Dutch pension fund manager APG and CapitaLand Investment Limited (CLI) have committed an initial S$570m (€403m) to establish an Asia-focused self-storage platform.
The partners have the option to increase their investment up to S$1.14bn.
APG will hold a 90% interest in the venture which has acquired the pan-Asian storage company, Extra Space Asia (ESA), as its seed investment.
ESA was founded in 2007 with two facilities and has since grown into one of the region’s largest self-storage businesses with about 70 owned and leased facilities across six Asian gateway cities – Hong Kong, Kuala Lumpur, Seoul, Singapore, Taipei and Tokyo.
Graeme Torre, head of real estate for APG Asset Management Asia, said: “The self-storage sector is ideally accessed at scale and with local execution capability.“
Torre said the asset class was fully aligned with the theme of urbanisation, which had been one of APG’s core investment beliefs for many years.
Patrick Boocock, CEO of private equity alternative assets, real assets, CLI, said: “Self-storage is one of the alternative asset classes that has remained impressively resilient during the pandemic and looks set to continue benefitting from strong growth tailwinds supported by favourable demographics and lifestyle trends in Asia.“
Patricia Goh, managing director, Southeast Asia, CLI, said the strategic partnership with APG would leverage each other’s strengths to grow the platform.
Goh said CLI would contribute expertise in fund management and operational know-how to manage the platform.
“With the foothold gained through acquiring ESA, we will next look at scaling the platform through mergers and acquisitions as well as conversion of existing assets into self-storage facilities,” she said.
“This is an incredible opportunity for the brand, and we’re poised to further cement our position as the market leader in the self-storage industry,” said Kenneth Worsdale, CEO of Extra Space Asia.
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