Self-storage has seen phenomenal growth, leading to an influx of new players and supply – but experts insist demand can keep pace. Here’s how investors can cash in.

Our booming population, denser cities, unaffordable housing that squeezes families into smaller homes, and ongoing love of renovations create endless demand for stashing our stuff.

The pandemic fuelled households’ demand for storage facilities. Picture: realcommercial.com.au

Australia’s self-storage market, valued at nearly $3.14 billion in 2025, is projected to grow at a robust 4.3% annually to $4.78 billion by 2035, according to an Expert Market Research report.

Linda Sharkey, managing director of specialist self-storage advisory Four Leaves, said that demand is surging from every angle.

“It’s not just people moving, decluttering and renovating; demand also comes from deaths, divorces, merging or separating families, as well as small- and medium-sized businesses in transition,” Ms Sharkey said.

The pandemic turbocharged the sector as deaths, divorces and lockdown reshuffles collided with a housing boom and spare cash.

“Some states saw self-storage grow by 20% in one year, which was phenomenal,” Ms Sharkey said. “Operators were raising their rates so that customers would leave, because the next customer was prepared to go in much higher.”

Four Leaves managing director Linda Sharkey. Picture: Supplied

At the same time, businesses piled up inventory buffers against delays, shortages and soaring freight costs, according to REA Group senior economist Anne Flaherty.

“The pandemic highlighted how essential self-storage can be,” she said. “But as businesses face more uncertainty, storage space is definitely expected to grow.”

A ‘boon’ investment?

This double-digit revenue growth during the pandemic has fuelled new storage facilities, pushed up prices, and lured large players to the space making large-scale transactions.

December’s blockbuster $4 billion Brookfield-GIC buyout of National Storage REIT (real estate investment trust) set records as Australia’s biggest REIT privatisation, while Chapter + Co’s sale of six assets totalling 48,000sqm along the eastern seaboard for an expected $220m is drawing local and offshore interest.

Chapter + Co is divesting from its $220m self-storage portfolio, including this facility in Rutherford NSW. Picture: Supplied

Chapter + Co’s portfolio represents the largest privately-held self-storage portfolio, and expressions of interest on its blockbuster divestment close on Thursday, 7 May – its managing agent is CBRE’s Paul Ryan.

“Despite current market volatility, we are seeing self-storage assets continue to be in high demand with investors attracted to inflation protected income, high cash yield and an attractive growth outlook,” Mr Ryan said.

But it’s not just demand from consumers and business that make this sector attractive. Its real edge is its resilience, simplicity and pricing agility, according to Ms Flaherty.

REA Group senior economist Anne Flaherty.

“The fact that you can adjust pricing depending on market conditions is a big boon, because often with other kinds of commercial assets, you’re locked into a lease term for several years,” she said.

“This also makes it less risky, because if demand goes down, you just adjust the pricing point down.

“It’s also relatively hands-off, in contrast to owning and managing a shopping centre, for example, which has a lot more complexity to it.”

Precinct in Oakleigh has 49 self-storage sites and is for sale on realcommercial.com.au.

Tenants are also pretty sticky, Ms Sharkey said.

“Generally, you can bank on a customer staying for 12 months. It’s a bit like a gym membership – people just keep paying it. And businesses tend to stay for longer and absorb free rate rises more easily.”

A favourable outlook – sustainable growth?

Ms Sharkey says no industry can sustain double-digit growth forever, but yields remain stronger than traditional assets, with Sydney around 5%, Melbourne 5.5%-5.75% and regional areas up to 7%.

Self Storage Association of Australia’s 2025 data shows there are 3,380 self-storage facilities across Australia and New Zealand (that are around 85% occupied), with 350 major developments underway – yet only 9.2% of the adult population use them.

Morayfield, in the northern suburbs of Brisbane, plays host to this storage facility for sale on realcommercial.com.au.

Ms Sharkey says Australia remains undersupplied.

“We have roughly two-thirds the amount of supply that they have per capita in the United States — our market can absorb a lot more supply,” she said.

CBRE National Director of Alternative Assets, Dylan Adams, says supply remains constrained by planning settings, site availability and development feasibility, particularly in inner-urban markets.

