Kangaroo Self Storage targets fresh expansion after agreeing £1.6m Edinburgh warehouse deal with SRA Ventures
Wednesday, 08 March 2017
Edinburgh-based property investment specialist SRA Ventures has agreed the sale of a large warehouse facility to Kangaroo Self Storage in a deal that will allow the company to expand its reach into the capital for the first time.
Kangaroo believes that the £1.6million purchase of the partially occupied 27,000 square foot property in Edinburgh’s Sighhill Industrial Estate represents a significant lynchpin in its ambitious growth strategy after recently securing new finance with HSBC.
The Haddington-based storage company announced in January that the package from HSBC would allow it to expand its existing Glasgow facility, further invest in its Dundee operation, and lay the framework for expanding into new locations.
The Bankhead Drive deal is now the first in an anticipated series of fresh acquisitions that Kangaroo plans in response to rising customer demand.
SRA Ventures, founded and owned by leading Scots entrepreneur Shaf Rasul, previously acquired the under-performing site - located next to Catalyst Trade Park and the Burton’s biscuit factory - from Len Lothian Limited in January, noting its significant market potential and suitability for a range of large-scale users.
SRA quickly let part of the Bankhead Drive site to two occupiers, but after an approach from Kangaroo, were happy to instead transfer the investment to the storage specialists upon hearing of its exciting growth ambitions.
The deal has also given Kangaroo its first customers in the shape of two ecommerce businesses which had a pre-let to occupy part of the site.
Chris Stevens, Managing Director of Haddington-based Kangaroo, said that the Class 6 warehouse represented a perfect strategic fit for a storage business of its size.
He stated: “We’ve been looking for something of this scale and in this location for some time, and had previously noted the property’s potential availability when still under the ownership of Len Lothian Limited. The added attraction of buying it from SRA Ventures, which had already pre-let some of the space, resulted in a guaranteed income stream from day one.
“We are delighted to now be acquiring it formally from SRA after quickly concluding a deal that works well on both sides.
“Prominence, access and passing traffic were key considerations for us when it came to securing this excellent property, and we look forward to fully harnessing those attributes amid heightened demand across all sectors.”
The warehouse is located in the heart of West Edinburgh, just four miles from the city centre, and ideally positioned for easy access to the city by-pass, M8, M9 and M90 motorways.
Mr Rasul said: “As the only property of such a scale available in the capital, where suitable warehouse accommodation is at a premium, we were certain that it would command strong interest from a number of potential large-scale rental users, and that was certainly the case, as demonstrated by the two pre-lets.
“However, Kangaroo Self Storage immediately proved to be an excellent fit for the property, taking advantage of its existing Class 6 designation, its guaranteed income stream from the pre-lets, and being keen to swiftly secure full ownership.
“With that goodwill on both sides, a deal was quickly agreed that suited all parties.
“We are also pleased that Kangaroo plans to work with the current tenants who were delighted to stay on, further underlining the site’s desirability to its growing customer base.
“SRA Ventures wishes Kangaroo all the best with its acquisition and further success as it pursues its growth ambitions. It is undoubtedly a business that is going places.”
SRA was advised on the disposal jointly by Ryden and Graham + Sibbald.
Keith Watters from Graham + Sibbald said: “We were delighted to advise and help in the acquisition, asset management and, ultimately, the disposal of this site. Thanks to careful selection of tenants on the pre-lets, the site has netted SRA Ventures a net profit of £350k in under two months. This represents a significant 29 per cent return on investment.
“We are also delighted to announce that SRA has retained us for another year as commercial property advisors, and are sure that the partnership will grow from strength to strength. This is demonstrated by our plan to announce a number of deals which are coming to fruition over the next couple of weeks.”
SRA was advised by Scots legal firm Gilson Gray. Head of Real Estate, Murray Stewart said: “We were pleased to advise SRA Ventures on all aspects of this transaction, which represents a landmark deal for all concerned. Kangaroo’s entry into the vibrant Edinburgh market is to be welcomed and SRA was in an ideal position to facilitate it.”