The traditional property investment cycle has dramatically changed since the last property boom a decade ago. The days of buying property, benefiting from rental increases and the associated yield compression and then selling off at a profit after five or six years
no longer sustainable. Experts in the field now maintain that the best way to make money on a property investment is with a sound business model behind the property, requiring active participation rather than the traditional passive investment mentality.
Low risk and everything-as-a-service is the way of the future
The growing move towards digital businesses, rather than traditional, physical offerings is also impacting what customers want from their property offerings.
A good example of this is how insurance has shifted, where customers can customize their insurance exactly as needed. This includes being able to ensure laptops and cellphones just for the day if you know you will be in a high-risk area. Even industrial businesses are moving towards the digital economy mindset. Some large building managers are buying their compressed air for air-conditioning by the liter from the manufacturers without carrying any of the capital overheads of owning the machines, or operational hassle of maintenance costs.
This is no different in the storage world. Companies offering hubs where businesses can have office space, storage space, and even personal space are taking off. What is more interesting is that they don’t lock people into long-term leases. Month-by-month leases mean people can upscale and downsize, as they need. It also means that by optimizing the space into smaller units, with additional services for which customers are willing to pay a premium, property owners can increase their rate per square meter as well as yields.