Helsinki, Finland: Since 2010, Talliosake has built drive-up storage units and sold them on. Now it plans to keep them. CBRE Capital Markets Finland has advised the Finnish developer on Talli, a new Nordic joint venture backed by an investment from Heitman, a global investor managing about €42.6bn in assets.
The deal has two parts: Heitman's investment into the joint venture, and the sale of Talliosake's rental operating business to it. Talliosake stays on as a minority investor and the platform will be led by its existing management team. The aim is to develop new drive-up units across Finland and Sweden for entrepreneurs, businesses and consumers.
The change of strategy is the real story. Talliosake has so far concentrated on developing and selling individual units. Talli will instead pursue a develop-to-hold strategy, creating and operating income-producing assets for long-term ownership. It starts from a proven base of more than 230 buildings and over 6,400 units, used by customers for storage, workshops, production, maintenance and other commercial activities.
CBRE says the match was deliberate. Jouni Levo, Head of Capital Markets at CBRE Finland, says "We identified a strong operating business with significant potential to accelerate its growth through a shift in business model and matched it with an investor that has a long track record of supporting and scaling self-storage platforms globally." For Mikko Lahtinen, CEO of Talli Nordics, the search was about shared vision. "Our objective was to find a partner that shares our long-term vision and has the capacity to help us realise it," he says.
Several questions that matter to investors and developers remain unanswered. The transaction value and the stake Heitman will hold have not been disclosed. Nor is it clear how the venture will fund a hold strategy that no longer relies on cash from unit sales, or how much debt will be used. The fate of Talliosake's sales pipeline is also unknown: will buyers of individual units keep arriving, or will they become tenants of an institutional landlord? Given that land and planning consent decide the pace of any rollout, how much development land is already secured is the question that could shape returns most.
Heitman, founded in 1966 and headquartered in Chicago with its European base in London, invests through private equity, debt and publicly traded real estate securities. If Talli scales as planned, Finland and Sweden may become a proving ground for institutional drive-up storage across the Nordics.
People mentioned
- Jouni Levo: Head of Capital Markets at CBRE Finland
- Mikko Lahtinen: CEO of Talli Nordics
Companies mentioned
- CBRE Capital Markets Finland: adviser to Talliosake on the establishment of the joint venture
- Heitman: global real estate investment management firm and investor in the Talli joint venture
- Talliosake: Finnish drive-up self-storage developer, seller of its rental operating business to the joint venture and minority investor
- Talli: Nordic drive-up self-storage joint venture, led by Talliosake's existing management team
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