_Self-Storage Proves to Be a Maturing Asset Class Poised for Continued Growth in 2026
Self-Storage Proves to Be a Maturing Asset Class Poised for Continued Growth in 2026
By Knight Frank Partner, Valuation & Advisory Tom Walker
Self-storage is continuing to move from a quiet, utilitarian corner of the market into a mature and increasingly sophisticated asset class, shaped by rising land values, denser living, and changing lifestyle needs. As we progress into 2026, the sector’s growth will depend on smarter design, automation, and operators’ ability to scale.
Once viewed as a functional niche, self-storage is now firmly repositioning as a higher-density, technology-enabled and increasingly institutional investment proposition. As Australian cities become more densely populated, demand is being underpinned by structural shifts in how people live and work. The transition into smaller dwellings is sustaining household demand in the self storage sector, while businesses are increasingly turning to flexible storage solutions that can adapt alongside them. With these forces entrenched, the sector’s long-term fundamentals remain well supported.
Structural Demand and a Consolidating Market
Self-storage has recorded steady growth for more than a decade, driven by demographic change rather than economic cycles alone. Today, the sector is increasingly dominated by a small group of scaled operators, led by ASX-listed National Storage and Abacus Storage King, alongside established private groups such as Kennards and newer international entrants including Asia-based StoreHub.
Market consolidation has become a defining theme. Larger operators continue to acquire smaller facilities to expand their footprint. This growing concentration is helping to professionalise the sector, standardise pricing strategies and lift operational performance across portfolios.
While eastern seaboard markets are now relatively mature, South Australia remains underpenetrated by national operators. Adelaide, in particular, lags its east coast counterparts in facility density, with National Storage operating only around 11 sites across the metropolitan area. This gap points to clear expansion potential as population growth, urban infill and changing living patterns continue to support demand.
Importantly, demand is no longer limited to households in transition. A growing share is now generated by small businesses seeking short-term, flexible storage without the cost or commitment of traditional industrial or office leases. This broader customer base has added depth to demand and reduced reliance on any single user segment.
Densification, Design and Technology Reshaping Supply
Shifts in planning policy are now playing a central role in reshaping supply, particularly in Adelaide where rezoning initiatives (including the Urban Corridor Zone) now permit predominantly residential developments of five to seven storeys, compared with the one to two storeys typically allowed previously. These changes are accelerating the feasibility of multi-level self-storage developments in well-located urban catchments, allowing operators to extract greater value from increasingly scarce land.
This evolution in planning settings is coinciding with a broader transformation in facility design. The traditional single-storey format is increasingly giving way to vertical, automated and often unmanned facilities. App-based access, automated roller doors and advanced security systems are becoming standard, improving customer convenience while reducing labour and operating costs.
Environmental considerations are also gaining traction. Developers and operators are incorporating recycled materials, solar integration and energy-efficient building design, reflecting growing ESG expectations from both investors and customers.
Knight Frank has advised on projects that illustrate this shift, including the redevelopment of legacy large-land self-storage sites in Adelaide. Older ‘sawtooth’ design sheds were partially replaced with a new three-storey, fully automated and unmanned facility, improving land-use efficiency, reducing statutory outgoings per square metre and future-proofing the asset through technology-enabled operations.
Investment Fundamentals and the 2026 Outlook
From an investment perspective, self-storage continues to demonstrate resilient fundamentals. While construction costs remain elevated, rental growth is expected to be the primary driver of returns over the medium term. National operators report average occupancy levels of around 80 per cent, while some local groups are achieving occupancy closer to 95 per cent, underscoring the importance of location, scale and operational execution.
Capitalisation rates for institutional-grade self-storage assets broadly align with industrial property, typically sitting in and around six per cent. As facilities modernise and pricing power improves, further rental uplift is anticipated, supporting income growth even in a higher interest rate environment.
Emerging operating models are also adding depth to the sector. Mobile storage solutions such as GoBox and TaxiBox, where containers are delivered directly to homes or businesses before being stored off-site, continue to gain traction. Despite this innovation, proximity remains critical, with most customers unwilling to travel more than 10 kilometres to access their storage unit. This reinforces the strategic importance of well-located urban catchments.
For investors, self-storage is no longer simply a defensive allocation. It is an increasingly institutional, technology-driven sector, well positioned to deliver durable income and long-term growth as Australia’s urban landscape continues to evolve.
Read the full Australian Horizon Report