“While some pockets may see elevated levels of new delivery, there is no evidence of systemic oversupply, with strong demand fundamentals continuing to absorb new supply across most major metro markets,” he said.

“We expect deal activity to continue to build, driven by portfolio recycling, ongoing sector consolidation, and new entrants seeking scale in what is becoming an increasingly institutionalised asset class.”

CBRE’s Dylan Adams. Picture: Supplied

But Vanessa Rader, Head of Research at Ray White, warned cost-of-living pressures and young people’s buy-less-resell-more mindset may deter some.

“Younger people aren’t collecting quality furniture worth storing. Second-hand market platforms like Facebook Marketplace let them buy and resell cheaply and avoid high storage costs.”

But businesses remain a prime market, she said.

“For many businesses, self storage is more flexible and cheaper than leasing their own facilities.”

Ray White head of research Vanessa Rader. Picture: Supplied

How to invest in self-storage

Self-storage attracts REITs, private equity and seasoned capital – and isn’t an easy investment class for newcomers to enter.

Institutional giants like Storage King, National Storage and Kennards own and operate their own assets; plenty of deals are done off-market, which experts say prevents customer flight and hides performance from rivals.

Top performing assets are tightly held, and warehouse space remains scarce nationwide, but entry paths exist, Ms Sharkey said.

This mega storage facility in North Rocks, in Sydney’s hills district, is for sale on realcommercial.com.au.

“Underperforming assets can miss demand-based pricing, like charging premiums for scarce unit sizes. A well-rounded facility will optimise rates every day, just like an airline,” she said.

“There’s scope to turn a 5%- 6% return into an 8% return just by managing it correctly.”

You can buy a facility and outsource to pros like Storage King, CBRE or Wilson Storage to manage it; launch and run your own self-storage business; or buy shares in sector syndicates or trusts.

While running a self-storage facility may seem simple, expertise should not be underestimated, Ms Sharkey said.

A 340sqm site at this storage facility in Direk, on the fringes of Adelaide, is for sale on realcommercial.com.au.

Ms Flaherty said while large players have brand presence, there’s still space for small players.

“There’s growing demand for self-storage, so that creates an opportunity in areas where there’s a shortage,” she said.

Urban areas may offer stronger demand, but warehouse space is in shorter supply and pricier.

Ms Sharkey advises investors to analyse supply-demand fundamentals in the facility’s 15-minute radius.

“When two or three operators open a facility at the same time, you have this price war, though this oversupply is temporary,” she said.

“Once the facility reaches a stabilised level of occupancy, rate optimisation can come back in again.”

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The office sector has been through the wringer. The pandemic sent workers home just as a glut of gleaming new stock hit our CBDs, leaving city landlords scrambling.

Since then, the ‘flight to quality’ has been well-documented, and CBDs may no longer offer a balance of price and amenity for some businesses according to REA senior economist Anne Flaherty.

“We’re recovering from a pretty unusual period in history, where demand for office space decreased overnight while new supply to our capital cities surged,” she said.

Sydney Metro West’s Burwood North precinct will have thousands of new homes and jobs by 2032, building up the inner west city as a major transport hub. Picture: Supplied

While Ray White research found office absorption rates are at their strongest levels since 2018, supply in the CBDs still outstrips demand.

National net absorption hit 365,883 sqm in the 12 months to January 2026, but 411,561 sqm came online, pushing total vacancy to 15.9% from 15.1% just six months prior, which “will take years to absorb” according to Ray White’s research team.

To draw people back, businesses have been chasing top-shelf spaces with sleek fitouts, wellness centres, cafes and end-of-trip facilities – and finding far better value on the city fringe. Areas like Parramatta in Sydney and Cremorne in Melbourne are pulling tenants from the traditional city core.

So what’s next for our CBDs? Are they fading into ghost towns, or simply evolving as energy and investment shift to the edge?

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Pros of CBD-adjacent hubs

Ms Flaherty said when new office supply is absorbed over the next decade, fringe business districts should perform quite well.

“While CBDs are packed with A-grade towers, fringe suburbs can offer newer, high-quality spaces at lower rents. If a business can stay near the city but pay less, that’s really attractive,” she said.

She also said with Sydney and Melbourne spreading further out, it makes sense for jobs to follow people, provided the precincts are well-accessed by public transport.

REA Group senior economist Anne Flaherty.

