We've used a similar corner shelving unit to create space in a small 7 by 9 ft room. It's a great, easy shelving solution for small spaces (although installing it was a bit tricky as the walls weren't plumb.
Small Space, No Closet! faux-built in idea. Using a small bookshelf turned outward and a curtain, why not create a closet in a nook or behind a door? Making sure to anchor the bookcase to the wall for stability