Schroders Capital, the private markets division of global asset manager Schroders, has established a new investment platform focused on the European self-storage market. The firm plans to deploy €500 million in equity over the next three years, targeting a real estate sector known for its resilience during economic uncertainty.
The initiative builds on Schroders Capital's extensive experience in operational real estate, which includes sectors like logistics and data centers. The new platform will initially concentrate on acquiring and enhancing self-storage facilities in the United Kingdom, Germany, and the Netherlands.
Key Takeaways
- Schroders Capital has launched a new platform dedicated to self-storage real estate assets in Europe.
- The platform aims to invest €500 million in equity over a three-year period.
- Initial target markets include the UK, Germany, and the Netherlands due to their mature yet fragmented nature.
- The strategy focuses on acquiring and optimizing facilities to deliver stable, inflation-hedged returns for institutional investors.
A Strategic Focus on Operational Real Estate
Schroders Capital, which manages over €40 billion in private assets, is expanding its footprint in operational real estate. This asset class involves direct, hands-on management to improve property performance and generate value, a strategy the firm has refined for more than two decades.
The move into self-storage is a calculated decision based on the sector's unique characteristics. Unlike traditional office or retail spaces, self-storage has demonstrated a low correlation to conventional economic cycles. Its performance is often driven by life events such as moving, downsizing, or business inventory needs, which persist regardless of broader market conditions.
Why Self-Storage Is Gaining Attention
The self-storage sector is often described as "anti-fragile" or recession-resistant. It benefits from consistent demand, high occupancy rates, and predictable revenue streams. Recent economic shifts, including inflationary pressures and the rise of remote work, have had minimal negative impact on this asset class, making it an attractive option for investors seeking stability.
This new platform represents a logical extension of Schroders Capital's expertise in managing properties that require active operational oversight, such as student housing and logistics centers. The firm aims to apply its institutional knowledge to a growing but underserved market in Europe.
Investment Strategy and Market Targets
The platform will operate on a core-plus strategy. This involves acquiring existing self-storage facilities and implementing improvements to increase their value and operational efficiency. The goal is to build a scaled portfolio of high-quality assets across key European regions.
The initial €500 million equity deployment will be focused on three specific markets:
- United Kingdom: A mature market with steady demand.
- Germany: A large economy with growing urbanization.
- The Netherlands: A densely populated region with high property values.
According to Schroders Capital, these countries offer a combination of established demand and a fragmented landscape of operators, creating opportunities for consolidation and professionalization. The platform will partner with established local operators to leverage their market knowledge while introducing advanced management techniques.
Emphasis on Modernization and ESG
A key part of the strategy involves upgrading the acquired facilities. This includes implementing modern digital booking systems to improve customer experience and optimizing revenue management through data analytics.
Furthermore, the platform has a strong focus on Environmental, Social, and Governance (ESG) principles. Planned enhancements include the integration of sustainable features like solar panels on facility roofs and the implementation of energy-efficient designs. This approach is designed to meet the growing demand from institutional investors for responsible and sustainable investment vehicles.
Favorable Market Conditions and Performance
The launch comes at a time when the self-storage sector is showing robust health. Recent industry reports indicate that global self-storage vacancy rates are low, hovering below 8%. In many developed markets, rental growth in the sector has outpaced the consumer price index (CPI), providing a natural hedge against inflation.
During the economic slowdown from 2022 to 2024, self-storage assets delivered net yields between 7% and 9%, outperforming broader commercial real estate indices by approximately 300 basis points, according to data from Schroders.
The European market, estimated to be worth over €20 billion, is particularly attractive. Self-storage penetration in Europe remains significantly lower than in the United States, where it is a major real estate asset class. This gap suggests substantial room for growth as awareness and adoption increase across the continent.
The platform is structured to appeal to institutional investors like pension funds, insurance companies, and family offices. The debut fund, named SchroStorage Europe I, has already secured 30% of its initial target from investors in the Nordic region and the UK, signaling strong market confidence in the strategy.
Leadership and Future Outlook
The new initiative will be led by a team of experienced real estate professionals. Elena Vasquez, who previously served as the head of European logistics at a major Real Estate Investment Trust (REIT), has been appointed to head operations. Her 15 years of experience in asset repositioning are expected to be crucial for executing the platform's value-add strategy.
"This launch is a natural evolution of our operational real estate ethos. In a world of flux, self-storage stands as a beacon of stability, and we’re excited to steward capital into this high-conviction space."
Looking ahead, Schroders Capital sees this platform as a scalable model. While the immediate focus is on Europe, the firm is exploring potential expansion into the more mature U.S. market and high-growth Asia-Pacific (APAC) regions by 2027.
By combining a resilient asset class with active management and a commitment to sustainability, Schroders Capital aims to provide its clients with a compelling investment opportunity that offers both diversification and dependable returns in an unpredictable global economy.
