Barings Buys Majority Stake in Aussie Self-Storage Operator Swift for $130M

US fund manager Barings has acquired a majority stake in Brisbane-based self-storage platform Swift Storage for A$200 million ($130.2 million) as the asset class continues to draw institutional investors to Australia’s red-hot market.

The buy includes majority ownership of both the operating business and Swift’s portfolio of 15 existing purpose-built self-storage centres and pipeline of new projects across Queensland, said Barings, a division of American insurance giant MassMutual.

Founded in 2022 by local outfit USS Funds Management, Swift offers contactless, drive-up self-storage with no on-site staff. The deal marks Barings’ entry into the sector in Australia, coming on the heels of self-storage investments by global players including Singaporean sovereign giant GIC and US private equity major Warburg Pincus.

“Self-storage has proven to be a resilient asset class in Australia, and Barings believes there are significant tailwinds and untapped potential in the future,” said Tamara Williams, senior director for private equity real estate at Barings. “What attracted Barings to this opportunity is the calibre of our Swift operating partners — they have a proven track record and have pioneered an efficient operating model for the industry.”

Ready to Grow

Barings aims to scale up Swift into a nationwide, household-name platform, building on the 15 locations in Queensland and Western Australia and five new stores set to open this year. The Swift centres are entirely solar-powered and offer storage units ranging in size from 2.25 square metres (24 square feet) to as much as 74 square metres for “mini warehouse” options.

The transaction between Barings and USSFM was advised by MA Moelis Australia and remains subject to the fulfilment of several conditions, including approval by the country’s Foreign Investment Review Board.

For Barings, a manager of $442 billion in assets worldwide, the Swift buy follows A$2 billion in Down Under real estate investments in the past 18 months, including the A$74 million acquisition of the Joondalup Square mall in Perth and the A$94.1 million purchase of a suburban Melbourne warehouse from funds heavyweight Charter Hall.

The North Carolina-based firm expanded its real estate operation to Australia three years ago with the acquisition of Altis Property Partners, a deal that added $4.3 billion in assets under management to Barings’ global portfolio.

Mini-Shed Movement

With nationwide self-storage occupancy rates hovering near 90 percent, the asset class is delivering yields of 5 to 6.5 percent — comparing favourably with traditional industrial properties in the current environment, according to Ray White Commercial.

“Australia’s housing affordability crisis is inadvertently becoming self-storage’s greatest growth driver,” said RWC research head Vanessa Rader. “As rental costs force downsizing and push residents to outer metropolitan areas, demand for storage solutions grows.”

In June last year, Singapore’s GIC set up a joint venture with ASX-listed National Storage REIT to deploy A$270 million for developing and operating self-storage centres. GIC holds a 75 percent equity interest in the JV, which is seeded with 10 assets sourced from NSR’s existing development portfolio.

Five months later, Warburg Pincus-backed StorHub Group acquired a trio of Sydney facilities valued at more than A$110 million to expand the platform to 11 facilities in Sydney, Melbourne and Brisbane.