedicated to high security storage including archiving. Plymouth remains the head of ce, with an administration team as well as four full-time operational staff. The main building has 300 units; however a further two oors could be constructed with necessary planning. The new Millennium saw the opening of the Torquay store, a freehold building located on a busy roundabout. During a recent hectic two-week period, the manager rented out a staggering 72 units! The 250 unit store has already had one extension commissioned with another 50 unit extension well on its way. Due to it’s excellent “pseudo retail” location, it is the biggest group

Into self storage with serendipity

Exeter store manager, Steve Patrick (seated) with colleagues Alex Clarke and Mike Heagarty

Andy Patrick outside the Exeter Quickstore

pg35-37 Quickstore.indd 1 24/10/07 18:34:02

Reason Global Insurance is a trading name for Reason and Co (SE) Ltd, authorised and regulated by the Financial Services Authority

Reason.indd 1 24/10/07 00:54:04

contributor of packaging material and non-rental sales with some 80% of the company total. Quickstore also acquired a two-storey leasehold building, which opened in Exeter in 2004. The store is conveniently located on the large Marsh Barton Industrial Estate, which covers an area of approximately 1.2 square miles, making it one of the most signi cant industrial developments in the south West. There are plans in the near future to build a new relief road connecting to a large Sainsbury’s store which will increase traf c ow considerably and hopefully business. A recent extension with a new t-out by Active Supply & Design has produced a further 185 units giving a 40% increase in storage and created two new jobs. Thirty units have already been let in the rst two weeks and another extension is awaiting the departure of the current occupant. Although situated in the centre of a thriving business community, surprisingly the Exeter centre is 60% private occupancy and 40% business. Of the latter, document storage accounts for 10% of turnover.

Quickstore manages les and backup media for several well known national and regional companies offering document management, storage, and scanning, barcoding, a daily courier, general storage and con dential shredding and recycling. The Quickstore team work very

closely together, attending regular staff meetings where every last sale of a unit is analysed. “We have great staff who are very loyal to us. The company always look after them with ongoing training, team building events and good communication. “The team has a real family feel and we have a great social side to the business,” said Andy enthusiastically. He would like to send staff on the SSA training courses. However, Devon is a long way from London and the add-on travelling costs make this a very expensive exercise. As a result, Andy holds in-house training courses, introducing his own retail background knowledge as well as outsourcing locally where necessary.

Andy Patrick’s son Ben holds aloft a white carton

Passageway in the Exeter store


pg35-37 Quickstore.indd 2 24/10/07 18:34:16

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59

Terrorism InsuranceMembers who have regularly attended SSA meetings in the last three years will have heard the presentations by of cers from the Anti-Terrorist branch of the Metropolitan Police highlighting the need to be vigilant when accepting new storage customers. Posters highlighting the subject and what to look out for have also been issued to members. In addition, your premises may be at risk from events not involving a rogue customer. Many members choose not to insure for terrorism risks in any form, perhaps feeling the risk is one they are prepared to accept rather than pay additional premiums. For some operators perhaps it is a risk that has not been considered due to a lack of information on the subject!

Terrorism Insurance

Since 1st January 2003 the vast majority of UK commercial property insurance policies have an absolute exclusion of Acts of Terrorism but, upon request, the insurer concerned will offer terms for terrorism cover as part of their policy (they do this by arranging reinsurance with The Pool Reinsurance Company Limited). Terrorism cover is available in this way on customers’ goods in store as well as on the more obvious buildings, contents and business interruption covers.

What does it cost?

Premiums vary dependent upon the location of your premises, with inner cities attracting a higher rate than locations out of cities and in smaller towns. As an example of costs, we have recently presented a quotation for terrorism cover for customers’ goods in store at a location in outer London at a rate of £350.00 per £1mn cover. Locations closer to central London

cost in the region of £525.00 per £1mn cover.

Other Policy Covers

Employers’ Liability

Employers’ Liability cover is to a large degree governed by an Act of Parliament which has been in force since 1969. It requires insurers to provide cover for a minimum limit of £5mn. The law does not permit an exclusion relating to Acts of Terrorism. For several years insurers have, by convention, offered a minimum limit of £10 million but several now place an inner limit of £5mn for Acts of Terrorism, which would still mean any policy would comply with the law.

Public Liability

With a few exceptions there is no law applicable to this type of policy and thus insurers are free to offer terrorism cover as they see t. The basic intention of cover is to insure a business’s liability for injury or death to members of the public or their property. We are at present nding a divergence of approach by insurers, with some applying a total exclusion for Acts of Terrorism.

