The Reserve Bank’s last reduction in the official cash rate is, amongst other things, recognition of the multi-speed economy affecting Australian business and its customers. The uncertainty created by the GFC and its aftermath has included the withdrawal and tightening-up of traditional financing and credit sources over time by the major banks to the property and investment communities.

Self storage as an industry has weathered this period of low confidence better than most due to the unique operational issues that insulate good performers from the worst of a downturn.

In my experience around the country, facilities have seen reductions in or “flat-lining” of occupancies as customers continue to be affected by economic uncertainty. Whilst trading has therefore been generally lacklustre for many facilities in 2011, a general growth in average rental yields at facilities with judicious management has bolstered and upheld many capital values.

The major banks are now beginning to offer refinancing opportunities, subsequent to the trimming and consolidation of their traditional real estate investment loan books and risk profiles that took place post-GFC.

Improved property fundamentals and loan serviceability allow hesitant bankers to once again recognize that well managed, well-operated going concern self storage facilities remain a good, long term risk as an asset class nationally.