Schroder UK Real Estate Fund (‘SREF’), has completed the purchase of a portfolio of self-storage assets, comprising over 230,000 ft², from The Self-Storage Company, for over €48.5m (£44m).
The deal, which comprises five properties situated around London and the M25, also sees SREF acquire the intellectual property and company brand, with The Self Storage Company team retained to manage the portfolio.
The acquisition is the first foray by SREF into the emerging self-storage market, which is seen as a major growth opportunity within the alternatives sector. One of the first institutional investors to enter the space, SREF sees potential to expand The Self Storage Company portfolio further, leveraging the strength and reputation of the existing brand to acquire and operate more sites over the next few years.
The growth of the self-storage market is largely viewed as a response to evolving demographic trends, particularly in highly urbanised areas, such as Greater London. The changing nature of millennials living patterns and the growth in demand for rental accommodation, coupled with a growing desire amongst older generations to ‘downscale’, has led to an increasing demand for self-storage space amongst different users. With storage space also in high demand amongst start-up businesses and online retailers, SREF anticipates that the sector will continue to grow.
James Lass, Fund Manager, Schroder UK Real Estate Fund, comments: “The growth in demand self-storage is inextricably linked to key demographic trends that are driving demand for real estate. This acquisition fits perfectly with our strategy for investing in areas of the market that are well placed to benefit from the structural themes that will drive returns going forward, and in winning cities where GDP growth should be significantly higher than the average. The way we use space is changing like never before, and consumers are now increasingly looking for flexible storage, in response to shifting demographic trends, for a variety of different reasons.”
