FEDESSA Convention and the European Approach

I recently had the opportunity to attend and present a session at the FEDESSA convention in Stockholm. I have included a select collection of observations below. It was my first FEDESSA convention in five years. It was a great opportunity to discuss with a broad group of international operators various self storage topics. Fellow SSAA members Mike Tate and Malcolm Collins also gave presentations at the FEDESSA Convention. They both presented excellent, well received sessions, reconfirming the significant and knowledgeable contribution the Australasia Association continues to make to the international self storage industry.

Insurance
In Australia and New Zealand the topic of insurance is one we are constantly assessing. Although our agreement makes it clear that the Storer should take out insurance, we do not as an industry require a Storer to demonstrate they are insured before they can store with us.

This is not the case in other markets. In the UK, a number of the major operators require proof that a Storer holds insurance before they can apply for storage. In France, the Storer must either take out a policy through the Facility or produce evidence that they already hold insurance. If the Storer fails to produce evidence that they are insured within 14 days of move in, insurance is automatically applied to the Storer’s account.

Some operators in other European countries include limitations on the value of goods that can be stored without insurance. For example, a storage agreement might include a clause prohibiting the storage of goods worth more than 2000 Euro unless the Storer is insured. In this way, even where the facility is found liable for the loss or damage to Storer’s goods the maximum amount the Facility will be accountable for is limited to the amount fixed in the contract.

In view of recent major loses to fire in both Australia and New Zealand, these different approaches to insurance are worth discussing again in our own industry.

What makes a good site?
I had the opportunity to visit sites in both Stockholm and France. Shurgard ???? is a facility which most SSAA members would agree ticks all the right location boxes. Between two major roads, backing onto a rail line, next to a McDonald’s and a service station, and within 5 minutes of a number of densely populated residential areas, this 1000 unit Facility was sitting close to maximum capacity. Opened in 1999, this purpose-built Facility has undergone three stages of development. Similar to many Australia and New Zealand city facilities, the customer ratio at this site is 20/80 business to private customers.

Toulouse

Annexx’s Toulouse Université facility in France is another example of what we might recognise as a near perfect self storage site. Located just off the peripherique – the major arterial road which wraps around the edge of the city centre in Toulouse and carries over 300,000 cars each day – the highly visible facility is in clear view. Annexx have taken advantage of the highly visible location and included on the outside of the building large ‘educational’ photographs of people using self storage. The images include people carrying rugs and lounges, as well as boxes and computers, hence targeting both business and private users.

Toulouse 2

Vincent, GM of Annexx explained the concept as ‘necessary’ as self storage is a very new concept in France, and many people don’t understand the product. He says by having the photos incorporated into the building’s external façade, both the product and service that is self storage generally is being promoted, along with the brand itself.

Toulouse 1

In European cities, density of living is extreme. In Stockholm we undertook a tour of a facility that was in an underground car park. Storer’s either walked or drove down a steep driveway to access their spaces, or could take a small internal elevator from the Facility office. The car park was deep under a modest inner city residential building. The only evidence that there was a storage Facility was the small office and discrete signage. Interestingly, although the Facility owns the car park/underground storage facility area, they only rents the office space and two footpath parking spaces. This facility really demonstrates how operators in dense cities are having to think more creatively when undertaking a self storage development.

Shurgard1

Shurgard2

Shurgard3

Pelican Storage, Stockholm was another example of an inner city facility. This facility was a conversion of an old theatre and the office retained the original chrome cinema doors adding a touch of glamour to the development. Of particular interest at this site was the lux wine storage section. Because of the location of the Facility – affluent inner city neighbourhood – there is high demand for this service. Management advised that although wine storage is slower to fill, the storers rarely leave. Out of the 120 wine storage spaces, only 10 storers have left in the 3 years they have been operating. This is in contrast with an average 7 month stay at the same facility for standard storage. Of significant note was that this facility did not employ any advertising for the site, relying instead on passing traffic and word of mouth, demonstrating once again the competitive advantage of having an excellent location.

Pelican1

Pelican2

What happens when a Storer does not pay?
Our members have occasionally admitted envying the apparent ease with which our American colleagues can dispose of goods.  Shows like Storage Wars make our detailed inventory and sales process look onerous. However, in a number of European countries, the sales process is much harder than that in Australia or New Zealand.

In relative infancy, the self storage industry in a number of European markets is struggling to develop consistent and secure methods for disposing of defaulting storer’s goods. Some are required to make the equivalent of a local or magistrates court application before they can not only sell but also deny access. Swedish laws are particularly onerous in this regard.

One French operator has built into their agreement a transfer of ownership of the goods to the Facility upon default. After 8 weeks, ownership of everything in the Space transfers to the Facility. The Facility then hands everything to a third-party who removes all the items from the Space and cleans it in preparation for re-letting. The Facility does not earn any money from this transaction. They feel it less likely that a Storer will be able to challenge the Facility if they get no commercial benefit from the disposal of the goods i.e. there can be no argument about the value of the goods if the Facility has not made any money from the transaction. They have not at this time had their method tested or challenged by a court, but it demonstrates that there is certainly more than one way to deal with overdue storers.

Conclusion
It is always worthwhile taking the opportunity to discuss our industry with operators from different locations, whether it be in the next state or the next continent.

Simone Webb use
Simone W B Hill
SSAA CEO & Legal Counsel

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