This fund manager wants to spend billions on outdoor storage
Global investment manager Realterm has snapped up its third industrial outdoor storage site in western Sydney within a year as part of ambitious plans to create a multi-billion dollar portfolio of this emerging asset class.
Realterm, which manages over $US12 billion ($19.2 billion) of industrial assets, partnered with Swiss-based Partners Group to acquire the site in Glendenning for $33 million late last year, boosting the value of the joint venture’s holdings to more than $120 million.
Industrial outdoor storage – large open space that can house trucks, construction equipment and large parcel containers – is an emerging niche in commercial property that has experienced a surge in demand across the US and Europe due to the ecommerce boom.
According to a 2024 PwC Investor Survey, the overall industrial outdoor storage market is a $US200 billion market ($321 billion), with over US$1.7 billion in institutional capital raised in the past year.
According to Realterm Australia investment head Charlotte Brabant, the investment manager was just getting started in buying up industrial outdoor storage locally due to its investors – primarily foreign pension funds and sovereign wealth funds – being convinced that the assets are mission-critical to companies like Amazon that deliver parcels.
She expected Realterm’s Australian portfolio to eventually grow to the same size as its European portfolio, which was created in 2020 and has since grown to be worth about $1.2 billion.
“Billions and billions [of dollars] is where we see the capacity and where we see the opportunity for us. But we won’t be putting a particular number to that,” Ms Brabant said.
“In America, Realterm has four value-add funds, and it will be looking to capital-raise for their fifth next year. It also has a very large core fund, and the largest air cargo fund in North America which is worth several billion dollars. In Europe, we’re opening up a second value-add fund … it’s anticipated that our Australia operations will follow the same trajectory.”
Ms Brabant said the fundamentals behind its acquisitions, which she said would provide strong returns, were limited supply, tenants historically securing long-term leases, and high rental growth.
The investment manager would be looking at sites located on the eastern seaboard that could be turned into truck terminals, drayage yards and also last-mile parcel delivery locations, she said.
Realterm’s Australian operations are being led by Ms Brabant and Toni Ryan, who both formerly worked at Blackstone-owned 151 Property, where they managed real estate investments.
Realterm entered the Australian market in January last year with the $62 million purchase of 77 Governor Macquarie Drive, Chipping Norton, a near-42,000 square metre industrial outdoor storage facility in Sydney’s south-west.
It then followed that with the acquisition of another industrial outdoor storage facility in Fairfield, also in Sydney’s south-west, for $28 million two months before securing the Glendenning facility.
That facility spans 9000 square metres. It also has access to major transport linkages and immediate proximity to the M7 Motorway, and is close to domestic and global occupiers such as Endeavour Energy, Motospecs, Greens General Foods, Cleanaway, Amazon and Infrabuild.
Colliers’ Gavin Bishop, Michael Crombie, Trent Gallagher and Sean Thomson brokered the Glendenning outdoor storage facility’s sale.