Western Sydney’s Parramatta is a prime example, said Peter Vines, managing director of Ray White Commercial Western Sydney.

“For A-grade in the city, you might pay $1,500 per metre; in Parramatta, $650 — plus you can secure generous incentives,” she said.

The new light rail and metro links are only boosting Parramatta’s appeal, while fellow office precinct Chatswood is now just eight minutes from Sydney’s CBD.

But price and transport isn’t everything; good amenities are essential.

“People want to feel excited to go to work so you need great cafes, childcare, gyms, after-hours spots — and you don’t need to go into the city for that anymore, Mr Vines said.

Ray White Commercial’s Peter Vines. Picture: Supplied

Data from merchant terminal provider Square supports the shift: 40% of Australians now visit the CBD less than once a month, and almost one in five avoid it altogether.

In Sydney, Surry Hills on the CBD fringe is booming, with tech firms drawn to its relaxed, creative energy.

“The area feels alternative and relaxed, and the places have character; not everybody wants to be in a skyscraper in the city,” Mr Vines said.

In Melbourne, Cremorne’s dense cluster of startups has earned it the nickname ‘Silicon Yarra’.

“Being among similar industries is a real advantage,” Ms Flaherty said. “And easier parking than CBDs can make a big difference for staff.”

Knight Frank chief economist Ben Burston. Picture: Supplied

Pros of the traditional CBD

While moving out of the CBD can make life easier for some employees, it can make it harder for others, Ms Flaherty said.

“Some fringe hubs are close to where executives live – Cremorne, for example, is easy from Toorak or South Yarra. But for staff on the opposite side of the city, that can mean a long commute via the CBD.

“Traditional city centres tend to be convenient for the majority, so moving elsewhere can shrink your talent pool.”

And while the outskirts may offer cheaper rent, that’s not universal, she added.

“In Melbourne’s CBD, around 19% of office space sits vacant at the moment, so tenants can negotiate attractive lease terms. Sydney’s vacancy rate is also high, giving tenants the power.”

Knight Frank chief economist Ben Burston agrees the CBD is far from finished. He said strong demand for prime-grade space and a limited supply pipeline are helping city centres lead the national recovery.

Melbourne ­office yields have recorded the largest correction of any capital city. Picture: Jason Edwards

Knight Frank data found net rents have climbed 11% year-on-year in Brisbane and Adelaide, 7% in Sydney and 4% in Melbourne.

“Sydney’s CBD has been a bellwether for the health of the wider office market, and to date the recovery has been strongest in the core CBD precinct. Melbourne has witnessed a similar trend.”

Investment opportunities

CBRE has dubbed 2026 ‘the year of the office for investors’, thanks to limited new supply, rising rents and yields that appear to have bottomed – with some even starting to tighten.

In Parramatta, Ray White Commercial reports a vacancy rate of 22.1%, largely due to newly refurbished stock returning to the market, yet tenant demand remains solid. Mr Vines said prime yields in western Sydney held firm at 8% during 2025.

Meanwhile, PropTrack’s yields report for Q1 2026 shows office yields eased over the past year to 5.3% in Sydney and 5.6% in Melbourne, while rising in Adelaide (5.6%), Perth (5.8%) and Brisbane (7.1%).

Knight Frank’s 2026 investment hotspots include North Sydney, Cremorne, Brisbane CBD (Top Tier), and the Adelaide and Perth CBDs.

The City of Parramatta is the latest council to announce the trial of a special entertainment precinct. Picture: Parramatta Council

Mr Burston said growth was more subdued outside the major CBDs where high vacancy weighed on performance, though he expects the recovery to gradually spread.

“We expect continued growth in Adelaide and Brisbane, while we expect Sydney and Melbourne to enter a second phase as growth extends beyond the core precincts,” he said.

“Adjacent markets, such as Sydney’s CBD Midtown and North Sydney and the Western Core in Melbourne, should see improving growth as they join the core in starting to benefit from a thinning supply pipeline.”

For investors weighing CBDs versus fringe hubs, Ms Flaherty said it’s about priorities.

“If you want a blue chip asset, the CBD makes sense – yields are a bit lower, but you may attract larger businesses,” she said.

“If you’re looking for higher returns and a lower price point, fringe markets make sense.”

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