De nition of an Act of Terrorism

Terrorism is de ned in the Reinsurance (Acts of Terrorism) Act 1993:“acts of persons acting on behalf of, or in connection with, any organisation which carries out activities directed towards the overthrowing or in uencing, by force or violence, of Her Majesty’s government in the United Kingdom or any other government de jure or de facto.” It should be noted that the Home Of ce decide if an incident is deemed to be a terrorist attack, not your insurer. Whilst this gives legal clarity it also

means your insurer has no scope to pay you within the terms of your policy unless you have purchased terrorism cover.

Do you promote this cover to customers?

When operators buy this extra cover for customers’ goods in store they usually buy it to protect themselves and their businesses from a disaster of this type rather than providing this extra cover to customers. Arranging this cover on behalf of your clients may give you a marketing edge.

Conclusion

Without terrorism cover you may have a large gap in your insurance programme. Premiums to ll this gap are relatively cheap. You can provide important protection for your business and compensation for your customers in the event of a disaster of this nature. If the worst happened what would be the damage to your brand if you couldn’t respond to your clients’ losses?

By Ryan Squirrell ACII, Account Executive, PoundGates and Company

PoundGates and Company are Insurance Brokers specialising in the insurance of Self Storage Operators and can be contacted on 01473 216406 [email protected] www.poundgates.com


pg59 Insurance.indd 1 23/10/07 13:46:19

Storage King + S&L.indd 1 24/10/07 7:30:07 pm

59

almost £18,000 after she was teased, including references about the colour of her hair. However, a lot of the press reports were quite misleading and have led many people to think that mocking someone about their hair colour is now discrimination. The legal position is that there is not a separate law that protects ginger haired people any more than there is anything to protect people with big noses, short legs or glasses. Ms Primmer was able to successfully sue her employer for unfair dismissal and sexual discrimination (harassment); the latter because the comments about her hair colouring from her manager were lewd and of a sexual nature. She was able to bring her claim within the existing legal regime in the same way as if an employee:❐ was teased about being a “dumb blonde” she would be able to bring a sex discrimination claim; or❐ was being teased about being grey or bald; then they could formulate a claim under age discrimination legislation.

Law

All employers know that employees have signi cant employment rights. It’s good news that as an employer you appreciate what could be a potential issue before anything happens, that way you can do any damage limitation necessary. All employees - regardless of the colour of their tresses - have the following protections:(i) Against being bullied. Bullying can include name calling - as above - cold shouldering and belittling someone. Basically anything that violates someone’s dignity at work.(ii) Health & Safety such as an employer’s duty of care at common law and under the Health & Safety at Work Act 1974. You may have seen a case in the papers recently in which Deutsche Bank was found to be in breach of its duty of care towards

one of its employees, Ms Green, as the bullying she suffered from certain colleagues was a long standing problem and line managers knew or should have known about it. She was awarded over £800,000;(iii) Implied contractual terms of good faith;(iv) Protection from Harassment Act 1997 under which an employee won a case against Guy’s & St Thomas’ NHS Trust four years after he was dismissed. The facts are worthy of discussion as, to my mind, they are such that almost every employer in the UK could have a lurking claim. His claim was based on the fact that his manager was “excessively critical of his timekeeping and work”, imposed unrealistic targets and said he would be disciplined if he failed to meet them. She was also rude to him in front of staff. The crux of the matter is that he won his case and the Trust was held vicariously liable for his managers “harassment”; and(v) If there is any discriminatory aspect to the bullying then there can be unlimited discrimination claims for harassment (in 2006 the highest race discrimination award was for over £984,000).

Way forward

You have read the horror stories above but I believe that this can be dealt with simply. Firstly, you have not given any indication to say that Gail is upset about the teasing. I suggest you pop down next week and ask her if she nds it offensive, intimidating, malicious or insulting. The fact that she

Rooting out “Gingerism” in the work place

Dear Caroline and Philippa

I own three facilities and let my managers deal with the day-to-day issues. I went unannounced to the Slough facility, just to make sure that everything was up to scratch. I overheard the part time assistant calling out to our Slough manager, Gail, “Good morning Ginger” and then making an aside to her later on about her being a “carrot top”. I know that Gail describes herself as being strawberry blonde or titian, but her hair is really quite red. Gail is a great manager. The facilities she manages are always at full capacity and she has a brilliant conversion rate for phone enquiries - we call her Jonny Wilkinson! She is a robust manager who is able to hold her own with male and female staff and I know that she doesn’t suffer fools gladly. The only thing which concerns me is that I read in the paper recently that “Gingerism” is now discrimination. I don’t want either to lose her as a manager or to fall foul of the law and end up having to give her a huge stack of cash - as I know that people can get tens or even hundreds of thousands of pounds in compensation.

