Interesting conversation with Raju Ruparelia, the CEO of StorHub Group, on the Institutional Real Estate, Inc. podcast, discussing the development of self-storage across Asia Pacific and why the sector may be reaching an interesting point in its institutionalisation. StorHub operates across six markets, with 180 properties and approximately 80,000 storage units.

Some of my notes from the interview are included below. These are for personal reference only and are not intended as a comprehensive transcript; any mistakes are my own.

• On why self-storage developed later in Asia vs. the US/Europe: self-storage in the US began to take off in the 1960s, supported by suburbanisation, population growth and a rising consumer culture. Europe followed around a decade later, but driven by slightly different factors, including smaller urban homes and less natural storage space within those homes. The Asian story is more recent because the preconditions took longer to come together, but are increasingly in place today: ageing populations, shrinking apartment sizes, a growing middle class driving consumption and acquisition of things, and e-commerce reaching meaningful scale. The idea of storing personal belongings outside the home is still relatively new in many Asian markets, but adoption is now starting to move quickly. There is also a significant gap between the strength of the underlying demand drivers and the maturity of the capital markets around the sector. The US has a well-developed self-storage REIT structure, with Europe also following along. In Asia, Australia and Japan are the only real markets with institutional-grade operators of meaningful scale.
• On the five key demand drivers for self-storage: density, disposable income, dislocation, divorce and death. Density is the single biggest structural driver. The region has more than 4bn people living in the region, with 17 cities with populations of more than 10mn. Vertical living has also been established in Asia for far longer than in many Western markets. People tend to live in smaller homes to begin with, and affordability of those homes, similar to elsewhere int he world, is becoming more challenging. Another nuance in the region is that you have more multi-generational households living under one roof, so the demand for storage is more of a necessity than a discretionary service as households grow, disposable incomes rise and people accumulate more possessions. For many customers, self-storage is treated more as an extension of the home.
• On the other drivers of demand: Asia’s middle class is expected to grow by ~19% by the end of the decade. As people become wealthier, they tend to accumulate more possessions. Later in life, spending may shift increasingly towards experiences, but much of the region is still going through that earlier accumulation phase. Dislocation is another important driver. This includes in-country migration (movement of people from rural areas to tier 1 cities), but also cross-border labour mobility across the region, as well as students moving between the region for education. These periods of relocation in turn create demand for flexible storage. Finally, on ageing, Asia is ageing faster than many other regions. In 2025, ~11-12% of the population was aged 65 or above and that will grow to 13-14% by the end of the decade (compared with sub-9% a decade ago). As people age, not only do they accumulate things and not want to let them go, but you also see that pattern of downsizing, moving from larger to smaller homes and, eventually, potentially into assisted-living arrangements (with the need for external storage is likely to grow alongside it).
• On customer mix: self-storage is not only an individual consumer product. The development of ecommerce and changing retail models are creating additional need and use cases for lower-cost, flexible space that can be used for inventory management, micro-warehousing and last-mile logistics. Across their business, the customer mix is ~70% individuals and ~30% businesses, and they expect that ratio to remain relatively stable. The two segments are quite complementary. Households tend to treat storage as a semi-permanent extension of the home, which leads to longer tenancies and higher retention. On the business side, retailers represent a fifth  of demand, followed by start-ups, SMEs, logistics companies etc. Demand for self-storage in the context of micro-warehousing and fulfilment space for smaller retailers should continue to grow.
• On the outlook for growth and what makes an attractive self-storage market: operators are expecting around 8-10% growth this year, with particularly strong confidence in markets such as Japan and Malaysia. Over the medium term, as new supply starts to moderate, 5-10% growth is a reasonable way to think about the sector. Importantly, that would represent a more measured and sustainable growth profile rather than a series of large spikes — arguably a more attractive characteristic for institutional investors looking for durable long-term returns. But the real estate aspect is just getting your foot in the door. What is becoming more important is your ability to drive operations, whether through dynamic pricing, efficient customer acquisition, ability to manage facilities etc. and this is what separates over time the leading operators. Ultimately, this a retail business underpinned by real estate. The market also remains highly fragmented, leaving significant room for consolidation. There are also significant opportunities for growth even in the most developed markets, such as Australia and Japan. Australia is the most mature self-storage market in the region, but penetration remains roughly half that of the US. Meanwhile, Japan is the perfect example of storage as an extension of the home, with the majority of their facilities are in the Greater Tokyo region. People tend to live in much smaller homes, while awareness and adoption of self-storage are still continuing to grow.
• On the importance of local execution: even as institutional capital enters the sector, self-storage will likely remain a mix of smaller local operators and large institutional platforms. It is still fundamentally a local business, so understanding consumer behaviour, market preferences and the local regulatory environment are critical, regardless of the scale of the operator. For an institution looking to build scale, howeer, the challenge is to combine strong local capabilities with some degree of centralised or regional execution.
• On the advantages of scale: it gives them access to a much broader dataset than a single-location or single-market operator without scale, which they can leverage for pricing, occupancy and customer behaviour, providing additional insight into how individual markets and facilities are performing. This has sharpened their ability to forecast demand, drive decision making and underwrite future growth, if they are looking at roll-ups or follow-on acquisitions.
• On technology: the industry has historically been much more manual, with things like pricing driven by local market norms rather than data. Digital access and online booking are now becoming table stakes, but the real differentiation will come from fully integrated systems, the ability to use pricing engines, and operators being more analytical and data-driven to scale effectively. On the impact of AI, you will see this in terms of leveraging algorithmic pricing, moving from traditional fully manned operations to hybrid models etc. It should drive more accurate and  faster reporting, allowing operators to spend more time interpreting and acting on real-time data. This will remain a people industry, but with consumers across all walks of life migrating to purchasing and making decisions online, as well as using data and technology, the industry will continue to move that way in meeting consumers where they want to interact.
• On sustainability: another consequence of institutional capital entering the sector is that expectations around sustainability will continue to increase. How facilities are designed, including the use of energy-efficient infrastructure, will have implications both for operating costs and for the long-term quality of the underlying assets. What may historically have been viewed as a “nice to have” is likely to become increasingly necessary as institutional ownership grows.
• On regulation and barriers to entry: there hasn’t been any significant regulatory pushback against the sector. If anything, as the industry has matured and developed, you are getting more clarity around the regulatory regime. If you take a market like Korea, for example, historically there were no specific zoning rules or bylaws for self-storage, so facilities fell within general industrial classifications. As the sector has developed, there is greater transparency in terms of how and where they can operate. At the end of the day, they still offer a community service, and most constituents value storage within close proximity to where they live. In Japan, for example, the majority of their customers live within a ~1-2km radius of their storage facility. They have a much better understanding now of how municipalities and government bodies are viewing the sector, which gives operators more clarity on how and where they need to build, and that what they are providing fits within the ecosystem of what each market is hoping to create.