Blackstone buys Melbourne’s Fort Knox Self Storage business for $400m

Private equity firm Blackstone has snapped up Fort Knox Self Storage in a $400m deal.

US private equity firm Blackstone has snapped up Fort Knox Self Storage, which owns a portfolio of properties across Melbourne’s suburbs, with the $400m deal shaking up the hot sector.

The purchase of the 11 strong network, from a Melbourne family that built up the operation over the last 25 years, added about 10,933 storage units to Blackstone’s local holdings.

The deal, brokered by JLL’s Tony Iuliano, has shone a light on the growth of the sector, which is a big winner from e-commerce as last mile services use the facilities.

Before the pandemic a three way tussle for National Storage broke out between rival private equity firm Warburg Pincus, US giant Public Storage and Hong Kong’s Gaw Capital, and the one-time target company has since built up its assets to $3.25bn.

Abacus Property Group also poured $370m into the self-storage sector during a busy first quarter, saying this part of its business was performing well in the face of lockdowns and it would keep expanding.

Blackstone head of real estate Australia, Chris Tynan, flagged his group’s ambitions in the sector saying it would work in partnership with Fort Knox and grow its self-storage footprint in Australia.

“Backed by Blackstone’s scale and expertise, we aim to help Fort Knox expand and scale operations to accommodate customers’ increasing demand for high-quality storage space nationally,” he said.

The deal adds to Blackstone’s self-storage investment in Australia, after it bought the KeepSafe portfolio in Perth.

Self-storage is a rapidly growing trend in Australia, underpinned by its rising population and the country’s e-commerce boom.

Strong e-commerce growth is also propelling Australia’s self-storage sector and revenue is predicted to jump to $US32bn by 2024, from nearly $US26bn in 2020, a year-on-year increase of about 16 per cent.