JSE’s real estate investment trust (REIT) Stor-Age, the only listed self-storage property fund in SA, will shortly enter the UK self-storage market with an estimated R1.3bn acquisition of the region’s sixth largest operator, Storage King.
The acquisition is in line with Stor-Age’s stated strategy of targeting international markets with attractive growth potential to "complement its ongoing success" in the South African market, said CEO Gavin Lucas, adding that Stor-Age cannot rely on South Africans only to rent storage units.
The Storage King transaction is expected to be concluded next month.
"Storage King offers established critical mass through a high quality portfolio, proven local expertise and a track record in self-storage with consistent earnings growth, especially over the past three years. This provides us with a strong and scalable platform, with in-place management, for future growth and expansion," Lucas said.
The REIT would settle the £77.13m purchase price through a mix of equity and debt. Stor-Age has negotiated for a re-financed £25m debt facility in Storage King, which will effectively see Stor-Age pay a purchase price of about £53m (R887m) for 97.3% of the issued shares, with the balance of the shares being acquired by management of Storage King on the same terms.
The Storage King portfolio includes 13 properties throughout England with a bias towards the South East and East, and an average occupancy of 78% (about 50,300m² of gross lettable area).
A further 12 properties trade under licence of the Storage King brand in the UK, generating licence and management fees. This makes 25 properties in total under the Storage King brand, which exclusively owns the brand rights for the whole of Europe and has in place a pipeline of third-party acquisition opportunities.