This article is from the Australian Property Journal archive
SINGAPORE’S sovereign wealth fund GIC has backed the self-storage sector, by teaming up with National Storage REIT (ASX: NSR) and committing $270 million to acquire and develop centres across Australia.
NSR and GIC will hold 25% and 75% equity interests in the joint venture, respectively, which will be seeded by initial portfolio of 10 foundation assets sourced from NSR’s existing development pipeline.
The sale of NSR’s developments to the JV is expected to generate sale proceeds of $120 million for NSR, which will be used to repay debt.
The JV is intended to have an initial term of not less than five years, with the option to extend by mutual agreement. NSR will act as manager of the fund, identify, acquire and develop self-storage assets and will earn fees for services provided.
These developments will be undertaken independently of, and in addition to NSR’s own ongoing development activity and NSR will continue with its own developments utilising its distinct balance sheet capacity and proven in-house development capability.
“Partnering with a respected investment partner such as GIC in the new National Storage Ventures Fund represents a significant opportunity for National Storage to accelerate and diversify its development pipeline and increase operational scale, while maintaining a conservative level of gearing,” NSR’s managing director Andrew Catsoulis said.
“The Ventures JV will assist NSR to maintain a stable earnings trajectory as it accelerates the development pipeline and the new assets are being stabilised. In addition, NSR will be able to further leverage its world class development expertise and utilise its existing platform to improve returns as a result of the fee arrangements forming part of the Ventures JV,” he added.
Citigroup Global Markets Australia Pty Limited and JP Morgan have been appointed as financial advisers to NSR.
GIC’s move comes after Pan-Asian self-storage owner and operator StorHub Group netted $460 million in equity commitments to launch into the Australian market earlier this year.
StorHub Group was launched in 2019 by investment firm giant Warburg Pincus. It has acquired and developed more than 480 stores, covering a 655,000 sqm and housing over 70,000 storage units. It serves nearly 50,000 customers across 17 cities in Singapore, Japan, Malaysia, South Korea, mainland China, Hong Kong, and now, Australia.
