Moorfield enters self-storage market with plans for £100m venture

Real estate fund manager Moorfield Group has agreed a joint venture deal with a South African self-storage company to help it build its UK business. The transaction sees Moorfield team up with Stor-Age, a Johannesburg-listed real estate investment trust, to target a £100m initial portfolio in the UK across London and the South East. Moorfield will invest in the portfolio through its Moorfield Real Estate Fund IV, and the assets will be managed by Storage King, the UK business acquired by Stor-Age in 2017. With a first deal imminent, the joint venture is lining up development sites awaiting planning permission as well as existing investment assets. The deal is Moorfield’s first in the self-storage industry, following its entry into alternative sectors including build-to-rent, retirement villages and, most recently, care homes. “Self-storage was definitely something that we were coming across as we were looking at logistics, but we were also coming across it as we were thinking of the residential pathway,” Moorfield chief executive Marc Gilbard told EG. “You’re looking at people who are moving into rented space. Maybe they have furniture and belongings, bicycles, surfboards, climbing gear, whatever it might be that they want to store, and they don’t want to be in accommodation where the space is reasonably tight.” Gilbard visited Stor-Age’s headquarters in Cape Town and was struck by the company’s use of technology, including a team monitoring social media for direct marketing opportunities. “This is not about sitting back and waiting for someone to knock on the door and say, ‘have you got a storage facility that I can use?’” Gilbard added. “This is about the using social media and other means to track people’s hobbies, habits and demands and directly marketing to that… That is what blew me away.” Trade body the Self Storage Association estimates that turnover in the UK’s self-storage industry has been growing at around 6.5% a year since 2005 to reach £800m, but that there remains a supply and demand imbalance. The Federation of European Self Storage Association said the sector has proved resilient during the coronavirus pandemic, with rent collection outpacing office, logistics and retail. For Gilbard, the deal with Stor-Age is the next step in Moorfield’s strategy to tap into an increasingly broad variety of alternatives sectors. “Our starting point is to be aware of the macro environment, to look for demographic shifts, societal shifts,” he said. “They can be political, they could be legislative, they could be trends in the way technology is advancing different areas of the market. We are often looking for a reason that doesn’t really have to relate to property for us to focus on a particular investment theme where we feel there is going to be either disruption or where we think that a new area of the market might emerge.” To send feedback, e-mail tim.burke@egi.co.uk or tweet @_tim_burke or @estatesgazette