Dutch pension fund manager APG Asset Management has teamed up with Singapore-listed real estate company CapitaLand Investment (CLI) to acquire self-storage operator Extra Space Asia (ESA) for approximately S$570 million ($405 million) through a joint venture deal, according to a statement.
APG will hold a 90% stake in a newly-formed entity set out to establish an Asia-focused self-storage platform while the remaining 10% will be owned by CLI. The initial equity of $405 million could be enhanced to up to S$1.14 billion ($811 million) to support its plan for business expansion, according to a press release on Thursday.
While the acquisition marks CLI’s first investment in the self-storage industry, the platform will also benefit from CLI’s ecosystem of assets, customers and digital platforms to grow its business.
Founded in 2007, ESA currently has about 70 owned and leased facilities across Asia Pacific, including Hong Kong, Kuala Lumpur, Seoul, Singapore, Taipei, and Tokyo with over 70% of its net property income being generated in its headquarters country. ESA has a portfolio of more than 1 million square feet (92,903 square metres) of net lettable area with an occupancy of over 90%.
“The self-storage sector is ideally accessed at scale and with local execution capability. This new partnership immediately offers us both. On behalf of our pension fund clients, we are delighted to be partnering with CLI and the ESA team to expand this platform throughout the Asia region,” said Graeme Torre, head of real estate for APG Asset Management Asia.
“This asset class is fully aligned with the theme of urbanisation, which has been one of our core investment beliefs for many years and is a key tenet of our environmental performance aspirations.”
“Self-storage is one of the alternative asset classes that has remained impressively resilient during the pandemic and looks set to continue benefiting from strong growth tailwinds supported by favourable demographics and lifestyle trends in Asia,” said Patrick Boocock, CEO of private equity alternative assets, real assets, CLI.
“This is an opportune time to enter the emerging sector with a new platform that will augment CLI’s funds under management and fee-related earnings…”
APG has been actively working with local real estate partners across the Asia-Pacific. The announcement comes only a month after the Dutch pension fund announced a pair of acquisitions of Hong Kong properties which has a combined worth of HK$1.8 billion ($241 million) through a joint venture with HKEX-listed developer Wang On, per two separate reports on Mingtiandi.
In August, APG teamed up with Singapore’s private equity company CBC Group to purchase two life science parks in Beijing at an undisclosed amount.
Chicago-based brokerage firm JLL advised ESA on the transaction.