Stor-Age adds to UK portfolio in joint venture with Nuveen

Stor-Age, SA’s only specialist self-storage real estate investment trust (Reit) has formed a joint venture with Nuveen Real Estate to buy Easistore, a fourproperty self-storage facility in the UK.

Nuveen will take a 90% stake in the venture and Stor-Age’s 10% stake will cost £4.4m including transaction and rebranding costs, the company said in a statement on Wednesday. The investment has an estimated forecast pre-tax yield of 15%, Stor-Age said.

NatWest will provide funding for the acquisition via a £41m interest-only facility with a fiveyear term.

JSE-listed Stor-Age has a portfolio of 86 self-storage properties across SA and the UK. It also owns the sixth largest UK self-storage brand, Storage King, whose portfolio represents more than 50% of the group’s property assets by value.

CEO Gavin Lucas said the Easistore acquisition is the third, four-store portfolio that StorAge has either bought or partly acquired in the UK in the past 15 months.

The acquisition will bring properties owned or managed and trading under the Storage King brand to 39 from 35 by the end of 2023 as current developments come on stream.

“We’ve built a strong foundation in the UK under the Storage King brand, thus enabling us to pursue significant growth on all fronts in a nimble manner,” Lucas said.

“Our joint venture with Nuveen and the acquisition of Easistore demonstrates the strength, competitiveness and sophistication of our platform.”

The Easistore portfolio, measuring 22,500m², comprises modern and purpose-built properties located in dense and commercial areas of Edenbridge, Maidstone and Tunbridge Wells, giving Storage King a greater presence in Kent, while the Crawley property enables the expansion into West Sussex.

Lucas said the properties would be rebranded and managed by Storage King under its third-party management platform, Management 1st.

Stor-Age has the right of first refusal should Nuveen wish to exit any of the properties or the portfolio. Nuveen is the largest global investment manager, with about $154bn of assets under management, and the acquisition is part of its strategy to bulk up its European portfolio.

In a trading update in March, Stor-Age reported that total occupancy in the UK increased by 3,200m² in the year to date, with the average rental rate increasing by 8.3% year on year.

The company has a development pipeline valued at about £64m in the UK which includes the development of properties in Heathrow, Bath, Canterbury, West Bromwich and Site 5 that are expected to add about 270,000 square feet of gross lettable area to the current portfolio of more than 131,000 square feet.

Stor-Age is also expanding a property in Milton Keynes that includes the conversion of office space to self storage.

In SA and the UK, Stor-Age’s development pipeline will add about 55,000m² of space to the portfolio during the 2024 financial year.