JSE-listed real estate investment trust Stor-Age will acquire a 97.3% interest in UK self storage operator Storage King for R1.3-billion.
The acquisition is in line with Stor-Age’s stated strategy of targeting international self storage markets with attractive growth potential to complement its ongoing success in the South African market.
Stor-Age CEO Gavin Lucas says Storage King represents an excellent entry point into the UK market and a springboard for future offshore expansion.
“Storage King offers established critical mass through a high-quality portfolio, proven local expertise and a record in self storage with consistent earnings growth, especially over the last three years. This provides us with a strong and scalable platform, with in-place management, for future growth and expansion,” he added.
Stor-Age will settle the purchase price through debt and equity. Stor-Age has negotiated for a refinanced £25-million debt facility in Storage King, which will effectively see Stor-Age pay £53-million, or about R887-million, for the 97.3% interest in Storage King.
The Storage King portfolio comprises 13 properties throughout England with a bias towards the South East and East, and an average occupancy of 78% of gross lettable area.
The transaction is expected to close in October.