2. Contents
04 The UK Self-Storage Market
07 Market Analysis
08 The Store First Business Model
09 Store First Differentiators
09 The Investment Opportunity
10 Return on Investment
11 Exit Routes and Liabilities
11 Security for the Investor
12 SIPP Compliance
12 Costs or Deductions
13 Table of Costs and Return
14 Purchase Process
15 Termination and Early Exit
16 Ownership Structure
16 Investor Payments
16 Tax Considerations
17 FAQs
19 Company Details
3. The UK Self-Storage Market Analysis
Self-Storage was first established in the UK in the 1980’s, initially
in the London area. The industry continues to grow steadily in the
UK in terms of rental income according to the 2012 annual survey
of the Self Storage Association compiled by Drivers Jonas Deloitte.
References from the “Survey” are contained in this report.
The Survey is the sixth Consecutive Report charting the progress of
According to the 2012 Survey, just over one third of customers are
the industry. 87 separate companies took part representing over 50%
renting space whilst moving house and there is a growing market
of the 815 self-storage sites in the UK. A total of 436 storage facilities
amongst those carrying out house improvements, which is itself an
were covered by the Survey. The Survey states that it changes its
increasing market given the slow housing market. The Survey suggests
questions each year to ensure that it captures an accurate picture of
that these will turn into long term customers and account for about 10%
the state of play of the industry in general but at the same time its core
of demand.
questions remain the same to establish accurate trends and provide a
good like for like comparison.
A further third of customers are businesses, and the Survey considers
that results indicate that these business customers are becoming
In the last 2 years, Store First Limited has acquired and developed 15
increasingly important. They are taking an increasing share of space
substantial purpose-built self-storage buildings.
and occupy for longer, a trend recognized by Store First.
Whilst the Survey shows a number of operators refinancing debt,
Store First is securing several more sites with an aim of acquiring
Big Yellow is reported to have arranged a £100m loan over 15 years
and developing 50 centre’s within the next 5 years as from 2012.
at 4.9% and Safestore are reported to have refinanced to a tune
of £400m at a rate of 5.5%, ALL of Store First’s sites are FREE of
At a population of 62m, the UK provides only 0.5 Sq/ft of storage per
mortgage/debt. Our Investors can take a considerable degree of
person. This compares to 7.4 Sq/ft per person in the USA.
comfort therefore that Store First Limited’s business model (unlike that
of much larger competitors) is not vulnerable to interest rate changes
In addition to the encouraging information contained in the Self Storage
or the whims of Banks. To use the finance industry jargon, Store First
Association (SSA) 2012 Survey there is another useful document to
Limited is not subject to “gearing” or “leverage” in the same way as a
consider in the form of the Royal Institute of British Architects report first
company funded by debt would be.
published in September 2011 entitled ‘The Call for Space’.
It is also relevant to note the fact that as Safestore and Big Yellow have
Whilst a cynical view might be that the SSA’s Surveys may, to some
been able to arrange such finance demonstrates the interest which
extent, be self-serving for the sector, this could not be said to be the case
long term Investors have in the storage market and in the cash flow
for the Royal Institute of British Architects (RIBA).
generated by the service.
The RIBA report states that existing research suggests that consumers
The Survey results show that from 2006 the rents achieved in self-
are right to be worried that new-build homes just are not big enough.
storage have risen a cumulative 7.3% whilst rents in the Retail,
Research found that residents in private homes did not have enough
Industrial and Office sectors have all fallen by about 5%.
space to store their possessions. 57% said there was not enough
storage for their possessions.
The Survey also shows average occupancy rates amongst mature
facilities to have risen from 68% to 70% and up to 75% in London. The
This trend in modern house building, whilst unfortunate for the residents
Survey states that it is clear that the health of the storage sector does not
involved, can only be good news for the self-storage industry as more
depend on the volume of house transactions in the UK. Revenues have
and more people turn to self-storage to solve this problem.
continued to rise since 2007 (albeit more gradually) whereas house
purchase numbers have effectively halved.
With the apparent need for storage by ordinary households, plus the
needs of small businesses, and even national concerns such as British
Gas, Store First Limited is confident that its product will be in constant
demand by the end-user.
4
Store First Ltd 2013 | Due Diligence
4. Furthermore, such is Store First’s confidence in the product that it will
Of course, the Investors are not obliged to rent out their storage pods.
arrange to rent the pods from the Investor with a rental return guaranteed
They are free to use the pods themselves (restrictions apply to SIPP
for the first two years at 8% per year. The income which the Investor
Investors) and whilst Store First is happy to supply a comprehensive
enjoys, therefore, is earned from day one.
management/letting service, each Investor is entirely free either to
self-manage or employ any management agent of his choice. By
The government’s decision to impose
VAT on self-storage facilities has brought
widespread consternation to the industry
as a whole but is actually GOOD news
for Store First Investors!
doing so he would not incur any management or “arrangement” fee
from Store First.
