Diversifying into self storage can generate financial security for generations
The self storage industry has emerged as a thriving asset class and has become a popular choice for diversifying investment and business portfolios.
Despite economic challenges such as the pandemic, the cost of living crisis, and the war in Ukraine, self storage remains a profitable option for investors globally. Throughout 2023, the industry has witnessed material M&A activity involving the largest investment and property firms in the world.
Nuveen Real Estate Acquires Self Storage Group
A major player in the real estate investment industry, Nuveen Real Estate, recently increased its European self storage offerings with the purchase of Self Storage Group, a leading Scandinavian provider. This acquisition, valued at NOK3.79 billion, brings Nuveen’s total management of self storage properties in Europe and the United States to nearly $1.5 billion.
Mario Pello, head of Nuveen Real Estate and TIAA General Account in Europe explains: “In Europe, we have been actively monitoring the growth journey of Self Storage Group for a long period of time, given the high quality of the portfolio, the company’s dominant positioning in the Norwegian market and strong synergies with our existing Swedish platform. Through the acquisition of the company, we will create a unique pan-Nordic platform with market-leading positions in Norway and Sweden—two of our high-conviction markets—with scope to expand further into Denmark.”
The recent large deal announcements has caused a surge in demand from various types of investors such as institutions, private equity, high-net-worth investors and syndicator models.
“Self storage is a resilient and profitable option for investors.” – Savills
Savills, one of the world’s leading property agents has explained that investing in self storage has is a resilient and profitable option for investors seeking stable and lucrative opportunities.
“The sector has traditionally been dominated by operating companies developing sites that they have previously acquired, but investors typically access the sector through corporate acquisition or portfolio purchases from existing players, which we expect to grow as the market in Europe expands”, explains Bram De Rijk, Savills European Research Analyst.
Although, it’s not just property and investment experts who have been keeping their eye on the industry. It’s become more common for businesses to diversify into self storage for an additional stream of income, specifically, the agriculture industry.
“Since we have diversified into self storage, we have a much better quality of life.”
Farmers worldwide are currently facing financial challenges within the agriculture industry. However, rural landowners and farmers possess a valuable asset – space. As a result, a trend is emerging within rural areas of transforming agricultural businesses into storage businesses.
In 2007, farmer, Robert Cooks decided to expand his business by adding storage on his property after his farming work became unprofitable. He converted his old cattle shed into a storage facility, which has been operating successfully ever since. Despite the challenges posed by the pandemic and the cost of living crisis in the UK, the facility has consistently maintained an occupancy rate of over 85% and is currently fully occupied. Robert Cooks explains that investing in self storage has yielded a significantly higher return on investment than his previous work as a farmer.
“Investing in self storage has allowed me to buy all three of my children a house, and the financial security has put my family in good stead for the next two generations, which farming wouldn’t have done.”
Find out more here on why now is the time to invest in self storage – https://kuboid.co.uk/why-invest-in-self-storage/
Watch Arden Self Storage case study here – https://kuboid.co.uk/projects/arden-self-storage/
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