Leading self-storage company locks in future growth following funding from Santander UK and HSBC UK
Storage King, the nation’s sixth largest self-storage company, is planning to further expand in the UK, having received £50m funding from Santander UK and HSBC UK in a 50:50 split.
The £50m funding package comprises a three-year term loan and revolving credit facility, which will refinance and restructure the South African-owned company’s debt in the UK. The funding was provided through a two bank ‘club’ facility, comprising Santander UK and HSBC UK.
West London-headquartered Storage King, which was acquired by South Africa’s largest self-storage company Stor-Age in November 2017, currently operates 22 self-storage sites throughout the UK. Since taking ownership, Stor-Age has invested in significantly increasing its UK property portfolio. Over the next five years the company aims to add two to four properties annually, and to increase capacity at several of its existing sites. This follows its acquisition in 2019 of the five-property Flexi Store portfolio, with sites in Dudley, Nottingham, Shrewsbury, Warrington and West Bromwich, and its purchase of an additional self-storage property in Blackpool earlier this year.
Demand for self-storage facilities has grown during the pandemic, driven by an increase in house moves and changes in people’s life circumstances. This trend has contributed to an increase in Storage King’s UK rental occupancy rate to 90%, up from 75% pre-pandemic. About two-thirds of its customers are residential and the remainder are commercial.
Gavin Lucas, CEO of Stor-Age said: “We are delighted to be working with Santander UK and HSBC UK and are pleased to have put in place our new ‘club’ lend facility. Our UK operations, which trade under the brand Storage King, have performed exceptionally well over the past 18 months. We have ambitious plans to continue growing our UK portfolio both through new developments and the acquisition of trading properties, and this new facility will play an important role in supporting that growth.”
Rob Purdew, associate director, Strategic Debt Solutions at Santander UK, said: “As a high-growth and acquisitive company with an international ownership structure, Storage King is exactly the type of business that Santander UK is equipped to support. We’re pleased to act as agent bank to provide this financial package to Storage King in support of its goal to expand its property portfolio in the UK.”