What should I do?

Yours Mr Blonde

Caroline Doran Philippa Robbins

Caroline Doran, an employment law specialist with SSA Supplier Member Rooks Rider, along with the newest addition to her team, assistant solicitor Philippa Rob-bins, explain the pitfalls of work place banter

Dear Mr Blonde

What is Gingerism?

The term ‘Gingerism’ was splashed over the papers recently after a red-headed waitress was awarded 2007 Volume IV Self Storage Focus

pg41+43 Employment.indd 1 23/10/07 13:39:37

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is the manager is an indication, though not conclusive, that she is not being bullied. The norm is for someone junior to be bullied by someone in authority over them although it is not inconceivable that there could be role reversal. Everything you have said suggests that Gail is a strong person - but you need to nd out. If she is in any way upset let us talk again, as what can be useful is a short training session or role play session to staff about what is acceptable and unacceptable behaviour which can remedy the problem quickly. Another bene t of these training sessions is an employer can be liable for harassment or discriminatory acts unless it can show the employer took “such steps as were reasonably practicable” to prevent the offending employee from doing the offending act or behaviour. As such a training course, rather than simply updating or introducing a policy which, left to their own devices, no employee

or manager will read, will give you greater protection from claims. Also, if her reaction is that she “gives as good as she gets” please do nd out a little more information for me. If her responses stray onto dangerous ground we may need to take pro-active steps to ensure your facility has a professional atmosphere. If Gail is relaxed about the comments, make sure you either make a le note con rming that she does not want you to take further action or ideally an e-mail con rming this and reassuring her that if things change you want her to let you know asap. Some employment lawyers favour “no teasing clauses” in contracts, but our view is that they would be as impractical as the “love contracts” which were bandied about to try to prevent work relationships. Teasing and banter is quite normal and acceptable. In fact without it, working life could be sterile. It is only when the light hearted friendly teasing

crosses the line that employers and employees need to take prompt proportionate steps to protect themselves.

Kind regards,Caroline Doran and Philippa [email protected] or [email protected] 689 7000.

The content of this article is provided for general information purposes only and does not constitute legal advice. It is not a substitute for obtaining legal advice on a speci c query and is not intended as such. Whilst every reasonable effort is taken to ensure it is up-to-date no responsibility is accepted by the author or Rooks Rider for any consequence of relying on it.

pg41+43 Employment.indd 2 23/10/07 13:40:10

By Tammy LeRoy

Cell towers and self storage seem to go together like baseball and hot dogs. “I’d say an inordinate number of cell tower sites are located at self storage properties,” says Ryan McCarthy, project manager for Tucson, Arizona-based Larson Camou age. Indeed, since wireless phone companies began a tower-building frenzy in the early 1990s, many self storage operators cashed in on the opportunity to turn a 10-by-20 unit into big ancillary income. And those opportunities still exist.

The Way It Works

Wireless phone companies - there may be as many as 10 in your area - must add tower locations to keep up with demand in all of their markets.

Most self storage sites have the right zoning requirements for cell towers, and if they happen to need one in your vicinity, it can be a great opportunity to add to your bottom line as well as your valuation. How do you know if a cell phone company needs a tower near your facility? “The Holy Grail of this business is to nd out who has the maps that tell them where they need service,” says Ray McRae, vice president of operations for Mesa, Arizona-based, Storage Solutions. “… the carriers keep those maps close to their vests.” Some towers are owned by wireless companies such as T-Mobile, Verizon, Nextel, or AT&T. There are also tower companies that build and own towers and rent the slots out to different carriers. Both sometimes use brokers to locate sites. Most towers built now are multi-tenant or “co-locatable” sites because many municipalities require it. Storage Solutions facilities throughout the Southwest are now home to 13 towers. “In the beginning, the brokers representing the wireless companies would nd us,” he says. “Over the years, we’ve gotten a reputation for being friendly landlord, so now the wireless carriers come to us.” McCarthy believes it will be a long time before cellular companies have all the coverage they need. “We’re doing a lot of work in places like Phoenix and Los Angeles where you have to do in ll. With the modern phones that are e-mail capable and can even download full television programs, the amount of bandwidth those require really drains the network capacity.” Wireless companies must build new towers to accommodate that demand. In a large

metro area, each carrier has hundreds of sites. The higher the tower, generally, the more coverage area. But tower height is typically restricted by the jurisdiction. Larson’s company builds camou aged towers - sometimes called stealth towers - which disguise cell towers as palm trees, pines, cactus, agpoles, or a variety architectural features. Some jurisdictions require these. Phoenix zoning of cials, for example, are considering ordinances to regulate the looks of stealth towers - right down to how many fronds a palm tree should have. The materials used to construct these towers are radio frequency-friendly, of course, but are also UV-resistant and very durable. McCarthy says maintenance is minimal.

