Self-storageWest Midlands
£9.2m
Distribution unit converted to 62,000 sq ft self-storage. Development debt rolling to a five-year term at 65% occupancy.
Issue — sponsor's first operational asset.
What we fund
Self-storage transactions we fund
Development and investment, single store and portfolio, trading and pre-trading.
01
Ground-up development of purpose-built stores
02
Conversion of industrial or distribution units to storage
03
Acquisition of trading stores with established occupancy
04
Refinance of a development facility onto investment terms
05
Portfolio consolidation across multiple stores
06
Mezzanine to fund the lease-up period
07
Fit-out and additional unit installation capex
08
Acquisition of sites with consent for storage use
Structures
Structures we place
The defining feature is the gap between practical completion and stabilised income. The structure has to cover it.
Development facility on cost
60–70% of total cost including land, build and fit-out, with interest rolled through construction and the lease-up period.
Roll to investment term
Automatic conversion to a three to five year investment facility on reaching an agreed occupancy trigger, typically 60–70%.
Investment facility on NOI
For trading stores, sized on net operating income with debt service cover tested at a stressed rate over a three to five year term.
Capex and expansion tranche
Committed funding for additional unit installation, mezzanine floors or site expansion drawn against works.
Underwriting
What lenders test
Three questions decide whether a storage facility gets funded and at what leverage.
The lease-up curve
Credit models occupancy month by month against local supply, catchment population and comparable stores. An optimistic curve is the most common reason terms come back lower than expected.
Operator track record
A sponsor with operating stores gets materially better terms than a first-time operator. Where it is a first asset, credit looks for a third-party management agreement or an experienced operating partner.
Alternative use value
The shell is the lender's downside. Industrial or distribution value with the fit-out stripped out sets the floor, which is why conversions of good industrial stock price well.
Track record
Selected self-storage transactions
Self-storageHampshire
£6.5m
Refinance of two trading stores onto a single investment facility sized on net operating income.
Issue — cross-collateralisation across two SPVs.
General locations, clients unnamed. Completed facility sizes, illustrative only — not an indication of terms available to you.
Questions
Common questions
General information on how these facilities are structured and placed. Not advice, and not an indication of terms.
Can a first-time operator get development funding?
Yes, though leverage is usually lower and lenders look for a third-party management agreement or an experienced operating partner alongside the sponsor.
How is the lease-up period funded?
Interest is rolled through construction and lease-up within the facility, with the roll-up sized against the modelled occupancy curve rather than the sponsor's target.
When does a development facility convert to investment terms?
On an agreed occupancy trigger, commonly 60–70%, subject to a revaluation and confirmation of debt service cover.
Do lenders fund the fit-out?
Yes, fit-out normally sits inside the development cost. Additional unit installation later is usually funded through a separate committed capex tranche.
Enquire
Send us the store
Site or store details, lettable area, occupancy position and cost is enough for a first view.
Direct line
+44 (0)20 [ 0000 0000 ]