Daniel T. Borger Real Estate Advisory Services
Following a recent deep dive with Daniel T. Borger Advisory, REFIRE is continuing to explore Germany's nascent drive-up garage park market, a segment with growth potential that could shape future real estate investment. While garage parks may be familiar in the U.S., where the self-storage industry is well-established, Germany’s market is only beginning to catch up.
Borger has become THE go-to expert in the Garage Parks sector in Germany, with a wide repository of knowledge and data spanning the whole German market on the sub-sector, part of the more widely familiar Self-Storage industry - itself little understood outside the small circle of specialists active in the sector.
Borger's latest White Paper positions this asset class - Garage Parks - as an attractive opportunity, with the country poised for thousands of new facilities over the next decade. Here’s what investors should know:
1. Untapped Market Potential
Currently, Germany has around 600 garage parks, compared to nearly 60,000 self-storage facilities in the U.S. Borger estimates that, based on comparable U.S. usage rates, Germany could support up to 10,000 garage parks, and Europe up to 50,000. With only a fraction of this potential developed, the sector is seen as a largely untapped investment opportunity.
2. Rising Demand for External Storage
In Germany, less than 1% of the population uses self-storage compared to 10% in the U.S., suggesting strong latent demand. Shifts in living trends—such as downsizing, urbanisation, and an increase in remote work—are driving the need for flexible storage solutions.
Daniel Borger
3. Advantages of Drive-Up Garage Parks
Unlike traditional indoor storage, drive-up garage parks are situated in commercial zones, allowing direct access to larger units averaging 30 square meters. These locations cater not only to individuals but also to small businesses, offering storage for everything from vehicles to tools and equipment. Security measures like fencing and surveillance enhance their appeal.
4. Geographic Concentration and Expansion Potential
Approximately 40% of Germany's garage parks are in North Rhine-Westphalia, while other regions, particularly in the north and east, remain underserved. The sector’s leaders, such as Storage24, are pushing for greater national coverage and significant expansion across Europe.
5. Financial Appeal for Investors
Rental rates in the sector are rising, averaging 4.4% annual growth from 2019-2023, with top operators achieving over 6% increases. Current rents of around €5.87 per square meter reflect high demand and limited supply, making garage parks an appealing alternative asset with stable returns even in volatile markets.
6. Sustainability Edge
Garage parks have minimal environmental impact compared to other property types. With low energy and water usage, no permanent on-site staffing, and limited emissions, they stand out for investors focusing on sustainable assets. The sector’s low operational footprint enhances its appeal.
Daniel Borger
7. Development Momentum and Investor Interest
Drive-up garages are gaining traction among developers and private equity firms alike. Compared to traditional real estate, garage parks offer a high return on development costs and relatively low construction expenses, attracting both large-scale institutional investors and smaller investors seeking stable returns.
8. Europe’s Garage Park Market Taking Off
The nascent European market, led by Germany and neighboring countries, has seen Storage24 emerge as a major player, holding a quarter of the German market and actively expanding in France, Austria, and Scandinavia. This cross-border growth underscores the potential of garage parks as a distinct asset class ripe for development.
Borger is convinced the outlook for the drive-up garage park sector is robust, with favourable conditions likely to persist for the foreseeable future. With an obvious gap between supply and demand, and a cost-effective balance for both construction and operations, the industry presents an attractive landscape for local and international investors alike. Whether looking to make targeted, small-scale investments or seeking broader portfolio additions, this sector's potential in Germany and Europe is hard to overlook.
About Daniel Borger
Daniel T. Borger, who has spent over 25 years as an independent consultant in real estate, has guided numerous private equity firms on acquisitions and asset management strategies across Germany and Europe. With a deep understanding of the emerging potential within alternative asset classes like drive-up garages, he remains the pivotal advisor for those eyeing this burgeoning segment.
Daniel T. Borger Real Estate Advisory Services
Contact: d.borger@danieltborger.com