Newcore Capital Management has moved into the self-storage sector through a partnership with Engage Management Services.
The alternative real estate investment manager’s Newcore Strategic Situations IV value-add fund is committing an initial £10m (€11.7m) to build a portfolio of freehold self-storage assets in the UK.
Using debt and recycling cash, Newcore said it expects to invest £25m in the sector over the next 18 months, which would equate to around five assets.
Newcore will target assets in the south-east of England, as well as other regional locations, such as Bristol and Bath.
The manager said it will either acquire existing buildings or sites on which to develop new-build facilities.
The £100m Newcore Strategic Situations IV fund will own the assets and self-storage operator Engage will be the operator and development manager.
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, Llewelyn said.
“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.”