What's in store for Lock+Store
The self-storage solutions provider is ramping up its expansion plans in Singapore and moving into the region.
Making her move: Ms Ng intends to bring the Lock+Store brand to places such as Hong Kong, Japan, Taiwan and South Korea, in addition to adding four more facilities in Singapore and six in Malaysia. - PHOTO: ARTHUR LEE
THE self-storage industry, fresh from a round of consolidation last year, is likely to face another round in the coming years. But that is not stopping Lock+Store from ramping up its expansion plans.
There are currently four Lock+Store facilities in Singapore; the self-storage solutions provider says this will double to eight in the near term, even as it rolls out its first overseas facility in Temasya Industrial Park, Glenmarie, in Selangor.
Expected to be fully operational by September, the mixed-use office and warehouse complex in Malaysia will comprise about 200 self-storage units of varying sizes, ranging from nine square feet to 200 square feet. Charges are about RM6 (S$2.30) per square foot (psf) and customers will be able to choose between non-air-conditioned, air-conditioned, and wine storage units.
"We aim to target the surrounding businesses as well, especially small and medium enterprises (SMEs) which tend to store their inventory at self-storage facilities to manage their operating costs," says Helen Ng, chief executive officer of Lock+Store.
"SMEs form the largest proportion of our corporate users in Singapore. We believe they will be the major growth drivers of our business in both Singapore and Malaysia," she adds.
According to a survey conducted in the last quarter of 2013, of the 300 Lock+Store corporate users profiled, 57 per cent are SMEs. Start-ups constitute 16 per cent of corporate users and blogshop/online-retail users comprise 12 per cent. The remaining 15 per cent are multinational companies.
Part of Lock+Store's allure for SMEs lies in the synergies it enjoys with SingPost Group following the latter's buying over of its entire business in 2012.
Most suitable candidate
In July last year, for instance, the firm launched the "store, pack and deliver" service at its four facilities in Singapore. Using the scheme, storers - particularly SMEs and start-ups - are able to take advantage of the direct on-site sale of stamps, SmartPac and SpeedPost services.
"We're able to provide local logistics in the form of SpeedPost and SmartPac on site. This benefits our e-commerce customers and SMEs as they don't have to deal with a third party now," explains Ms Ng. "We sell the packaging boxes and we drop that off at the post office for them . . . And if any of our customers require e-commerce support, we are able to provide that."
Ms Ng's involvement in the self-storage space stems from her travails in 2005 when she had to close her bar and restaurant after the landlord wanted the space back.
"At that point we were scrambling for alternative spaces but we couldn't find one that was suitable for our needs. And because we still had plans to start up a F&B business again, we had to look for storage. Everywhere we looked asked for a one- to two-year contract," she says.
While this sparked Ms Ng's interest in the sector, she was aware that the local market was not ready. And so she bided her time.
In 2010, the opportunity to enter the market came up when Temasek Holdings' property arm Mapletree Investments sold Lock+Store to a consortium led by private equity fund firm Southern Capital Group.
Ms Ng was originally engaged by the buyers to conduct due diligence on the property. But they soon found her to be the most suitable candidate to run Lock+Store.
Today, Lock+Store boasts almost 5,000 storage units which translate to 235,000 sq ft of lettable storage space. According to Cushman and Wakefield, it is one of an estimated 13 companies operating about 35-40 facilities islandwide.
"In terms of who is running the show, I think apart from the mom-and-pops, there are basically three big brands left now. There was a bit of consolidation going on in the last year," says Ms Ng.
"It was fairly unique in that Singapore's market developed so differently from the Australia and US markets. When we started out, most of the big brands were owned by equity funds . . . (and so) there was always that need to grow quickly and churn."
The next round of consolidation will likely be among the smaller players, says Ms Ng.
"They think (that as long as) they build, customers will come. They will realise very quickly customers don't come just like that. There's a lot more operational management involved," says Ms Ng.
Online payment options
She should know, having revamped Lock+Stock's business when she took over in 2010. These moves included the launching of marketing efforts to spread awareness about self-storage, bringing in a trainer to help staff grasp the finer points of selling space, and introducing processes to make the business more efficient.
To that end, she introduced online payment options as well as payment at 7-Eleven outlets to reduce delinquency in payments and established an online presence on social networking websites Facebook, Twitter and WordPress.
Looking ahead, Lock+Store plans to open four more facilities in Kuala Lumpur and two facilities in Penang.
"Compared to the United States and Australia where the self-storage penetration rates are about eight sq ft per person and 1.2 sq ft per person, Singapore's penetration rate is 0.3 sq ft per person (based on June 2013's statistics of 5.4 million residents). Malaysia's is even lower," says Ms Ng.
"We have engaged a country manager and will engage more customer service/sales staff. Key members of our Lock+Store Singapore sales and customer service team will also travel to Malaysia to assist with the initial set-up and operations," she adds.
Today the deputy chair of the first-ever Asia Self-Storage Association, Ms Ng says she is looking into a regional survey to give comparative data across the key Asian countries.
She intends to bring the Lock+Store brand to other places in the region in the future, including Hong Kong, Japan, Taiwan and South Korea.