UK-focused fund manager Moorfield Group and Stor-Age, a South African Real Estate Investment Trust (REIT) and owner of UK self-storage business Storage King, have formed a joint venture to build a £50-100 mln (€109.6 mln) portfolio of self-storage assets in the UK.
The joint venture, which further extends Moorfield’s footprint in the real estate ‘alternatives’ space, aims to develop self-storage assets with a focus on London and the South East, which will be operated under the Storage King brand.
Moorfield will be the majority investor, on behalf of its Moorfield Real Estate Fund IV.
The JV is in advanced discussions on a number of acquisitions, leveraging Storage King’s established relationships and industry experience to secure off-market opportunities. The Storage King brand is currently operated by 28 stores, providing over 1 million sq ft of storage space across the UK. The pipeline comprises a mix of subject-to-planning development sites, turn-key developments and existing investment assets.
The partnership with Stor-Age represents Moorfield’s entry into the estimated £800 mln (annual turnover) UK self-storage industry, which has been growing at approximately 6.5% p.a. since 2005 but which continues to be characterised by low penetration in key urban conurbations. The sector has been one of the more resilient since the outbreak of the Covid-19 pandemic, with European rent collection rates outperforming logistics, retail and office.
Moorfield's activities in the alternatives segment already comprises Build-to-Rent, student accommodation and retirement villages. More recently, the firm has entered the nursing and dementia care home sector with a £125 mln partnership with Allegra Care.
Marc Gilbard, CEO of Moorfield Group, commented: 'As a specialist alternative real estate investor with a track record of generating strong returns from the timely recognition and discerning exposure to sectors benefitting from changing demographic and societal change, the UK self-storage sector is a natural fit for our investment portfolio.
'Replicating the strategy of our recent nursing and dementia care-home partnership, we have selected a best-in-class partner whose operational and origination expertise will enable us to both access the sector and then scale a portfolio in a meaningful way. Self-storage as an asset class has been one of the more resilient during this period of uncertainty and is set to benefit from a number of favourable structural trends, and with a strong pipeline of assets already identified, we are excited to be launching this latest venture on behalf of our investors.'
