Newcore Capital Management is entering the self-storage sector through a strategic relationship with established self-storage operator Engage Management Services. Newcore is committing an initial €11.7m (£10m) of equity from its €117m (£100m) Newcore Strategic Situations IV value-add fund to build a portfolio of freehold self-storage assets in the UK. Using debt and recycling cash, Newcore expects to invest €29.2m (£25m) in the sector over the next 18 months, which would equate to around five assets.
Newcore Strategic Situations IV will own the assets and Engage Management Services, which was set up in 2009 to provide independent advice and management services to the self-storage industry, will be the operator and development manager. The name of the self-storage brand has yet to be determined.
Geographically, Newcore will target the south-east of England, which is its favoured investment area, as well as other strong regional locations, such as Bristol and Bath. Newcore will either acquire existing buildings or sites on which to develop new-build facilities.
Hugo Llewelyn, Managing Director of Newcore, said: “We believe this is an opportune time to invest in the self-storage sector for our five-year investment horizon. The UK is still undersupplied in self-storage in the major urban conurbations and there is little new supply coming onto the market. The sector has also proved resilient through the downturn. Self-storage is a challenging market to enter, as you need a strong operating platform, so we are delighted to have partnered with Engage, which has a very impressive track record of performance.”
