Be Careful where you Store!!!

You care for your property at home/in business.

What about where you store it?

The financial crisis in Ireland has reached the self-storage business. In recent days a very large storage facility in Dublin has gone into receivership.

A trawl through the accounts of other storage businesses can help you decide where to store as much as the cheapest price. One large firm has written off €29 million following expansion at the height of the Celtic Tiger. Another firms accounts show it has borrowings in excess of €10 million. Other storage firms accounts show serious losses. Some storage firms are highly exposed to their banks including Anglo Irish Bank. Most of our competitors show an excess of liabilities over assets. Be careful where you store your goods; the cheapest price could turn out to be the most expensive!

Why is this?

In recent years a number new firms entered the storage business. Property was purchased at the height of the property market. Some existing firms expanded, borrowed serious money and bought premises at ridiculous prices. They are now caught in the financial crisis with falling rents and unsustainable bank borrowings.

Unsustainable Pricing.

How have they reacted? The firm which has just gone into receivership was offering rents at as low as a €1 a month. Other firms are dropping their rents in a race to the bottom. It is only a matter of time till some of these firms follow the same path as the large firm in receivership here in Dublin.

A complex business.

The operation of a self-storage facility is a complex mix of many things. There is the substantial capital requirement for the purchase of premises. Then there is the fit out cost of the individual rooms and the provision of fire safety requirements. The cost of providing security is massive. In Elephant Self Storage our facility in Tallaght we have invested huge capital in electronic and physical security. We have seven levels of security including over 80 individual CCTV cameras with 24 hour live monitoring and remote security monitoring which will talk live to anyone attempting to enter our compound. Management systems are installed to control the hotel-like facility with numerous different size rooms for clients staying from a day to years with some moving between different size rooms as their businesses change from time to time. Then there is the investment in staff, training, marketing, offices, rates, insurance, maintenance, cleaning, special designed lifts, parking and loading areas and exclusive to Elephant storage, a Business Incubation Centre (www.ebic.ie) to allow business clients not only to store their goods but to run their entire business from the one location.

How can a self storage facility provide that level of professionalism demanded by discerning clients for silly rents? The answer is that it is not possible.

Cheap?

If you just decide to rent from the cheapest storage centre then perhaps you should ask a friend to loan you space in a garage or buy a garden shed. Perhaps you are not worried about damp or theft. Your friend will not mind giving you access when ever you want to visit your goods. Insurance is not important and cleanliness is unimportant. Then that is the way you can save money.

Silly.

On the other hand if you value your possessions you must decide if you want a cut price operator with a very real danger that they will go bust whilst storing your goods or alternatively you decide to store  in a facility like Elephant Self Storage that has been run by a family in business for over 50 years and is financially strong. Check us out. Our annual accounts are looked after by KPMG and Smith & Co, Chartered Accountants. Our bank is AIB, Crumlin Road, Dublin 12 and our solicitors are Eversheds O’Donnell Sweeney. Unlike most other self storage facilities our accounts show we are well capitalised, and well financed.

We monitor our competitors to make sure we are highly completive. Our prices offer excellent value but they are not silly. Your goods mean a lot to you and the last thing you want is to find yourself caught up in a receivership. If a price is too good to be true, then most likely” it is too good to be true". Be careful,

( And, we want to be in business for another 50 years! )

NOTE: The sources for the data in this blog are available on request.