Fundraise of £10 million completed in March 2017
Following a successful fundraise of £10 million, the investee companies have been in the acquisition and establishment phase for the four managed storage sites.
Storage (WM) Ltd
In our September 2019 update, we advised that the company had sold its Cannock site to an institutional buyer. As that sale progressed, it became apparent that larger purpose built facilities were commanding a higher price per square foot when sold. The proceeds generated from the sale of the Cannock site are therefore to be used by the company to fund the development of its second site, a 45,000 sq. ft. facility in Burton. Construction of this Burton facility is nearing completion and the internal fit-out commenced 9 March 2020.
Up until the Government’s restrictions following the Coronavirus outbreak, the company’s plan was to start taking bookings in June 2020, with the site opening to the public in the summer. Work is currently still carrying on, however there is likely to be a delay in the facility becoming fully operational linked to the length and severity of the Covid 19 lockdown. In this scenario due to the highly automated nature of the facilities, ongoing operating costs can be well managed.
Storage (NW) Ltd
In our September 2019 update, we advised that the company had sold its Bolton site to the same institutional buyer who purchased the Cannock site (see above). The proceeds generated from the sale of the Bolton site are therefore to be used by the company to fund the development of its second site, a 42,000 sq. ft. facility in Wigan.
Formal planning permission was granted for the Wigan facility in January 2020 and demolition of the existing building has been completed. The building of the new facility commenced in the second week of March 2020 with the store originally planned to open in October 2020. Despite the Government’s restrictions following the Coronavirus outbreak, work is currently still carrying on but very much on a week to week basis at present.
In our view, the successful sale of the trading units at Cannock and Bolton, as well as the sale of a further facility from our Managed Storage EIS Fund No. 2, vindicates the site choices made by the Surestore team and whilst it can take longer than originally anticipated to locate the optimum sites and obtain planning consent, the facilities generate high demand from potential buyers once they are fully operational.
There will be some inevitable delays and costs incurred following the Coronavirus outbreak. However, this has proven to be a resilient business model in previous times of recession and following the asset sales the businesses are very well funded.
Please see www.surestore.co.uk for further information.