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

Asset management giant Brookfield and Singapore sovereign fund GIC have teamed up on a proposal to buy Australian self-storage giant National Storage in a deal valuing the ASX-listed REIT at about A$4 billion ($2.6 billion).

The Brookfield-GIC consortium made an unsolicited, non-binding offer to acquire 100 percent of National Storage for A$2.86 in cash per stapled security, according to a Wednesday stock filing. With more than 275 locations, Brisbane-based National Storage is the biggest self-storage provider in Australia and New Zealand.

The National Storage board has opened the books to the consortium for due diligence during a period of exclusivity until 7 December, enabling Brookfield and GIC to put forward a binding offer. The exclusivity period is to cease if a superior proposal is received during that time.

“NSR will continue to keep the market informed of any material developments in accordance with its continuous disclosure obligations,” National Storage said in the filing.

Historic Deals

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.

Any potential sale of National Storage would be subject to securityholder and regulatory approval, including by the Foreign Investment Review Board, the Australian Competition and Consumer Commission and the New Zealand Overseas Investment Office.

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.

The JV was seeded with 10 assets sourced from NSR’s existing development portfolio and has an initial term of at least five years.

Mini Sheds, Big Money

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.

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.

Public Storage had also made a A$1.9 billion bid for National Storage in 2020. National Storage holds a 10 percent stake in Abacus Storage King.