The business of renting out small warehouses does not cost much and although the initial investment is large, it pays off faster than renting an apartment. This is one of the few markets in Serbia that is growing during the pandemic. Unlike the EU, this business is still “in diapers” in our country, but the entrepreneurs who deal with it predict that it will become a “hit” in three to five years.
A new virus and a new way of building, these are roughly two big reasons for “giving birth” to a new type of business in Serbia – renting a “mini warehouse”. The virus brought work from home, so more and more companies are canceling business premises, and for the excess of things, they are looking for a place where they will put them away and save them for “better” times.
There are fewer and fewer apartments in the new building that have pantries and basements, so people are looking for small, and relatively cheap spaces where they would leave a surplus of things they do not want to part with. The number of companies that rent mini-warehouses is still not double-digit, also, for some it is not a basic job but more an “investment in the future”, but in one all those who deal with this business agree: mini-warehouses are a very profitable business in Europe and it will certainly be the same in our country in the future.
“Our experience shows that this job is profitable, because the business costs are not high, and it does not require a large number of workers. A larger initial investment is needed, but according to our calculations, it will pay off in about five or six years. The investment in this business returns faster than the investment in renting an apartment,” explains Zoran Stajic, the owner of the family company “Toro Box”, the largest company in Serbia that deals with this type of renting.
This company was first engaged in renting a large warehouse space, but two years ago, with the help of a Canadian partner, they entered the business of renting a mini-warehouse. According to their estimate, between one million and two million euros are needed for the initial investment, depending on whether the company already owns its own land, while quality containers-warehouses cost around 4,000 euros. Today, they rent over 200 small warehouses, buy more land and prepare 800 new facilities. The rental price is from 50 euros and up.
“The corona virus has not affected our business much, I think this type of business is resistant to crises and economic turmoil. The work has a slightly seasonal character, for example, in August and September there are current relocations, while February is a quiet month. For now, our most common clients are people who move or renovate their apartments, so they leave furniture with us,” says Zoran Stajic.
In addition to furniture, some of their clients were funeral companies that kept funeral equipment, then people who kept expensive wines and Cuban cigarettes in air-conditioned mini-warehouses, but also clients who were engaged in online sales and used it as warehouse.
Possibility to “pack” a two and a half bedroom apartment
The company “Storage of Things” was founded 13 years ago, and they moved first. And then a new job was born from moving, renting small warehouse space. As they say, the corona virus helped their business “flourish”. From the clients, they have companies whose employees moved to work online, so they canceled the business space, all the way to the woman who has three children, and lives with her family in a small apartment, and that is why she keeps a stroller, crib and seasonal wardrobe in their warehouse. The smallest warehouse that can be rented in this company has three square meters and costs 15 euros per month, and when it is well packed, it can hold 45 boxes. Clients usually rent a warehouse space of 20 square meters, and a two-and-a-half-room apartment can be packed there.
“All things in our warehouses are safe because we make lists of when and what goes in and out, and we check everything in front of the client. We also insure against theft and floods. Apart from this, the good years for this job were 2017 and 2018 because, at least according to our experience, a lot of foreign companies came to Serbiam” says Filip Savic, director of the company “Storage of Things”. He adds that more and more often, large cafes and restaurants keep their summer gardens near them, and as the strangest thing they entrusted to them, he remembers the wreckage of a car from which even weeds grew. The owners were fans of the old timer, and later transported that car to America.
“It also happens to us that someone rents a warehouse, stores things, pays for a month or two, and never shows up again. If the owner does not show up and does not pay after three months, we have the right to sell the items at auction. It happens to us that we fill about 20 trucks a year with things that no one takes,” says Savic.
The first job of moving, the second renting a mini-warehouse, was also the business trip of the company “Selidbe-Stosic”. As they say, about 60 percent of their clients are private individuals who keep complete furniture and white goods with them.
“The price of renting small warehouses is from 50 to 150 euros a month, and people usually take it for a month or two. It happens to us that they leave things and after that they never show up again, but we throw it away,” says the owner of the company Dragan Stosic.
The owner of the company “Rent a Box”, Ivan Bozovic, got the idea for this job from television and from the experience he has from abroad. According to his assessment, everything that is current in Europe now and what is being done there, came to Serbia in a little less than a decade. And so it is, from services to construction. Renting small warehouse space is an additional activity for this entrepreneur as well, in addition to the already existing business that he has been working on for years. It started a few months ago, and as he says, he has high hopes for renting a mini-warehouse.
“Our current clients are smaller companies, but I expect that more and more individuals will come forward. Today, the construction of apartments is such that there is no storage room or basement, and then where can people keep the things they need, but not every day. This is the trend in Europe as well. For now, people are taking up space for a shorter period of time, a month or two. The price is 85 euros a month for a warehouse in the form of a ship’s container of 14 square meters,” explains Bozovic.
According to his assessment, this type of business, in our country, could come to life and become more widespread in about three to five years. He advises all those who want to deal with it to buy land first, at least 10 acres, in a good location, where forklifts and larger trucks can approach. And then the so-called “containers” which are mini-warehouses, and their price depends on the size and quality.
Poles give a franchise
While this type of work is still “in diapers” in our country, statistics show that every tenth household in America rents additional space for storing things. That, in fact, means renting a smaller warehouse, and it is estimated that there are more than 48,500 of them across America. Companies that rent and maintain “private warehouses” collect a total of about 24 billion dollars annually. In Poland, one company, from this type of business, also made a franchise. Namely, although “Kangu Self Storage” is not the only company that rents warehouses in Poland, it was among the first to introduce the possibility of giving a franchise.
“This sector is still not saturated. There are only a few companies in Poland that do the same business, so the competition is not strong. However, most residents are still unaware that such a service exists. And we know that there is a need, because we receive a large number of inquiries for partnership every day,” said Przemyslaw Guwczewski, director of “Kangu Self Storage”.
Opening a warehouse, however, requires a lot of work. For the construction and preparation of the facility, depending on the planned volume of business, in Poland should be allocated from several hundred thousand to several million zlotys. That is why Kangu Self Storage offers two models of cooperation. The first is a joint venture, where they cover most of the investment. This model also implies that the partner, in addition to the regular salary for warehouse management, also receives a share in the ownership of the company. Another form of cooperation is classic franchising, so that the franchisee invests in the rental or purchase and adaptation of the facility. In addition, he is obliged to pay a monthly franchise fee.
The Polish experience shows that it is important that warehouses are available 24 hours a day, seven days a week. The entire complex should have at least 1,000 square meters and be located in the central city zone. Preferably, the rental period should be as flexible as possible, BiF reports.
