The $155 billion (€99.4 billion) New York State Common Retirement Fund has acquired a 51 percent interest in Public Storage’s European self-storage division, Shurgard, for approximately €383 million.
Self-storage companies are popular private equity targets. UK mid-market firm Bridgepoint Capital purchased Safestore, the UK’s largest self-storage chain, for £40 million in 2003. In March 2007, the company’s £209 million public float netted the private equity firm more than £150 million, and that was after a refinancing had given investors some £100 million, UK newspaper The Guardian reported.
Considered a real estate play by the New York pension fund, a spokesman characterised the investment as a “growth opportunity”. The institutional investor frequently makes direct real estate investments; it has a 6 percent target allocation to real estate, currently at 4.4 percent, and a 6.5 percent allocation to private equity.
The pension fund recently made a round of commitments, including $158 million to Bridgepoint’s fourth European buyout fund, which a source told PEO may hit its €5 billion hard cap. New York’s Common Retirement Fund has been investing in Bridgepoint since 1998.
The pension fund previously teamed with Public Storage to expand and take public affiliate PS Business Parks. The US REIT acquires, develops and manages commercial office, industrial and flex properties throughout the US.
Glendale, California-based Public Storage will continue to own the remaining 49 percent interest in Shurgard. As at end of 2007, it had interests in 2,012 self-storage facilities with approximately 126 million net rentable square feet in the US. Shurgard Europe had 174 storage facilities with approximately nine million net rentable square feet in Europe.