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Safestore Holdings of the UK to Acquire Stork/Alligator Self Storage for £56M

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U.K. self-storage operator Safestore Holdings PLC has agreed to acquire Stork Self Storage Holdings Ltd., which operates the Alligator Self Storage brand in England, for £56 million. The cash deal includes 12 properties comprising 563,000 rentable square feet. Ten of the facilities are either freehold or long-leasehold, with two leasehold properties having an average of 15.4 years left on their lease agreements, according to a press release. The transaction is expected to close on Nov. 1.

Safestore officials believe the locations of the new assets complement the company’s existing portfolio in London and Southeast England. Alligator has properties in the Camden borough of London as well as Fareham, Farnham, Luton, Southampton and Winchester in the Southeast. It also operates three facilities in Birmingham and one each in Bolton, Bristol and Nottingham.

The deal will increase the number of facilities in Safestore’s U.K. portfolio to 120, with 67 in London and the Southeast. In its third-quarter earnings report, the operator announced occupancy for its U.K. stores was 72.5 percent. The Alligator portfolio is at 68 percent occupancy, the release stated.

"Over the past 15 months, Safestore has cemented its market-leading position in the U.K., investing £100 million in two earnings-accretive acquisitions, and opening four new sites with a further two stores in the pipeline,” said Safestore CEO Frederic Vecchioli. “These transactions have supplemented the organic growth being delivered by the existing business.”

Last year, Safestore acquired a 12-property portfolio operated by Space Maker Stores Ltd. The deal added 496,000 square feet of storage space to the brand.

Alligator’s pro forma earnings before interest, tax, depreciation and amortization, after rent, was £4.3 million per year based on revenue of £7.5 million. The portfolio has an implied first-year net operating income yield of 7.7 percent, according to the release. The transaction will be funded from Safestore’s existing debt structure, with the group’s £60 million “accordion” financing converted into a revolving credit facility.

The deal will bring Safestore’s total portfolio to 146 storage facilities. It currently operates 134 self-storage sites, including 108 facilities it owns in the U.K. and 26 in France. Its wholly owned properties comprise more than 5.7 million square feet of storage space, while its entire portfolio serves approximately 55,000 customers.

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