Perpetual Income

Jay Hoke, executive vice president of York, Pennsylvania - based Investment Real Estate Management (IREM), installed a cell tower at one self storage site six years ago, and he is actively pursuing opportunities to add towers to his other sites. In Hoke’s experience, it’s dif cult to make contact with the right person at the big wireless companies. “Going through a broker who already has all the contacts is

Cell tower hosting:Can your facility be home to a money maker?

Tammy LeRoy

A pine tree with cones of a different kind

Larsen Cam

ou age


pg44-45 USA.indd 1 23/10/07 13:49:35

probably the most ef cient way to do it,” he says. “The beauty of it for us is that these tower companies take care of all the entitlement process,” says McRae. Typically, the leases Storage Solutions negotiates run 20 to 25 years with a 15 percent rent escalation every ve years. In most cases, the carrier is allowed to terminate the lease. McCrae says that, in his market, tenants on the towers are paying up to $1,600 per month. With only two carriers, that results in an additional $38,400 annually. At a .075 cap rate, that would equal a $512,000 increase in project value. Negotiating a good deal is not dif cult as long as you consider various contingencies. “We build in annual increases for the rental space for the tower,” Hoke says. “We also get a stipend every month from any company they add.” The tower can hold ve tenants, and the bonus is that each of the users rent additional storage space for their onsite equipment. “It’s a ve-year lease, and it can be built into your contract that whoever uses the space on the tower must rent a minimum amount of

storage space from you also.” In McRae’s experience, working directly with wireless carriers instead of a tower company has resulted in better deals, but he cautions that the wireless industry is volatile. Mergers are frequent and can affect your agreement. “In a merger such as the Sprint/Nextel union, for example, the tenant could tell you that, since you have both a Sprint tower and a Nextel tower, they will need to renegotiate the lease on one of the towers,” says McRae. They may threaten to not renew the lease otherwise. “A lot of unsuspecting people will renegotiate that lease for less money, thinking it’s better than losing it altogether,” he says. “What we’ve found is that they still have to support the same call volume, so they still need both towers; 98% of the time, it’s just a farce. They weren’t ever going to stop using that other antenna.” If a tower tenant does leave, McCrae has a reverse clause in his lease that gives Storage Solutions the option of having the wireless carrier put the facility back the way they found it or simply walk away. In the latter situation, the operator keeps the tower and they are free to rent to other wireless tenants. “But that’s tricky,” says McRae, “because then you’re up against FCC regulations that say you have to have a carrier

on that tower or it’s got to come down. So the cell companies think they have the upper hand on you.” McRae will continue to add towers wherever feasible. “We have an endearing term for our Tatum Ranch facility, which has four towers and a communications satellite just on that one property,” he says. “We call it our ‘tower farm.’” Hoke, too, is hoping to add more towers. The only slight drawback he has seen is the after-hours access requirements of the wireless companies. Still, Hoke says he would recommend the plan to any self storage operator.” It’s a great way to get some additional income from your property,” he says, “and all of the approval process falls on the shoulders of the cell tower company.”

Tammy LeRoy is Editor of Self storage Now and Associate Editor of Mini-Storage Messenger magazine.

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46

Members and suppliers mingled at the Summer Members’ Meeting and barbecue

John Lee and Emil Sohrab (James Taylor Construction) Peter Monk, Paul Delo, Peter Varrell, Tom Wicks (Britannia Group)

Nigel and Timothy Philips (Philspace) and Martyn Dickinson (Active Supply & Design)

Robert Morley (Derbyshire Self Storage) and Martin Bazeley (Barn Store)

Jimmy Gibson (Big Yellow) and Gareth Lewis (BPF) David Lyne, Michael Homan (Steel Storage), John Cole (The Space Place) Derek Murray (Currie Easy Self Storage)

Self Storage Focus 2007 Volume IV

pg46 Members pics.indd 1 23/10/07 13:41:46

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5

In the last edition Paul Fahey, the President of FEDESSA, indicated that the Federation had come of age. It certainly now has 13 national association members, and it is also building links with operators in Austria, Hungary, Latvia, Norway (hopefully soon to become a member), Poland, Portugal, Romania and Russia. Hence the large majority of the players in the European industry are represented by it. Furthermore there are links with its sister associations in the United States of America, Canada and Australasia and latterly there has been contact with the industries in the Gulf States and in South Africa. Additionally the supplier network is closely in touch through various national bodies. Externally FEDESSA has made its mark and it is providing a common voice and a coordinated message for the European industry to international and European legislative bodies (European Commission, European Parliament, Council) as well as standardisation bodies (CEN, ISO) when necessary. With the assistance of its support communications company, Weber Shandwick, it is keeping an eye on regulatory developments and, where appropriate, will try to in uence policy outcomes so that the continuous expansion of the self storage industry in Europe continues under favourable conditions.

