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A typical concern of self storage owners is the freehold property worth. While this used to encompass just its real assets (land, buildings, site improvements, fittings and fixtures, etc) and its notional leasehold or business value elements, it now also needs to include its “digital real estate”. This has been defined as website names, social media accounts and other markers that stake out a digital space on the internet as being yours. This includes you!
People and service are intertwined in digital self storage – so far! The industry now faces new challenges to stay relevant, front-of-mind, and profitable. Astute owners and operators need to recognise this earlier rather than later or risk seeing their value(s) erode as others win market share.
In our disruptive economy where change is relentless, current and future value relies upon management innovation and proactivity including your digital real estate presence. This is a fundamental as the world gets ever smaller and the choice(s) gets ever wider.
If you aren’t maximising your business and its digital real estate assets as part of your everyday operations, rest assured someone else is!
From a going concern valuation perspective, a contemporary question should now include how your digital real estate value is recognised (if you have one) and more particularly how it is:
- quantified in dollar terms
- measured as a contribution to overall value and
- blended in to a valuation description and given a quantified value.
Answers to the above valuation questions require you as owner to possess and use cutting-edge operational systems to provide reliable, measurable, real-time data as a necessary first step in giving your digital real estate a value. The impact of digital real estate on current and future value requires the valuation profession to be thinking about this now.