Two Pioneers Bring Self-Storage To East Africa

East Africa is made up of eight countries. It has the highest elevations on the continent. And Mount Kilimanjaro rises more than 19,000 feet above it all. Now, something new is coming to the region: Self-storage. This is due in large part to Storage Central Kenya and its visionary founders, Gerardo Segura and Nicholas Sadron.

Segura, who founded Más Espacio, a successful self-storage company in Argentina, saw an opportunity in East Africa due to rapid urbanization, a burgeoning consumer base, and millions of SMEs (small and medium enterprises that drive economic development in the region) needing help. So he and Sadron launched operations in Nairobi, the capital of Kenya, and home to 5.5 million people. 

According to Segura, the market in Nairobi comprises about 1.5 million households, 7 million SMEs, 50,000 expatriates on short-term contracts, and around 15,000 non-government organizations (NGOs) engaged in activities such as humanitarian aid and infrastructure development.

"When we initially sought local investment, there was skepticism regarding the demand for storage solutions in Nairobi’s market," says Segura. "[However], our entry into the market has been met with success, even amidst challenges such as the COVID-19 pandemic, global economic uncertainty stemming from geopolitical events such as the Ukraine conflict, and local political transitions."

Industry Pioneers

Segura says Storage Central Kenya differentiates from the competition – moving companies, security firms, and a few international movers which were the primary means of storage solutions in the past – by offering transparent pricing, modern facilities, and strategically located sites that enhance accessibility. However, he believes that the company's primary competitive advantage lies in being pioneers.

"We are the first movers in this sector, scaling self-storage operations with a focus on quality and reliability," states Segura. "Previously, storage solutions often utilized inaccessible and unsafe locations like old warehouses deep within industrial areas. Our approach ensures that self-storage is executed correctly from the outset. While others may have had similar ideas, we are the ones who have taken definitive action. This initiative allows us to set the standards and lead the market. Essentially, we are building a brand synonymous with superior self-storage services."

Segura says that while 60% of customers are residential, the company also caters to diverse sectors, ranging from healthcare logistics for NGOs to document storage for legal and accounting firms. "We [have worked with] impactful clients like Doctors Without Borders and journalists who store equipment while traveling the region," adds Segura. "Recently, we partnered with one of the largest electric vehicle manufacturers, storing 160 electric motorcycles and battery packs conveniently located near Kenya’s inland container depot, facilitating efficient import operations."

Developing The Brand

Segura understands the importance of having an online presence. To that end, he says that they have collaborated with a marketing agency and that today, approximately 90% of the company's advertising spend is digital.

Additionally, Storage Central Kenya has implemented a call center solution to streamline client inquiries and ensure calls are efficiently directed to the sales team.

Lastly, Segura says the company is developing its own CRM system to replace its previous US-based provider. "This new system will enable online payments and bookings directly within Kenya, resulting in substantial cost savings of approximately $500 per month per facility in Nairobi alone," he notes.

Future Growth

Storage Central Kenya is currently adding an average of 60 new customers per month, states Segura, and has served more than 1800 clients in the last three and a half years.  "However, we believe this is just the beginning for us... Our focus is on expanding into key East African cities with strong purchasing power and active trading sectors. This includes Dar es Salaam in Tanzania, Kampala in Uganda, Kigali in Rwanda, and eventually Abuja and Lagos in Nigeria. Additionally, we are considering markets like Mauritius, which has a sizable expatriate community."

Segura points to three different development strategies the company is considering:

• Continuing to engage high-net-worth individuals and family office groups to raise capital incrementally and proceed step by step with expansion efforts.
• Forming a strategic partnership, e.g. partnering with an East African pension and insurance group with investments in self-storage and commercial real estate.
• Securing project-specific investors for each country, e.g. partnering with local entities in Tanzania, or seeking venture capital or private equity investors capable of leveraging competitive bank financing.

"My dream is to expand our operations to include between 10 and 15 stores within the next five years, ultimately creating a $200 million business," says Segura. "Ideally, we aim to list the company on the Alternative Investments Market in London, providing it with a sustainable corporate framework beyond [myself and co-founder Nicolas Sadron]. We believe that achieving annual revenues of $10 to $15 million will position us well for this next phase, potentially leading to a successful listing."

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Information curated from various business sites including Marcopolis, a leading press and communications agency specializing in executive business reviews tailored to individual countries.