Self-storage company Safestore Holdings announced that it has acquired the remaining 80% of its Benelux joint venture from Carlyle Europe Realty for €67m.
On Thursday morning, Safestore stated it has bought the remaining 80% of the ownership from its partner in the joint venture, where Carlyle received a total of €67m in compensation.
The Joint Venture was purchased for an enterprise value €146m.
The overall initial cash outflow is €139m, which includes a €67m share purchase, a €67m refinancing of existing borrowings, and a €5m transfer tax and other deal charges, were paid for using the Safestore’s existing loan facilities.
“Combining Safestore’s highly scalable operating platform and development experience with Carlyle’s investment expertise proved to be a successful partnership. We are now exploring further opportunities to work together,” said, Safestore CEO, Frederic Vecchioli.
Benelux Joint Venture was formed in 2019 between Safestore and Carlyle Europe Realty with the goal of using Safestore’s operational platform outside of its main regions by acquiring and developing assets in the Netherlands and Belgium.
Safestore has managed the properties since acquisition by Benelux.
Since the start of the joint venture, it has evolved to a 592,000 sqft MLA portfolio that is currently 74% occupied.
The MLA portfolio consists of 15 high-end buildings with 12 freehold properties, 2 ground leases and 1 leasehold property.
In the Netherlands, there are 9 locations, 6 of which are focused in the Haarlem-Amsterdam area, with other locations in The Hague, Het Gooi, and the recently established Nijmegen location.
In Belgium, there are 2 stores in the Brussels area, 2 in Liege, and more locations in Nivelles and Charleroi.
The investment is estimated to be slightly lucrative for the group profits per share in FY2021/22 and will help the Safestore maintain its dividend cover in the future.
Based on total enterprise value, the estimated initial yield is 3.9%, which is expected to reach Safestore’s normal returns threshold as the portfolio matures. Safestore’s LTV will climb to 31% following the deal.
Following the transaction, the company’s financing potential under Safestore’s RCF and Shelf facilities, along with its cash reserves, is projected to be around £219m.
Safestore shares have gained 0.45% to 1,341p following news of the acquistion.
Marc-Antoine Bouyer, Managing Director, Carlyle Europe Realty advisory team, stated, “This transaction marks the culmination of a major acquisition and asset management effort through our joint venture with Safestore to assemble an institutional-quality self-storage portfolio of scale with exposure to prime cities in the Netherlands and Belgium.”
“We believe that the market fundamentals for European self-storage remain highly attractive and look forward to working alongside Safestore in identifying further opportunities on the continent.”