Whilst the rental levels and facilities are important selling advantages
for attracting tenants, the Investor also enjoys an advantage rarely
afforded in this sort of investment.
The Store First product is a solid tangible commercial property. It
comes firmly within HMRC’s definition of what is suitable for SIPP
The large players all derive an income from the rental of storage
investment and carries with it the benefit of having its own registrable
space which vastly exceeds the annual threshold requiring VAT
title at the UK Land Registry. Each Investor will be able to visit his
to be paid but under the Store First business model, for the vast
storage centre, view his storage pod(s) and experience first hand,
majority of Store First Investors, that threshold will not be reached.
the facilities available. They will be able to do what he likes with the
The current threshold of £77,000 as of January 2013, would mean
storepods. They can rent them out, use them themself, sell them,
that an individual Investor would need to own over £500,000 worth
leave them empty and make whatever management arrangements
of storepods to be required to charge VAT, and this assumes a 12%
he wants. They will be truly in control of their investment product.
return net of costs at current levels.
Store First Investors already had the competitive edge by being able
to rent out their storepods at substantially less than the leading players
and even less than the national average, but when the VAT element is
added Store First’s advantage becomes clear.
According to the Survey the national average rent for 25 Sq/ft is £526.50
per annum whereas a Store First Investor can offer facilities equal to or
superior to its competitors for £425.00 per annum and this is BEFORE
the competitors have to add VAT. Once VAT is added at 20%, the
national average figure based on the above example rises to £631.80
per annum whereas Store First stays at £425.00 per annum (subject to
the VAT threshold limit not being exceeded).
This makes Store First rentals a staggering 32% cheaper than the
national average giving the Store First Investor what must surely be an
unassailable market advantage over rival storage firms.
But cheapness of rental is not the only selling point. The second is the
very high fit-out specification that Store First has brought to its storage
facilities and continues to improve. Store First offers its storage users
perks and benefits which one would never normally have expected.
These include: office facilities, catering facilities, conference rooms
and free Wi-Fi as well as the facilities you would also expect such as
manned reception areas, 24 hours security/access and supplies. The
current generation of storage buildings will even be equipped with gyms.
Store First is confident that these factors will make its facilities the
natural choice for the storage end-user and in turn will provide healthy
investment returns for its Investors.
Store First Ltd 2013 | Due Diligence
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5. Our Locations...
1
2
3
4
5
6
7
8
11
9
10
Barnsley x1
Blackburn x3
Burnley x2
Ellesmere Port x1
Glasgow x1
Leeds x1
Liverpool x2
Rochdale x2
Preston x1
Wakefield x1
Store First sites under option:
11
Aberdeen
12
Bath
13
Birmingham
14
Bristol
15
Cardiff
16
Coventry
17
Durham
18
Edinburgh
19
Gloucester
20
Lancaster
21
Leicester
22
London
23
Manchester
24
Norwich
25
Watford
5
18
17
As of December 2012
20
3
2
9
6
10
8
1
23
7
4
21
24
13
16
19
25
15
14
12
22
6. Further Market Analysis
The annual survey reports large Self-Storage PLC’s have reported
to their Investors a fast growing industry with great confidence for
the future.
Market Penetration
Regional Market Penetration
There is an estimated 815 Self-Storage Stores in the UK, giving the UK
market 29.6m sqft letable space. The industry in the UK has a turnover of
around £350m+ PA, with around 400 different operators, with over 2000
employees.
Of the total number of facilities in the UK, 320 are held by large operators,
40% are controlled by the national players (10 or more stores) the
remaining 60% are controlled by the smaller operators. Store First is one
Midlands
& Wales
14%
of those national players with 15 centres and a further 10 in completion.
In April 2012, Big Yellow announced it had arranged a £100m loan
over a 15 year term. Furthermore in May 2012, Safestore announced
the refinancing and increase of its facilities to £400m. Safestores
comprehensive 400m refinancing replaces 385m pounds of debt that
14%
28%
were due to expire in August 2017 with new facilities maturities staggered
from 2016 to 2024 and over a blended all in cost of debt at 5.5% per
annum. This demonstrates the interest long term Investors have in the
industry and in the cash flow generated by the service. On the other hand,
23%
Store First are in the privileged position to confirm they are 100% debt
free from any loans.
Northen
England
23%
& Scotland
35%
The US has an average of 22.5 self-storage stores per one million
people, the UK has an average of 13 Stores per one million people, the
Netherlands have about 11 stores per million people and Denmark and
Sweden have around 7 stores per million people. In comparison to the
US, there is still an awful lot of growth to be seen across the UK and
Europe.
Rental growth throughout the industry in the UK has continued to rise
since 2007. This shows that the market does not depend on the housing
London
28%
South
35%
market due to the fact that revenues keep rising but house sales have
fallen by half.