For any “doubting Thomases” on the purpose of a Federation and, for that matter on the need for a national association once the industry reaches a certain size in that nation, please note what has been said in the foreword to the UK part of this magazine. The number and the complexity of the issues in which the UK Association is involved have risen recently. This is a direct result of the industry reaching a level of maturity and becoming known not just to potential customers but also to governmental and regulatory authorities. There is no doubt in my mind that there is much more likelihood of success in dealing with such issues and conducting effective lobbying, when proceeding as a strong corporate group. There is absolutely no doubt that this is an exciting time to be in self storage in Europe. The UK may well be seeing a period of consolidation whilst the industries in a number of countries including the UK are growing successfully. The Australians have certainly made their move in UK with the management agreement between Macquarie Bank and Storage King and the recent acquisition of Space Maker by Babcock and Brown. Will we see more? Or will we see the Americans returning? Whatever future industrial activities may be, FEDESSA realises that it must now enter a new phase in its own operations.

With the draft European standard about to complete its Public Enquiry stage the working group is preparing to meet again in January 2008 to nalise the document for what will hopefully be its nal stage. It certainly appears that nations are supportive of what has been achieved in this document. Meanwhile the General Council of FEDESSA will be meeting before Christmas in Brussels to decide upon the next stage in its evolution. It believes it must be able to provide better support both to the smaller associations and to individual companies in Europe who do not have a national body to turn to. But it will also be searching for other ways of enhancing its bene ts to you all and ensuring that the industry in Europe is better catalogued than at present. Before signing off may I say how much we are hoping to see as many European operators, and those interested in the industry, as possible at FEDESSA’s annual Conference next year in Rome. It takes place on 7 to 9 May; further details will follow shortly.

Yours sincerely,Rodney Walker

It is a matter of strength through unity when dealing with the EU

2007 Volume IV Self Storage Europe

Euro pg5 FEDESSA Editorial.indd 1 24/10/07 00:01:46

Jeremy Dunn, Marketing, Sales and Operations Director, City Self-Storage, extols the bene ts of multi-national operations

With a history stretching back to 1993 and a business spanning 38 sites in seven European countries, City Self-Storage can rightfully claim to be a pioneer in the still-emerging European self storage industry. Although there are many strong national and local self storage players dotted around Europe, companies with genuine experience of building a multi-territory business across the rapidly changing, economically and culturally diverse European Union remain few and far between. With operations stretching from Norway to the Czech Republic, City Self-Storage has direct experience of introducing the self storage concept to different European audiences, of marketing it, adapting it to local tastes, building it out and, most importantly, generating a return on investment. With 12,000 customers enjoying our different approach to the business, City Self Storage has clearly found a formula for European success. So, what has the adventure taught us, and what can the rest of the industry learn from our experience?

Perhaps, the biggest tip we can give is to take a customer-oriented, rather than a property-oriented approach. This business is about people, not real estate. It is about meeting the needs of private and business customers with exible storage solutions, and

Lessons from a European adventure

about being entrepreneurial and locally adaptable. For example, the housing market in Denmark is relatively slow, which directly affects our business targeting private movers, and the surge in small and medium-sized enterprise in the new European Union member states of Czech Republic and Poland, means that solutions targeting SMEs is essential for success. Meanwhile, in Italy, building our business depends as much on networking and building personal relationships as conventional marketing techniques in other countries. In other words, local adaptability is essential. In Europe, there is no cookie-cutter approach to success. But, on the other hand, having a business spread across multiple markets does bring collective bene ts. Each country may have its peculiarities, but together, they make us stronger. The very different

