Battle heats up for National Storage takeover
The battle for the country’s largest self-storage companies has kicked off with Hong Kong-based Gaw Capital Partners in talks to buy the listed National Storage REIT in the first major property takeover of the year.
News of the play for the $1.73 billion company was revealed by The Australian’s DataRoom column.
The company’s shares spiked before closing 6.31% higher at $2.19 as the parties did not disclose the price of the bid.
The real estate investment trust sector is having a strong start to the year with confirmation of the interest in National Storage a marker for future plays, as offshore groups can borrow cheaply to buy up local assets, including alternative asset classes.
The move also demonstrates the attractiveness of listed Australian property groups to offshore suitors despite their elevated trading prices.
The National Storage REIT confirmed that it had received a takeover bid from Gaw Capital Partners on Thursday morning.
It came after DataRoom revealed that the real estate investor was believed to be in the crosshairs of a suitor, with a party locking in offshore funding for a bid.
“The board wishes to advise securityholders that it has received a confidential non-binding indicative proposal from Gaw Capital Partners for 100 per cent of the issued stapled securities in National Storage REIT,” the company said in a statement to the market.
“Discussions are at this stage preliminary and subject to a number of conditions and there is no certainty that the discussions will lead to a final recommended offer.”
The board told shareholders to take no action and did not disclose a price, although the company’s shares had run up in recent trading.
Working for National Storage REIT is JPMorgan while Gaw Capital has tapped Goldman Sachs.
For the 2019 financial year, National Storage REIT produced a $144.8 million net profit and market analysts believe its platform remains valuable.
The company is Australasia’s largest self-storage owner-operator, with more than 60,000 residential and commercial customers at more than 170 storage centres across Australia and New Zealand.
Globally, the demand for self-storage is expanding, at a time when its yields are seen to be reasonably high in a low-yield environment.
It comes as many bet that the real estate space is ripe for deal activity this year, with the cost of acquiring an entire real estate company in many cases currently cheaper than buying the assets individually.
Gaw Capital manages $US8 billion of property investments and National Storage has been on the expansion trail.
Last year, the company raised $358 billion, which allowed it to snap up more storage facilities. The company’s assets under management jumped by more than 36% to $1.95 billion.
This article originally appeared on www.theaustralian.com.au/property.
