Brookfield, GIC Clinch Deal to Buy Australia’s National Storage for $2.6B

Asset management giant Brookfield and Singapore sovereign fund GIC have agreed to buy Australia’s National Storage in a deal valuing the ASX-listed REIT at about A$4 billion ($2.6 billion).

Under the terms of the agreement, the Brookfield-GIC consortium will acquire 100 percent of National Storage for A$2.86 in cash per stapled security, according to a Monday stock filing. With more than 290 locations, the Brisbane-based company is the biggest self-storage provider in Australia and New Zealand.

The acquisition price represents a 26.5 percent premium to National Storage’s closing price of A$2.26 on 25 November, the last trading day before the company announced its receipt of a non-binding proposal from the consortium. The board has unanimously endorsed the deal, which remains subject to securityholder and regulatory approval.

“The NSR board believes the transaction provides attractive value and certainty for NSR securityholders with an all-cash offer at a significant premium to the undisturbed trading price,” said chairman Anthony Keane. “The offer from the consortium follows a number of earlier offers and a period of negotiation.”

Betting on Experience

If completed, the deal would represent the largest-ever real estate privatisation in Australia, overtaking Brookfield’s own A$1.3 billion purchase of senior living operator Aveo in 2019. Earlier this year, the Toronto-based group sold Aveo to The Living Company, the parent of student housing specialist Scape, for A$3.85 billion in Australia’s biggest direct real estate deal ever.

GIC previously tied up with National Storage on a joint venture to pursue development and operation of self-storage centres. Mingtiandi reported in June of last year that the partners planned to deploy A$270 million ($178.7 million) in total capital during the first 12 to 18 months of the partnership, known as the National Storage Ventures Fund.

Brookfield acquired US-based Simply Self Storage in 2016 for $830 million and grew the portfolio from 90 facilities to more than 200 before selling the platform to Blackstone Real Estate Income Trust in 2020 for $1.2 billion.

“Brookfield and GIC both have extensive experience in the storage asset class in Australia and globally and we look forward to working with the NSR board to complete the transaction,” the partners said.

Next Growth Phase

National Storage managing director Andrew Catsoulis noted that the company evolved from a single storage centre developed in Queensland in 1995 to more than 290 centres with 1.6 million square metres (17.2 million square feet) of storage space at present.

“We are confident this position will be further strengthened with the consortium’s support,” Catsoulis said. “Our focus remains on delivering best in class self-storage solutions for our customers across all the markets in which we operate.”

National Storage previously found itself a target of overseas capital in 2020 when a bidding war broke out between Manhattan-based Warburg Pincus and Hong Kong’s Gaw Capital Partners for control of the REIT.

Nothing came of Warburg’s A$1.73 billion offer for National Storage, and the private equity firm’s StorHub Group ultimately expanded into Australia last year with five locations in Sydney, Melbourne and Canberra.

In May of this year, asset management titan BlackRock entered the Aussie self-storage market by picking up a majority stake in StoreLocal, a A$440 million platform with more than 40 owned and managed assets across the country.

More recently, Sydney-based Abacus Storage King was subject to a A$2.2 billion takeover bid by US giant Public Storage and South African billionaire Nathan Kirsh, but the potential deal fizzled in August over valuation discord.