U.K. self-storage operator Big Yellow has struck a £150 million ($308.4 million) joint venture with Pramerica Real Estate, the property investment and advisory arm of Prudential Financial Inc., to develop up to 25 storage facilities in the English Midlands, North England and Scotland. The deal is set to seal on Nov. 30.
Big Yellow and Pramerica are investing up to £25 million and £50 million respectively in the partnership. All further investments by the companies in the endeavor will carry this 1:2 ratio. They have also secured a five-year, non-recourse loan of £75 million from the Royal Bank of Scotland PLC to provide investment and development funding.
As part of the deal, Big Yellow will sell five of its existing development sites and an existing facility in Leeds for a consideration of £20.3 million. The initial proceeds from the sale will be used to further the company’s expansion in South England and finance its contributions to the partnership. The company has also entered conditional contracts to sell two of its development sites in Birmingham and Manchester. In addition, it will provide development and operational management services on the partnership’s sites in exchange for certain acquisition, planning, construction-management and operating fees.
Pramerica offers investment opportunities and management services in Asia, Europe, Latin America and the United States. As of June 30, the company managed $39.6 billion in gross assets on behalf of more than 300 clients worldwide. For more information, visit http://www.pramericarei.com.
Big Yellow was founded in 1998 by Nicholas Vetch, Philip Burks and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in 2002. It operates 45 self-storage facilities, with an additional 27 sites in development. For more information, visit http://www.bigyellow.co.uk.