StoreLocal plots national expansion with backing of trillion-dollar giant BlackRock

Investment giant BlackRock’s majority stake in StoreLocal is part of its plan to become a $2bn presence in Australia’s self-storage sector, and take on the expansion ambitions of Public Storage.

StoreLocal co-founder and chief executive Hans Pearson.

Global investment giant BlackRock plans to grow into a $2bn presence in the self-storage sector by expanding the national business StoreLocal in which it has taken a majority stake.

The sector is in focus as Public Storage prepares to step back into the local market, teaming up with SA billionaire Nathan Kirsh for a tilt at Abacus Storage King, where minority shareholders are now demanding a price bump.

That takeover battle has already drawn in local company National Storage and rival US players are also assessing their options. The sector is a mainstay in offshore markets and global players expect the Australian market to catch up to international trends as more people shift into apartments and space is at a premium.

The StoreLocal business set up in 2010 is already the country’s fourth-largest operator with a network of more than 40 self-storage assets in Australia. The company has become a top market player operating a 24/7 unmanned store model and also uses proprietary data analytics to secure custom.

It now has more than $1bn of secured capital and aims to drive growth via acquisitions and developments as well as the expansion of its third-party management platform and brand, to create a self-storage platform spanning $2bn of assets.

StoreLocal is set for a significant injection of funds.

StoreLocal co-founder and chief executive Hans Pearson said that the company had set up a nationwide platform of institutional quality that generated outstanding risk-adjusted returns through a highly diversified tenant base, low capital expenditure and high operating margins.

“We will continue to expand by focusing on in-store income performance, scaling our technology, acquisitions and development, and growing our third-party management portfolio,” he said.

“Meanwhile, our experienced team will continue to innovate the self-storage sector, focusing on delivering the highest operating margins in our markets.”

BlackRock head of APAC real estate Hamish MacDonald said the investment giant prioritised the most liquid and transparent real estate markets across Asia Pacific – namely Australia, Japan, Singapore and New Zealand.

“Many of our targeted sub-sectors have performed very well over a long period of time in markets like the US, and now they can benefit from the ‘APAC lag’ as they are earlier in their structural journey in this part of the world,” Mr MacDonald said.

“Self-storage in Australia is one with such strong market dynamics, and StoreLocal is the market-leading partner we have been seeking.”

BlackRock head of Australia real estate Ben Hickey said that self-storage had shown continued resilience and growth, driven by shifting consumer behaviour, urban densification, and e-commerce expansion.

“What we have seen played out in other markets is happening right now in Australia, where the sector’s fundamentals – low operational costs, consistent cashflows and stable tenant demand – make it particularly attractive,” he said.

StoreLocal has been supported by private investors for more than 15 years. Raising capital through direct relationships, Mr Pearson and co-founder Rob Mactaggart steadily amassed a portfolio as the industry emerged in the mid-2010s.

The operations platform and brand were established with Mark Greig in 2015 and grew to become a national business. Mr Pearson and Mr Greig will continue to lead the business going forward as it delivers on its long-held strategic ambitions.

StoreLocal was advised by Highbury Partnership, and BlackRock was advised by Morgan Stanley.

Originally published as StoreLocal plots national expansion with backing of trillion-dollar giant BlackRock