One of City Self-Storage’s new promotional photographs

Bologna, Italy6Self Storage Europe 2007 Volume IV

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economic landscapes across which we operate – such as dynamic Spain versus the more conservative climate in Italy, or the mature market for self storage in Norway versus the emerging industry in Poland – mean that we can spread our risk between markets. If business is slow in one country, or it is taking time for a new market to take advantage of the self storage concept, then we can offset the longer return on investment against countries where business is stronger or more established. Being multi-national also means we can bene t – and our customers can bene t – from economies of scale. We can take the pick of the best suppliers from seven countries, in terms of price, reliability and quality. Whether it’s sourcing something as simple as door labels or as complex as web design, we can draw on a pool of cost-effective solutions rather than needing to hunt for a new supplier in each country. Scale also means we can share experience and best practice amongst

marketing techniques, giving us a benchmark of best practice to apply elsewhere. In Italy, our local manager has become an expert in organising events, and provides invaluable tips and advice to colleagues in other countries. And our local businesses can also learn and bene t from our Scandinavian heritage. Having been founded in Norway in 1993 and being part of the family-owned Selvaag Group, we have a distinct culture of professionalism, trustworthiness, care for the environment, and creativity that permeates everything we do. We believe in treating people fairly and working to consistently high standards of quality. Selvaag also has a heritage of pioneering - investing in new markets where it believes there is long-term potential, and taking time to build a point of difference with highly ethical and high-standard business practices. At City Self-Storage this ethos can be seen in how we have gradually built

our European network. Whether it is selling techniques, training, retail experience or marketing, we can draw on a wide pool of know-how. For example, in Spain we have enjoyed particular success with our segmented

our business in Poland and the Czech Republic, introducing the entirely new concept of self storage and gradually educating the market about its value for business customers, private ‘lifestylers’ and movers.

Like some other successful Scandinavian brands in other business sectors, we believe our Nordic roots give us a distinctive point of difference in the self storage market, especially as we can combine international reach and local expertise, with a guiding mentality that is rmly rooted in the best of Scandinavian business practice. The Selvaag Group’s expertise in real estate – it is best known as a builder of new homes in Norway – has guided our thinking about the question of being customer rather than property focused. Unlike some of our competitors, we believe that a key to succeeding across many different European markets is to be as exible as possible about how we manage our property portfolio. We don’t buy our properties but manage them as leaseholds. This means we can leave the maintenance of the buildings to the landlords, so that we can focus on delivering high-quality service. This not only delivers a faster return on investment and allows us to open new sites more quickly – we had 30 in January 2006, but will have 41 by the end of this year – but it also allows us to be more innovative and exible in how we cater for our diverse customer segments, in different local markets. Local country management, delivering a localised version of a global product, really does deliver better value for our customers. Employing local people to build the business on a local level, and to

Inside the Padova facility

Reception area at Bologna store


Euro pg6-8 City.indd 2 24/10/07 18:29:23

negotiate with customers, is vital. This, combined with a highly international management team, comprising among others, English, Norwegian, Danish and Czech expertise, means that we don’t just talk about European experience – we have an in-built multinational culture. Of course, there are also complications and downsides to being relentlessly international. Navigating the maze of regulation and legal requirements across Europe can be hard. We need to understand and operate within seven different sets of local regulations, ranging from fundamental issues of tax and rules governing the opening of new storage sites, to more unexpected discrepancies to do with signage. For instance, the tax regime is highly regulated in Norway and Sweden, but far more relaxed in Poland. Meanwhile, in the Czech Republic, signage on our sites can clearly display our logo and contact details, whilst in Norway we are far more limited in what we

can display. And in Italy, there is a myriad of taxes to pay for every piece of commercial signage – according to how big, how tall – even the size of a ag. These differences mean that each market needs a tailor-made solution, executed by our local experts on the ground. And anyone who works in an international company will also know that working across many borders also creates a big logistical challenge, as well as additional cost. Flights, hotels, conference calls and meetings across seven countries present a unique set of dif culties, but are ultimately a small price compared to the value of having the second biggest European footprint in our industry. As we look towards the future, we are focusing more on building our business within the countries where we already operate rather than expanding even further across Europe – at least for now. Different business models may present themselves and our ethos of exibility and business innovation

means we will explore every possibility. We are fortunate that the strength of our brand and our established ‘way’ of doing business and serving our customers gives us a blueprint for going forward. But even though we believe that “fortune favours the brave”, we will not be reckless. Our philosophy has always been to focus on making sure we are serving our customers rst before trying to chase the next raft of business. Doing business around Europe is a deep learning experience, for us, and also for the customers we are educating about the value of the self storage concept. We have always believed in playing a long and patient game, and in Europe we rmly believe this is the best way to go. Europe has so many cultures and historical ways of doing things that change can often take time, but this is a business that still has so much more to offer, and there are so many more opportunities still to explore.

