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. Last Updated: 07/27/2016

Stash Away Your Junk

Balconies crammed with aging furniture and apartments where one locked room is bulging with odds and ends are a familiar sight to Moscow's renters. Whether it's due to a shortage of space or financial resources, the hoarding habit seems hard to break.

By the end of this month, the finishing touches are to be added to a new storage facility whose executives acknowledge that they will have to work hard to reverse the mentality that perpetuates the practice of squirreling things away in otherwise livable space. In a newly renovated space on Nizhegorodskaya Ulitsa, the installation of a final round of security devices protecting hundreds of units is to mark an important milestone for KeySpace, whose self-storage units will likely be a bellwether for similar ventures.

"We just saw that there was no self-storage in Moscow, and indeed in Russia, and we believe the market's right for it," said general director Mark Britten.

The appearance of such a facility, where residents and businesses alike can store belongings in locked units of varying sizes under camera surveillance, seems to be part of a larger trend. In the United States and Canada, there are about 51,000 self-storage facilities, totaling roughly 206 million square meters. In the United Kingdom, there are about 575 such facilities, according to KeySpace's market research, as well as two in Poland and one in the Czech Republic.

"There is definitely an eastward development going on," KeySpace CEO William Oswald said.

Although it would seem that expats, already familiar with self-storage, would be the natural client base, Britten and Oswald say they expect to draw primarily native Muscovites.

Oswald says the region has characteristics that make it a viable market. Part of the success of self-storage businesses in some areas of North America comes from a constantly changing climate that often means additional equipment is accumulated, perhaps skis for the winter and roller skates and bicycles for the summer.

KeySpace, which shares a parent company with OSG Records Management, opened its doors earlier this year.

Units vary in price depending on the size and duration of time they are to be rented, company officials say, and will be quoted to customers on an individual basis. A unit that is 5 square meters will likely cost somewhere from 6,500 to 7,500 rubles per month. The company will also keep an ear to the ground and let the market dictate their prices, Oswald said.

Courtesy Of Keyspace
By the end of this month, the finishing touches are to be added to the new facility.
Real estate experts say that the success of the enterprise most likely will be determined by the company's ability to gauge the willingness-to-pay aspect of the local market adequately.

Four Squares real estate agency director Michael Bartley said there was indeed a need for storage space, as it is not uncommon for problems to arise in the rental market when landlords look to store furniture in rental units.

"Quite often there are issues with that," he said, adding that, for many, the traditional route was to take surplus furniture to the dacha.

In part, success would depend on people getting used to the concept of self-storage. "It's like everything else -- with anything that's new to the market, it takes time to develop awareness and understanding," Bartley said.

A potential barrier to doing well in this sector of the economy, he said, lies in pricing. "The rate might be too high for locals."

Courtesy Of Keyspace
Individuals and businesses alike can store things in locked units of varying sizes.
Because the concept of self-storage is so new to Moscow, contractors had to be trained in how to construct the specialized units, particularly on the mezzanine level, KeySpace representatives said. Software had to be adapted to Russian rules and regulations. And of course, company officials had to work through the usual bureaucratic maze that must be navigated to set up a new business in town.

"It has been difficult, but we have two advantages," Oswald said. "We are quite practiced about doing things in developing economies, and we already had a footprint in the ground here."

While managing OSG Records Management, which provides storage space mostly for corporate clients' records, Oswald said he found that many initially felt uneasy about entrusting them with key documents.

"Yes, there still definitely is a familiarization process," he said. But he said he was hopeful that self-storage would catch on here.

"One of the things that spurred us on was how evident it was to us that it was badly needed," he said. "I don't think many use their balcony for relaxing and sipping wine."