Advent Capital enters burgeoning self-storage market

This release was published online in Property Funds World, React News, EG and Institutional Real Estate on 8th November 2021.

Advent Capital Investments Ltd has completed the purchase of a portfolio of assets from The Storage Team, an established self-storage business based in the North West of England. The acquisition marks Advent Capital Investments Ltd’s first foray into the emerging self-storage market, which is seen as a major growth opportunity within the alternatives sector.

The deal sees Advent Capital Investments Ltd acquire The Storage Team’s real estate, intellectual property and company brand, as well as forge a joint venture with its management to assemble a portfolio of scale. Subsequently, the acquisition of three further trading sites has been completed alongside two refurbishment opportunities that will open in 2022, taking the initial portfolio up to eight stores. The portfolio will focus on the North, Midlands and East of England

Advent Capital Investments Ltd will seek to leverage the strength and reputation of the existing brand to acquire and operate more sites over the next few years. Advent Capital Investments Ltd’s thematic approach seeks to ensure its buildings are aligned with occupational demand both now and in the future, through a proprietary asset scoring model that grades each asset according to five core themes: change and disruption, climate and environment, communities and clustering, consumers and lifestyle, and connectivity.

The self-storage market is benefiting from shifting demographic and technological trends. Space is in high demand from start-up businesses and online retailers where frictionless access to the marketplace via social media is fuelling growth. In addition, the changing nature of living patterns, the growth in demand for rental accommodation, and a growing desire among older generations to ‘downscale’, has led to an increasing demand for self-storage space among different users.

James Lass, Head of Special Transactions at MCIM, comments:

“We are delighted to have entered the self-storage sector, which is in line with our thematic approach to investing. This acquisition provides a scalable platform in a supply constrained sector of the market where the underlying growth is linked to structural change rather than short term economic factors. With a pipeline of additional assets in place we look forward to expanding the portfolio in the near future.”

Kevin Thompson, Chief Executive, The Storage Team, added:

“The prospect presented by Advent Capital to not only acquire our portfolio but to retain management to assist in aggressively growing the platform, was exciting for The Storage Team. In such a short period of time, Advent Capital have been true to their word as the portfolio has already doubled in size. In addition, new opportunities are currently being actively sought and considered in the form of both existing assets and new store developments.”

Tom Caines, Director in Alternative Capital Markets, JLL, comments:

“Combining these portfolios presents Advent Capital Investments Ltd with a fantastic platform from which to grow further. With continued high barriers to entry and limited availability of sizeable portfolios across the UK, we have been a big advocate of a northern consolidation play for some time. It’s been a pleasure transacting with Advent Capital on both opportunities and we look forward to seeing the portfolio grow in the coming years.”

Advent Capital Investments Ltd was unrepresented. JLL represented The Storage Team.