US property group buys 11,000 Aussie self-storage units

The importance of storage space in houses and apartments was brought home following the sale of a portfolio of 11,000 storage units to a large institutional investor. 

Chicago-based institutional investment firm Heitman has jointly acquired a portfolio of self-storage units from Investec Bank for $101 million in one of the largest specialised portfolios to be sold this year. 

The US firm has bought the 11 assets spanning New South Wales, Queensland, Western Australia and Tasmania that form the Investec Property Opportunity Fund (IPOF) in partnership with Brisbane-based storage group National Storage. 

Heitman, which has an office in Melbourne, is looking to expand its investment in the Australian property market. 

The acquisition of the self-storage units forms part of a joint $187.5 million joint venture agreement between Heitman and National Storage comprising 20 properties and two businesses, the Australian Financial Review reported. 

Nine self-storage properties were acquired from an unlisted fund run by APN Funds Management. 

The 20 properties total around 100,000 square metres of storage space across 11,000 individual units. 

IPOF acquired the self-storage portfolio for $69.3 million in late 2008 from National Storage and APN National Storage Property Trust. 

IPOF upgraded and expanded seven of the 11 assets to increase their value and boost revenue generated by operator National Storage. 

Head of property investments at Investec Bank Graeme Katz says the sale of the portfolio and triggers a considerable capital return to investors. 

“The fund has realised a return of greater than 20% per annum and over 60% return on equity,” he says. 

Heitman acquired 19 storage facilities in New Jersey and Pennsylvania in a similar joint venture arrangement with with US REIT Sovran Self Storage in August this year.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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