Titan Storage EIS – Poole

This offer is now closed

This single company offer will invest in a managed storage site in Poole, Dorset. The brand is established, the management experienced and demand strong. 

Highlights

  • Raising £4.5 million to acquire freehold premises and fit out or build a storage facility in Poole, Dorset
  • EIS-qualifying trade backed by institutional-grade freehold property
  • Proven management team which already operates six managed storage facilities
  • Recognised brand
  • Mid-case target return of 1.79x after tax relief – not guaranteed
  • Active M&A market driving up valuations
  • Storage sector steadily growing since the 1980s and appears largely recession proof
  • Advance EIS assurance received
  • Aiming to be allotted before Royal Assent to the Finance Bill
  • Pay no direct initial or ongoing charge through Wealth Club
  • Minimum investment £10,000 – exclusively through Wealth Club

The offer

Active Management Solutions (7) Limited – AMSL (7) – is raising up to £4.5 million under EIS to acquire a freehold property or land in Poole, Dorset, and fit out or build a storage facility.

The site has not yet been identified. It could either be a property or land. The site will have a Net Lettable Area in the region of 30,000 to 35,000 sq ft. and will preferably be on or near a main road and other local amenities, trade counters and other businesses. 

After a site has been acquired, AMSL (7) will develop and fit it out into a storage facility operated by Titan Storage Solutions under the Titan brand name. 

It will offer flexible storage solutions to both domestic and business customers within a 20-minute radius of the store – from home movers to people downsizing or decluttering their homes, to business users.

Poole is an affluent town in the South of England. It merges with several other towns to form the South East Dorset conurbation, which has total population of 465,000. 

The opportunity

Demand for managed storage in the UK has steadily grown since the 1980s with many operators reporting consistently strong performance. 

The key drivers of demand are social factors such as smaller houses, moving home, marriage, divorce, retirement and bereavement. For businesses, storage proves extremely useful for a number of reasons notably archiving records, stock lock ups, and housing equipment.

The sector financials are attractive. Operating costs are typically far lower than other asset-backed sectors, such as leisure and healthcare, with EBITDA margins often exceeding 50%. 

Strong sector performance, good customer diversity, low fixed operating costs, recurring revenues and increasing demand are driving yield and potential investor returns. Indeed, storage businesses proved resilient even through the 2008/2009 financial crisis.

Safestore – one of the leading operators – did not see its profitability decline, whilst Big Yellow experienced only a 4% fall in EBITDA between peak and trough.

Please note, though, there is no guarantee this strong sector performance will continue in future. 

Target return and exit strategy

The projected mid-case return is 1.79x after tax relief (not guaranteed), or 1.25x before tax relief. These are based on an exit yield of 7%: returns could be higher or lower than this.

The disposal price is expected to be based on annual EBITDA capitalised at a projected yield. Based on recent comparable deals, the directors assume an exit yield of 6% to 8%. This is a projection and is not guaranteed. 

An exit is targeted from year 5 onwards and could be achieved via a business sale, a management buy-out or refinancing: exit options and timings are not guaranteed.

It is worth noting there have been multiple exits of storage sites throughout Europe.The largest deal in the UK market was the acquisition of Big Box Storage by StorageMart for £100 million in 2016. StorageMart is the world’s largest privately owned storage company with 189 sites across the US, Canada and the UK.

The management

The management team will be responsible for establishing and operating the Poole site along with the other seven Titan branded sites already in existence (six fully operational and one due to open later in 2018. 

The team comprises Ducalian Capital, a venture capital firm specialising in the development of operational real estate, and individual industry experts.

In the last three years Ducalian Capital has raised and invested almost £30 million to develop a portfolio of storage businesses across the UK and has now established Titan as a significant provider of storage to domestic and business customers.

Along Ducalian, other key members of the team include Chris Griffin, a Chartered Surveyor with 15 years of experience in the design and development of storage. Chris was part of the original Shurgard UK set up and went on to project manage the construction and development of its 15 storage sites.

Supporting the team are key advisers from Jones Lang LaSalle (property adviser), Chritchleys LLP (tax adviser and accountant), CBRE (Valuation adviser) and GSC Solicitors LLP (legal adviser). 

Fees

There are no direct charges to Wealth Club investors: all charges come from the underlying investment company. 

An initial fee of 3% of total funds raised will be charged directly to the Company. The Company will be charged by Ducalian an annual management fee of 2% of total funds raised.There is a performance fee of 25% paid on returns over £1. Please see the Offer Document for full details on fees.

Risks

This is a high-risk single company investment: capital is at risk. Please ensure you read the report and the Offer Document carefully. You should not invest money you cannot afford to lose. Returns are not guaranteed. The value of tax benefits depends on circumstances and tax rules can change.

Our view

Overall we believe this is a good opportunity to invest in an EIS-qualifying investment with strong asset backing led by a highly experienced team. Over the last 10 years, this sector has delivered consistent growth and strong underlying performance, although this is not a guide to the future. It’s a relatively predictable business model with attractive upside potential.

The terms and structure of this offer aim to allot shares prior to Royal Assent to the Finance Bill. After that, the terms, including the risk profile, could change or this offer may not be available at all. 

Wealth Club aims to highlight investments we believe have merit, but you should form your own view. You should decide based on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 14.02.2018

The details

Type
Single company
Sector
Storage
Target return
-
Funds raised / sought
-
Minimum investment
-
Deadline
CLOSED

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