Investors

The Best Performing Real Estate Asset In The UK.
Self Storage Units From £3,750

The first affordable, fully owned self storage commercial property investment to be released into the UK and available to global buyers.

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You will receive income from a 6 year lease already in place upon completion, making this a high yielding, hassle-free investment which has been specifically designed to meet the needs of today’s astute investor.

Investment Summary
• Invest from only £3,750
• Maximum investment £1m, average investment spend £60,000
• Purchase price 25% less than RICS valuation (immediate capital gain)
• Full title deed on your storage unit in your name
• Leaseback unit for 6 year initial contract
• Guaranteed return (after deductions) of 8% in year 1 and 2
• Forecast return after deductions of 10% in years 3 & 4
• Forecast return after deductions of 12% in years 3 & 4
• Variety of exit strategies from year 2 onwards

Self-Storage was first established in the UK in 1980’s, initially in the London area. The industry continues to grow steadily in the UK and for the five years to 2009 has recorded growth rates of between 8% and 15% per annum.

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Market Appraisal
Storage rental has continued to increase in both price and volume during this period. This has been fuelled by the growth of multi-site operators such as Safestore, Big Yellow, Access, Lok’n Store, Shurgard, Space Maker, Storage King and HSIL Property, as well as smaller businesses looking to enter the sector.

The latest UK Self-Storage Industry Association (SSIA) annual report, prepared by Mintel in February 2010 reveals that the UK self-storage industry has remained resilient and continued to grow throughout the recent economic slowdown. The report concludes that new operators are coming into the market and that consolidation and re-organization is starting to take place within the sector – a sure sign of business confidence in the industry.

In comparison, other commercial property sectors have seen a sharp decline since 2008 due to the recession and subsequent economic slowdown.

Demand for storage facilities has historically exceeded all targeted projections and demand is still increasing – as evidenced in the Mintel report. There are a number of reasons why both consumers and businesses are increasingly turning to self-storage.

For consumers the primary reasons remain social factors such as the increase in single occupancy households, families moving home, marriage, divorce, retirement and downsizing. Lack of available suitable housing stock for families and single people all result in the need for consumers to enter into storage for both short and long term contracts.

Businesses are increasingly using self-storage solutions to store and archive files and paperwork, to store stock and office equipment and to meet fulfillment needs driven by e-commerce. The flexibility of self-storage has a strong appeal to small and medium sized businesses who do not want to make a large capital outlay for storage space. In addition to this, growing public awareness of the industry and the concept of self-storage have also contributed to its development. For these reasons, the UK’s Self-Storage companies have seen the highest growth and highest yielding returns within the commercial property sector over the last decade.

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Return On Investment

Examples of the Storepods, 100% owned by the investor with a title deed

The following examples are for illustration purposes and are based on the minimum initial investment of £3,750. Our typical investment amount now exceeds £60,000 per client. Maximum investment level £1,000,000.





Total Return
Including the income, this gives a forecast total return of £7,765 over 6 years, or 108%.
There are three income streams:

• Service charges
• Management charges
• Sales of other products such as packaging, gloves, tape and boxes. Sales of these products can contribute as much as 25% of the total revenue of a storage site.

This gives them a large margin of comfort to pay Storepod owners their fixed rental payments and the fact that the agreement between Management and the Storepod owners contains upwards only rental reviews is an indication of their confidence in their business model.

Rotation of Storepods
Storepods of equivalent size are rented out on rotation to ensure that no one particular Storepod has any advantage over another.

Income
All figures are net of costs
Initial Investment £3,750

Year 1 – 8% – £300
Year 2 – 8 – £300
Year 3 – 10% – £385
Year 4 – 10% – £385
Year 5 – onwards 12% – £470

*Year 1 & 2 are fixed, years 3 onwards are forecast returns and could vary.

Capital Growth
The rent per square foot paid out to investors is scheduled to grow from £17 perSq/Ft in years 1&2, to £21 per Sq/Ft in years 3&4, to £25 per Sq/Ft in years 5&6.

Based on the capital value being 8.8 times rental yield in years 3&4 the Storepod will be worth £4,632 and in years 5&6 £5,514

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Exit Strategy
This investment has a flexible exit achieved by sale of the Storepod. There are four possible markets:

- Resale to another investor
A Storepod with a proven rental track record will be an attractive investment for other investors looking to purchase income.

- Resale to Long Term Tenants
Many tenants who let the Storepods on long term deals will welcome the opportunity to purchase rather than rent their Storepod as this will reduce their overheads, secure an appreciating asset for their business and bring tax benefits.

- Resale to a large PLC
Safestore and Big Yellow Storage are two examples of large PLC self-storage companies with an appetite for expansion who may purchase Storepods as part of their growth strategy

- Buy-Back Scheme
In year 5, Investors have the option to enter the buy-back scheme. In this scheme, Management will buy the Storepod back off the investor for the original price paid within the next 5 years.

- Termination and Early Exit
There is no fixed term for the investment – the term of the sub-lease is six years with two year break clauses; however the leasehold interest can be re-assigned at any time.

The two year break clauses allow the investor to rent the Storepod out themselves, but in this scenario they would no longer benefit from the marketing and service infrastructure.

Security for the Investor
• The buildings and contents are covered by a fully comprehensive insurance policy from Brit Insurance a subsidiary of Lloyds of London.
• The property is registered in the investor’s name on a single title deed at the UK Land Registry
• This is a UK investment covered by UK regulations and UK law
• The rental returns of 8% are guaranteed for the first two years, going up to 10% and 12% for the next 2 years for a total of 6 years.

There are investment opportunities across the country in:
• Barnsley
• Blackburn
• Burnley
• Ellesmere Port
• Glasgow
• Leeds
• Liverpool
• Manchester
• Preston
• Rochdale

We think this is an excellent, hands off investment opportunity and is well worth considering as part of your investment portfolio.

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