Trunkroom Channel English

Quraz hungry for growth (article: Property Management Nov'12)

Quraz Leading the Japanese Self Storage Industry and hungry for more growth
Positioned to own and operate properties in the rapidly growing Japanese self-storage industry

In Japan the terms “Trunkroom” and “Rental Storage” are used to describe consumer self-storage industry. Quraz is the market leader as measured by revenue and number of units and has achieved annual revenue growth of 20% in the past five years. The company was founded in 2001 and generally pursues a conversion model whereby it purchases underutilized properties (such as old buildings, office buildings misplaced in residential areas) at the right price, converts them to self-storage and operates them under direct management (a few of the portfolio properties are leased). Currently Quraz operates 45 shops in major cities in Japan, 6 of which opened in 2012.

While many companies’ in Japan operate under a “sublease” or “management service” model, Quraz differentiates its business model by owning its facilities, which gives it more flexibility in designing and offering a high quality product and service. For example, all Quraz facilities have a sign-up room with on-site staff to enable same day sign-up and move-in. They also have 24-hour temperature/humidity control and security. As a result, Quraz maintains long term stable occupancy despite relatively high rental rates against competitors. Compared to average office properties, self-storage facilities have less rentable space as they require more space for hallways, however, they have more flexibility in floor design (more and various types of units) and pricing, which enables higher yield than office use.

Hungry for growth; focusing on property sourcing and product awareness

To achieve further growth, Quraz is focusing on initiatives to increase sourcing capabilities and raising awareness of self-storage product.

Sourcing criteria include:

  • Currently used as office, shop or warehouse etc.
  • Total floor area of 300-750 tsubo (1000-2500sqm) either for purchase or lease (with no existing tenants)
  • Built after 1981 (or conforming to seismic regulations)
  • Construction Certificate and Application certificates available
  • Parking space available
  • 24-hour access to the building available (for lease properties)
Total acquisition and conversion cost is approximately 1 billion yen per property.

Tokyo is the main target market, however non-Tokyo markets including Yokohama, Kobe and Fukuoka (where Quraz currently has less reach) are also candidates. Proximity to a station is not regarded as important factor in any market.

In an effort to increase awareness of the self-storage product and business, Quraz is active in disclosing industry information via its website. Despite rapid growth of the industry, unavailability of market information has made it hard for those outside of the industry to research details and understand potential for growth. Industry information also has an important implication for financing from financial institutions. Therefore, Quraz is making a strong effort to conduct industry research and analysis and publishing data and reports.

Quraz aims to open more than 20 shops in the next 3 years while exploring various ways of raising funds and expanding business opportunities. Stephen Spohn, President and Representative Director of Quraz, says “the real-estate finance market will soon recognize the stability and potential of the Japanese self-storage industry, eventually making it a new asset class”

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