8Self Storage Europe 2007 Volume IV

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Self storage the Latvian wayTuomas Kurittu of Minivarasto Oy in Helsinki visited VIP Storage in Riga, Latvia to see how self storage is growing in the Baltic State

Many people involved in the European self storage industry have come across the service initially in the US – the cradle of our industry. This is also the case with Vilis Vitols, the rst self storage operator in the Baltic countries. Vilis´s family left Latvia after WW 2 and settled in Venezuela where the family built up a successful property business among their other business interests. Vilis was studying in Florida during the 90’s where he came across the idea of self storage and immediately realised it would be a good business idea in Latvia. Two years ago Vilis, his Venezuelan wife Carolina and their two children moved back to Riga, the capital of

VIP Storage, Riga

9

Tuomas Kurittu (right) with Vilis Vitols in the VIP Storage


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Store manager Arnis Nerets

10

Latvia where he wasted no time buying a suitable property and opening up the rst Latvian self storage site in May 2006 under the name VIP Storage (see: www.vipstorage.lv). That was a drastic move but the decision was helped by Carolina’s willingness to learn the language and supportive and sporting attitude. VIP Storage’s rst facility has 205 units with a net lettable of 1.000 sq m (plus 500 sq m of ce space for lease) with an excellent location next to the main artery leading into Riga. Units are renting very fast and Vilis has recently added a number of new units with roll-up doors in response to the strong demand. The partitioning was supplied by US Door, the administrative software is Store-IT, Netherlands and CCTV and access control systems were sourced locally. VIP Storage is busy working on opening up the second site on the other side of Riga in a recently acquired property which is still undergoing refurbishment to make it suitable for self storage use. The property is next to Rigas’s only of cial car inspection site and the site has an excellent drive-by visibility. Once ready,

the rst building can house up to 200 storage units with a lettable net area of 900 sq m (phase I, and 2,500 sq m net in phase II). The building is also

suitable for outside access units with roll-up doors with further development opportunities on the perimeter of the lot. Earlier this year Vilis was invited to visit Minivarasto Oy in Helsinki to see how the business operates in the Nordic countries. While there he was encouraged to start a Baltic countries self storage association to secure the votes of Baltic countries whenever self storage related issues spring up within the EU.

The Latvian economy is booming and VIP Self Storage has a bright future and is poised for further growth, especially since the business is run by someone like Vilis with previous business experience and a strong sense of patriotic duty displayed by the owner’s willingness to make a long term nancial commitment to build up a successful business in the Vitols family’s original home country Latvia.

Booming economy

Interior of VIP StorageSelf Storage Europe 2007 Volume IV

Euro pg9-10 Latvia.indd 2 23/10/07 13:52:37

Further to Rodney Walker’s editorial “Building a Low carbon World” published in this year’s second volume of FOCUS, Weber Shandwick has drafted this note providing the FEDESSA Secretariat and members with an overview of the ever-growing EU policy debates about climate change and the multiplication of subsequent European initiatives aimed at ghting this phenomenon.

Climate change: an unquestioned challenge, a growing concern

In most countries, climate change and the growing impact of human activities on global warming are no longer questioned. There is a growing concern, shared by the vast majority of decision-makers and public opinion, about the impact of global warming on everyday life and, to a lesser extent, there is a shared willingness to act to mitigate its effects. The mounting worry of European public opinion was con rmed by a Eurobarometer – an EU-wide survey – published last March. It shows that 87% of Europeans are concerned about the effects of climate change, in comparison to 47% back in October 2005. Echoing these results, Environment Commissioner Stavros Dimas has recently stated: “Climate change is one of the biggest challenges that will face humanity in the next 100 years... People all over Europe will increasingly feel the threatening effects of climate change on their health, jobs and housing, and the most vulnerable members of society will be the hardest hit. We need to ght the battle against climate change.” Against this background, all business sectors will be required to contribute to this ght.

The European Commission twofold strategy: limiting and adapting

Europe is convinced that, as a major economic power, it has a duty to be at the forefront of the ght against climate change. The block therefore advocates, in international fora such as the UN or the G8, the quick adoption of global solutions to address this challenge. At EU level, the European Commission, under the leadership of Environment Commissioner Dimas and Energy Commissioner Piebalgs, has developed a twofold strategy to tackle climate change. Climate change indeed poses a double challenge: 1 Europe must keep temperature increases limited to avoid catastrophic climate change. This means that the EU Member States will have to stabilise global emissions within the next decade or so, and then cut them to around half of 1990 levels by the middle of this century. 2 However, it is simply not possible to reverse climate conditions quickly. Even if the world stopped emitting greenhouse gases tomorrow the climate would still continue to change for many decades to come. Even if catastrophies are prevented, climate change is a force that will change societies, economies and politics as surely as other forces such as globalisation. There is therefore a need to make changes to prepare for it. This is what “adaptation” is about.

