Moorfield Group is to diversify into the UK self-storage market expanding its presence in the alternatives investment segment.
The UK-focused property fund manager has formed a joint venture with South African self storage REIT Stor-Age. The JV will build an initial portfolio of modern, technology-enabled self storage assets in the UK worth between £50million and £100 million.
Moorfield, which will be the majority investor, is investing on behalf of the Moorfield Real Estate Fund IV.
The joint venture aims to develop self storage assets with a focus on London and the South East region. The portfolio will be operated under the Storage King brand, which currently trades from a platform of 28 UK facilities, which have over 1 million sq ft of space.
More in store – further acquisitions in discussion
Moorfield said in a statement that the JV is in advanced discussions on a number of acquisitions.
Moorfield’s said that the UK self storage industry has a total annual turnover of £800 million and has been growing at approximately 6.5% per year since 2005. However, there is low penetration in key urban conurbations and a general lack of consumer awareness. While the sector in the UK provides 0.73 sq ft per capita, this compares to 9.44 sq ft in the US.
“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,” said Moorfield Group CEO Marc Gilbard.
“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,” he said.