Heitman secures Ireland self-storage deal; CBRE expects industry consolidation

A CBRE self-storage advisor has said he expects consolidation in the European self-storage sector as well as more international capital flowing to the sector.

Oliver Close’s comments come in the wake of US firm, Heitman, buying a portfolio of six self-storage facilities in Ireland from the Irish operator, U-Store-It.

A transaction price was not provided. However, Close, who is senior director of self-storage in CBRE’s operational real estate team, called it an ‘extremely significant deal’.

‘Over the next year, we expect to see increasing operator consolidation as well as new institutional entrants to the market,’ he said.

'We are seeing intense demand from a range of investors who are looking to place funds in the self-storage sector, driven by a requirement to diversify funds across the real estate universe, an increased appetite for operational real estate generally, and the strong performance of self-storage through the Covid pandemic and previous downturns.'

'Added to this, the self-storage operators both large and small continue to seek growth at pace and the acquisitions route achieves this more quickly than site by site development.'

'Both groups are looking to achieve scale as this has operational benefits, helps with debt potential and widens the buyer pool and drives pricing in the event of an exit.'

He added the U-Store-It transaction underlined the level of interest for larger transactions.

'The limiting factor to consolidation is the number of smaller operators available to acquire at any point in time. However, the weight of demand and current pricing will drive further consolidation over a period of time. We have seen this playing out over a number of years both in Europe and other global markets, notably America and Australia.'

The portfolio includes six prime locations next to major arterial routes across Ireland and Northern Ireland. There are also plans already in place for two new flagship developments in Dublin and Belfast.

CBRE advised U-Store-It alongside Grant Thornton.

Christian Judd, director of corporate finance, CBRE Ireland, added: ‘This is a benchmark self-storage transaction which has demonstrated substantial investor appetite for an exceptional business. The demand from the strongly performing Irish economy provides excellent growth prospects for the self-storage sector.’

 

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