The storage industry in Canada in the first half of 2021 has been a good one for the majority of storage owners.  Occupancies are up in most major markets as are rents.  Demand for storage space has remained strong with moves ins still outpacing move outs in most facilities.  This increase in occupancies is more than likely due to an increased demand for storage from business as they have to deal with inventory issues surrounding business closures and supply chain disruptions As well as a booming real estate market in most major cities across Canada.

Western Canada

The storage market in Western Canada has, like the rest of Canada remained strong in 2021.  Leasing activity in new facilities has been strong.  Existing facilities have also seen an increase in occupancy.  Since May 2020 we have also seen rental increases begin again with some operators of very highly occupied facilities implementing double digit increases to not only listed rates but also existing customer rates. 

Alberta and British Columbia have seen large transactions in the first part of 2021 with the Storesmart portfolio in Alberta being sold to Bluebird Self Storage in March and the Mayfair Portfolio in Vancouver being purchased by Mini Mall Storage in April.  Both of these transactions were off market deals and also were at record low Cap rates for the markets they are in.  These sales indicate that in major urban markets Cap rates are still compressing.

Eastern Canada

Ontario and Quebec have had some of the most extreme lockdowns seen in Canada and despite this, the Self-storage industry has continued to see not only increases in occupancy but also increases in rental rates.  As with the rest of Canada, as the economies of these provinces continue to reopen, it is expected that self-storage transactions will also increase.  The shutdowns and slowdowns due to the Covid 19 Pandemic have also impacted many of the new storage facilities currently under development.  This has caused much of the new supply coming to major markets in Ontario to be delayed.  The impact of this will be higher occupancies and possibly rates in the short term until these facilities are able to be completed and come to market.

Ontario has seen some major transaction in the past 6 months including portfolio and single storage purchases by Storage Vault Canada as well as other single store purchases by SmartStop and other existing storage operators.  Additionally, the My Storage portfolio is currently for sale in an off-Market process and should close by years end.

Maritime Canada

The storage market in the Maritime provinces has moved in the same way as the other provinces however the implementation of the Maritime bubble during Covid 19 has slightly muted the increases seen in the rest of the country.  Having said this, population and economic growth have rebounded well across the urban areas in the Maritimes and storage demand is robust with some cities such as Saint John and Halifax having shortages of available storage units in some sizes. 

Bluebird Self-storage purchases 2 storage facilities in Nova Scotia in February 2021 as a strong cap rate.  Additionally, Metro Self Storage is constructing new Class A storage facilities in Halifax and St. Johns and Storage Inn will shortly complete a new Class A storage Facility in Downtown Halifax.

Moving Forward

Given the imminent reopening of economies across the country in the coming months and the typical summer rental season, it would be expected that occupancies will continue to rise and in facilities that are already highly occupied, this will put further pressure on rental rates.  Interest in the Self-Storage Asset Class is robust and growing as its performance through the Covid 19 Pandemic has been better than most other asset classes.   This interest coupled with the difficulty and expense of building new storage facilities at present will continue to escalate the value of existing facilities in the short to mid-term.