Limiting climate change

The European Commission presented its so-called “Energy Package” in January 2007 proposing an integrated climate and energy strategy to tackle global warming and security of energy supply. It included a Communication

Climate change: Not just another EU buzzword

on Limiting Global Climate Change to 2°C compared to pre-industrial levels. EU Heads of State and Government endorsed, at their March 2007 European Council, the proposed strategy and adopted a priority Action Plan to achieve by 2020 the following EU targets:❐ Limiting global warming to 2°C;❐ Reducing CO2 emissions by 20%;❐ Improving energy ef ciency by 20%;❐ Having 20% of EU energy produced from renewable sources;❐ Having 10% of transport fuels coming from biofuels. The EU policy and regulatory machinery is clearly up and running, with the Commission having a clear mandate to deliver, over the next two years, on the agreed priority Action Plan. A rst series of follow-up initiatives are expected already this winter. The EC is indeed expected to adopt on 5 December three Directives aimed at limiting climate change:❐ A Framework Directive on renewable energy in electricity, transport (biofuels) and heating & cooling;❐ A Revision of the EU Emission Trading Scheme (ETS) Directive;❐ A Directive on the reduction of CO

2

emissions from passenger cars and light duty vehicles. In 2009, the integrated climate and energy strategy will be reviewed and another Action Plan will be proposed to progress towards the 2020 objectives.

Adapting to climate change

On 29 June 2007, the European Commission presented its long awaited Green Paper “Adapting to climate change in Europe – options for EU action” which provides, as the title indicates, options for re ection to respond to the changing climate.


Euro pg11-12 Weber.indd 1 23/10/07 13:44:48

The key message is that global warming has already started and that, in addition to the need for drastic reductions in greenhouse gas emissions, the EU has no choice other than to adapt to this global phenomenon and to try to lessen its adverse effect on people, the economy and the environment. The release of the Green Paper was accompanied by the launch of a web-based public consultation. The deadline for stakeholders’ input is 31 November 2007. November 2007 is also to witness the setting up of the European Advisory Group on Adaptation to Climate Change. Its rst report is planned for mid 2008. The Green Paper is expected to be followed by a Communication on adaptation (to be adopted at the end of 2008) which will take up the policy options coming out of the consultation process.

An integrated approach

As dwelt upon above, the European Commission has adopted an integrated approach to ght climate change. Virtually all pieces of legislation in the European Commission pipeline take into account the necessity to limit and adapt to climate change. For instance and of relevance to FEDESSA:❐ The upcoming Action Plan on Freight Transport Logistics, prepared by DG Energy and Transport (DG TREN), will aim at, inter alia, reducing bottlenecks and congestion to lessen the impact of freight transport on climate change.❐ A review of the Directive on the energy ef ciency of buildings is also expected to take place in the coming year.

European Parliament’s commitment

The European Commission is not the only EU institution involved in the ght against climate change. The European Parliament has multiplied calls for a strengthened policy in this domain and has recently set up a Temporary Committee on Climate Change. It is

chaired by MEP Guido Sacconi (PES, I), and MEP Karl-Heinz Florenz (EPP-ED, G) was appointed rapporteur for drafting the Committee’s conclusions. The mandate of this Temporary Committee is to explore ways of mitigating climate change, advancing the debate on the post-Kyoto (2012) commitment period and scrutinising speci c climate policy initiatives. The Committee will hold frequent workshops and public hearings with stakeholders to gauge best practice. The Committee will conclude its mandate by adopting a report scheduled for Spring/Summer 2008.

Forthcoming key milestones

The UN Bali Conference in December 2007 on the future of the Kyoto Protocol and the EU Summit on energy and climate change in spring 2008 are the forthcoming two key events where major policy orientations are expected to be adopted.

Conclusions

EU decision-makers, with the support of the public opinion, are calling for the union of all stakeholders in the ght against climate change. There is an increasing pressure on companies to take pro-active actions to reduce their carbon footprint. This can be perceived as a threat. However, companies already active in this eld see this situation as a window of opportunity to showcase innovative and responsible corporate climate policies and gain competitive advantages over their competitors.

Weber Shandwick is FEDESSA’s support communications company

12Self Storage Europe 2007 Volume IV

Euro pg11-12 Weber.indd 2 23/10/07 13:44:53

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