Stor-Age had entered into a joint venture agreement with Nuveen Real Estate, and the JV had acquired the four property Easistore portfolio in the UK, a statement from Stor-Age, the JSE-listed self-storage group said yesterday.
Stor-Age’s equity contribution in the deal is £4.4 million (R101m), with an estimated forecast pre-tax yield on investment of 15%.
Nuveen will acquire 90% and Stor-Age a 10% equity interest in the JV, with the properties to be branded and managed by Storage King under its third-party management platform – Management 1st.
Stor-Age said the JV was an opportunity to partner with one of the world’s largest, most established global investment managers.
Nuveen has $154 billion of assets under management, with an 85-year investment track record, for which the acquisition forms part of their European Value Add strategy.
“The JV allows Stor-Age to grow and achieve further scale in the UK whilst providing an attractive return on invested capital. It also continues to leverage the third-party management platform through generating both acquisition and ongoing property management fees,” Stor-Age said.
The JV will initially implement the portfolio re-brand and management platform overlay, with a view to expanding Nuveen’s exposure to self-storage assets across the UK over the medium term.
The acquisition of four freehold UK properties and the JV was in line with Stor-Age’s ‘capital light’ growth and investment strategy of the Storage King business of pursuing value-added acquisitions in the UK, the statement said.
The portfolio consists of mainly modern, purpose-built properties in Crawley, Edenbridge, Maidstone and Tunbridge Wells. They trade into dense residential and commercial areas.
The Easistore acquisition is the third four-store portfolio that Stor-Age has either acquired or part-acquired in the UK in the past 15 months.
Stor-Age’s share price increased 1.07% to R13.24 yesterday midday on the JSE. The price was only slightly lower than R14.57 it traded at a year ago.
BUSINESS REPORT