Schroders Capital, the $111 billion private markets business of Schroders, has announced the launch of a new self-storage investment platform, “The Self Storage Partnership.”
Building on the real estate team’s existing self-storage exposure and broader specialist industrial capabilities, the launch provides investors, including existing Schroders Capital clients and funds, with access to dedicated self-storage investment and operational expertise.
It has launched with an initial investment of more than £100 million, from existing institutional and wealth clients, including Local Government Pension Scheme investors and the Schroders Capital Semi-Liquid Global Real Estate Total Return Fund. Clients will be able to invest into a private REIT structure, enabling it to scale and grow efficiently.
Schroders Capital boasts extensive expertise in the sector, having invested in self-storage solutions since 2017 in the UK. This partnership adds to Schroders Capital’s existing track record in operational and value-add real estate through its sector-leading hotels platform, which currently manages £3.1 billion in hotel businesses, operated by a team of 38 people located across London, Paris, Milan and Amsterdam.
Schroders Capital sees a compelling investment opportunity for consolidation and growth in the UK’s self-storage market due to significantly lower lettable space per capita than more mature international markets, such as the US and Australia, coupled with enduring demand and a highly fragmented operator landscape.
The Self Storage Partnership capitalizes on this opportunity by creating a best-in-class UK self-storage operating platform, combining real estate investment returns with a private equity approach focused on operational expertise and driving the creation of long-term enterprise value.
As part of this strategy, alongside acquiring and developing properties, the platform will explore additional opportunities to generate new revenue streams, such as through the creation of dedicated management teams to run the assets and further enhance enterprise values.
The platform has acquired eight modern, purpose built, facilities concentrated in Greater London and strong regional centers, with robust supply and demand fundamentals as well as strong sustainability credentials. The portfolio also includes a prime development site, with further income-producing and development assets under consideration as the platform looks to achieve scale at pace.
Kieran Farrelly, Global Chief Investment Officer for Real Estate, Schroders Capital, says, “Today’s launch of The Self Storage Partnership marks a major milestone for our real estate business as we continue to drive specialist entrepreneurial strategies that align with today’s changing capital needs and maximize value.
“As real estate allocations shift from traditional sectors to operational assets, we see self-storage as an attractive opportunity to deliver ‘pass-through’ inflation-linked cash flows while achieving superior risk-adjusted returns. The sector's growth, driven by key demographic shifts and market dynamics, presents an exciting opportunity for our existing and prospective investors.”
Matthew Baddeley, Lead Asset Manager, Schroders Capital, said, “Our self-storage platform has launched with a portfolio of resilient, income-producing assets, as we look to deliver resilient, long-term value for our investors. Two of the facilities we acquired earlier this year in Southport and Gloucester are great examples, which added approximately 110,000 square feet of lettable area to the portfolio. Both assets are EPC A-rated, with Nokē systems, EV chargers, PV panels and batteries installed.
“Our expertise in active management and operational real estate means we are well-placed to further capture the opportunities emerging from the sector’s expected growth; we look forward to growing our exposure and building on this momentum.”
Schroders Capital’s UK real estate team has a proven track-record, with over 50 years of experience and deep expertise spanning investment and portfolio management as well as asset operations. It continues to recognize the increasing demand for self-storage solutions which form a key part of its broader industrials and logistics portfolio of $4bn across the UK, Europe and Asia.
Schroders Capital’s real estate business is a strategically important growth area, with the team currently managing over £22.8 billion of assets in a range of strategies across 16 markets globally.