Heitman exited a self-storage joint venture in Singapore with the sale of Mandarin Self Storage to Warburg Pincus-backed StorHub late last year for an estimated S$230 million ($172.2 million), Mingtiandi has learned.
The sale came after the Chicago-based fund manager and its JV partner Angus Miller had built up a portfolio of five assets spanning approximately 600,000 square feet (55,741 square metres) of gross floor area across the city-state, along with a management company operating the business, according to market sources familiar with the deal.
The two companies entered into a sale and purchase agreement in March 2022 and closed the transaction in December shortly after obtaining regulatory approval from the Competition and Consumer Commission of Singapore. The selling price has not been revealed, however, marketing materials seen by Mingtiandi indicated an asking price of S$230 million.
The acquisition formed the coda for a series of pickups by Storhub last year, including deals in Hong Kong and Beijing, as global players including Warburg Pincus competitor Blackstone, Brookfield and CapitaLand continue to pour capital into consolidating self-storage businesses in Asia.
Singapore’s Largest Operator Expands
Heitman is understood to have been the primary financial backer of Mandarin with a 90 percent stake in the business while Miller, an entrepreneur who had created and exited three self-storage businesses in Singapore, Hong Kong and Australia since 1997, held 10 percent ownership.
The biggest property in the Mandarin portfolio is a five-storey warehouse at 9 Bukit Batok Street 22, between Bukit Timah and Jurong East, which adds 156,840 square feet of leasable space to the StorHub portfolio. Located within a residential estate and just a few steps away from StorHub’s existing facility on the same block, Mandarin had acquired the asset from ESR-REIT in 2018 for S$23.9 million.
To the south, StorHub also gained an 87,800 square foot property at 20 Old Toh Tuck Road in Jurong East and a 115,679 square foot facility along Chia Ping Road in Jurong West.
In east-central Singapore, StorHub gained a seven-storey facility at 91 Defu Lane 10 in Hougang – a few blocks away from its existing Hougang location – as well as a 102,500 square foot hub at 26 Riverside Road to add its second location in the Marsiling area near the causeway to Malaysia.
Based on the marketing materials for the Mandarin deal, the portfolio had a 77 percent occupancy rate with a weighted average land lease expiry of 32 years as of June 2021.
JLL is understood to have advised on the deal but representatives from the property agency declined to comment. Mingtiandi also reached out to Heitman, Angus Miller and StorHub for comment but had not received a response by the time of publication.
Heitman, which has over $7 billion of mini storage assets under management globally, sold its Singapore venture as the latest in a series of successful disposals within the niche sector in APAC, Mingtiandi understands.
The company has continued to ramp up its bets on mini-sheds globally, including investing an undisclosed amount in Irish self-storage operator U Store It in mid-2022, shortly after buying three self-storage sites in the UK to be operated under its Space Station brand. The company is also said to be preparing for new ventures in the speciality logistics sector within Asia.
More Space Needed
StorHub’s expansion in its home city, where it already led the market with a portfolio of around 2.1 million square feet across 18 facilities post acquisition, took place at the same time that it was growing its presence in Greater China, after having been acquired by Warburg Pincus in 2019.
Last November, the Singapore-based company acquired a building in the southwest of Beijing’s downtown area to establish its 17th location in mainland China. During October, StorHub acquired three floors in the Precious Industrial Centre building in Kowloon after purchasing seven floors in the building earlier in the year.
Warburg Pincus’ rivals from Blackstone have also been active in the sector, with the US giant’s Storefriendly JV closing on the purchase of a Kowloon industrial building for HK$850 million ($108.2 million) in October of last year, in the latest of a series of Hong Kong investments.
During that same month, CapitaLand Investment and Dutch pension fund manager APG teamed up to buy out Singapore’s Extra Space Asia in a S$1.14 billion (then $810 million) deal.
Also during 2022, Brookfield Asset Management was busy adding to its RedBox venture after buying that business from InfraRed NF in a deal which closed in March 2022.
With homes in the Lion City getting ever pricier and more compact, more residents are turning to self-storage to augment their living quarters, but according to JLL, Southeast Asia’s wealthiest city still suffers from a dearth of mini-sheds compared to Hong Kong or urban hubs in Australia.
“Rising affluence and greater consumption by Singapore’s growing middle class, coupled with small apartment sizes have resulted in the increasing interest and subsequent adopting of self storage solutions in Singapore. Demand from households and businesses is driving the growth while supply has yet to keep pace with demand,” the property agency said in marketing materials prepared for the Mandarin sale.