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Self-storage firm Beam, cashes in on vacant industrial space

Singapore

THE oversupply of industrial space in the market bodes well for Beam Space, says Anna Chew, CEO of the one-year-old warehousing and logistics startup, in a recent interview with The Business Times.

The "storage concierge" company - an integrated self-storage company that provides add-on services such as transportation, delivery and mobile inventory keeping - is taking advantage of the high-vacancy environment to lease space at attractive rentals.

The company says it can generate five to seven times returns at current rents. According to JTC's latest statistics, about 1.2 million square metres (sqm) of warehouse space was vacant as at the second quarter of 2017.

Beam has leased some space in a ramp-up warehouse in Singapore, but declined to disclose the location. It is in talks with other industrial landlords and aims to triple its current floor plate in the next six months.

While market watchers question the security of leasing self-storage space from third-party space providers, Beam says that it has installed security measures within the warehouse, and all items stored with it are insured.

Ms Chew adds that leasing from third-party owners is a win-win solution for both sides: "It benefits the landlords because they don't have to leave that space empty; it benefits me because I don't have to be locked into a long-term contract at a certain rate."

Beam differs slightly from other self-storage companies in that it charges storage fees on a per-item basis, and for contract periods as short as one month. This makes it more affordable compared to traditional self-storage companies such as StorHub, Extra Space Asia, and Singapore Post's Lock+Store. For the traditional firms, customers sometimes have to take up a larger locker space than they require depending on the locker sizes that are available. Their contract periods are also much longer.

For this reason, Beam says that it has attracted e-commerce companies as they are able to reduce their space requirements as their inventory stock sells down. Other common corporate customers include event companies, as well as law firms and accounting firms. How Beam works is, it ferries the customer's items to the storage facility and photographs the items. It then uploads them onto an app for ease of browsing and request of delivery anytime the customer wants a certain item back.

In the next phase of its app, it is considering adding a new function, to create a virtual marketplace for unclaimed storage items that have to be thrown out because their owners did not pay their monthly rent or claim back their items despite repeated reminders.

Ms Chew welcomes news that the government is adding another 394,000 sqm of warehouse space for the rest of 2017. "It is good because we can pressure landlords and negotiate rates favourable to us. There will continue to be excess space, and we can always do joint ventures which benefit landlords as well."

The company is looking to work on either a negotiated expansionary model (pay-as-you-expand) or a profit-sharing model with landlords. It plans to maintain a low base rental rate and be selective about choosing premises which allow for expansion either on site or close by.

Beam recently also soft-launched in Malaysia, and has a small warehouse in Klang Valley within a gated and guarded facility. Ms Chew, a Malaysian, says demand there is "robust" because thus far, there has been no real professional service provider, and companies have taken to renting terrace houses to store their items because to store them in industrial facilities would cost much more.

Beam, which started in October 2016, is seed-funded by a few venture capital investors and individual investors. It is currently doing a second round of fundraising on an equity crowdfunding platform, called FundedHere, to raise S$200,000 to S$400,000 to expand the business and ramp up its marketing efforts.