Facts & Figures
•
Business customers are up 3% from 36% last year, to 39% now.
•
Business customers now stay an average of 61 weeks, previously
56 weeks.
•
All operators are confident that revenues will increase dramatically
next year.
•
Average facility is £40k sq/ft, larger facilities are around £60k, Store
First facilities would be classed as large facilities.
•
Occupancy levels are looking very healthy throughout the industry;
they are up 2% on last year from 68% to 70%. In the north there has
been an average of 4% increase.
•
Revenue has largely risen across the industry by over 17%.
Information provided from the Self Storage Association Annual Survey 2012
Store First Ltd 2013 | Due Diligence
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7. The Store First Business Model
The Store First business model guarantees we stand out from the
crowd; our values, ethics and commitment have helped develop
the business model to be the highest standard available within the
industry.
Store First Make a Difference
Dedicated to continue to provide the very best infrastructure and
support we are fast becoming an exemplary business that is the envy
of our competitors.
Store First have centres open and under construction in the
following locations:
Centurion Business Park, Blackburn x3
Empire Business Park, Burnley x2
Estuary Business Park, Liverpool x2
Crown Business Park, Rochdale x2
Ashroyd Business Park, Barnsley x1
Cheshire Oaks, Ellesmere Port x1
Millennium City Park, Preston x1
Freeway Park, Wakefield x1
Linwood Road, Glasgow x1
Leeds x1
Store First sites under option:
Aberdeen, Bath, Birmingham, Bristol, Cardiff, Coventry, Durham,
Edinburgh, Gloucester, Lancaster, Leicester, London, Manchester,
Norwich and Watford.
Store First are focused where levels of market penetration are lower
and higher levels of growth are projected.
Each facility is purpose built and will offer the following sizes of
Storepods:
25 sq ft,
75 sq ft,
150 sq ft,
35 sq ft,
100 sq ft,
175 sq ft,
50 sq ft,
125 sq ft,
200 sq ft,
(Some small quantities of varying sizes are produced within different
Store First Sites but the above are the most popular sizes).
The sites are located on vibrant office and commercial business
parks, within easy access to motorway links and within short driving
distance of major conurbations. All of the sites have maximum vision
to large traffic flow from either motorways or large main roads. All
centres are located in highly populated areas.
Tenants pay one month’s rent as a deposit and one month’s rent up
front. Rent is then collected monthly by direct debit or card payment.
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Store First Ltd 2013 | Due Diligence
Store First Liverpool Centre
8. Store First Differentiators
The Investment Opportunity
There are a number of differentiators in the market for end users
Investors purchase a long-leasehold (approx. 250 years
that separate Store First from their competition:
depending on the site) on a storage pod, then may enter into a 6
year agreement to sub-let their Storepods to Store First Limited.
Store First Management Limited will then sublet the storepod(s),
under licence, to end users.
All of the sites will have office facilities, breakout areas,
Investors receive a discount of 25% off current RICS commercial
packaging facilities, van hire, goods pick up service, forklift
•
Store First offer their storage space at least 32% cheaper
than the national average.
•
property valuations of their self-storage pod(s).
truck facility and reception areas.
•
Every site has 24 hour digital CCTV and a state of the art
alarm system installed. Coded electric gates, perimeter
security fencing, smoke detectors and fire alarms are fitted
Summary terms of agreement:
•
guaranteed for the first two years, predicted to rise to 10% in
as standard to protect customer’s belongings.
•
Tenants have the use of a PO Box Address along with private
meeting rooms, office space, free Wi-Fi, and in and out
bound mail services - Free of charge.
years 3 and 4 and 12 % in years 5 and 6.
Points to note
•
•
Risk assessments are conducted in conjunction with the fire
Store First pay Investors a fixed rental return of 8%
Investors can choose to exit the lease and opt for a variable
rate of return instead.
service and local authorities.
•
Store First have partnered with Allianz insurance to provide
cover for tenants’ contents.
Investment Levels
Investment levels start at £3,750 for 25 Sq/ft. As a commercial
This amounts to a comprehensive service at a lower cost than
their competitors which appeals to private individuals and small
business.
property investment, Store First has been accepted by major
SIPP providers, and in 2012 over £68m worth of sales have
already been processed. The average investment now excceds
£60k per client.
Price Comparisons
All of the below are prices per week for storage space in the North
West and are correct as of December 2012:
Size (sq ft)
Store First
Lok’n Store
Big Yellow
SafeStore
P/W P/W P/W
P/W
25
£8.17
£16.00 +VAT
£19.80 +VAT
£23.70 +VAT
35
£12.00
£19.00 +VAT
£28.20 +VAT
£28.80 +VAT
50
£17.00
£26.00 +VAT
£39.30 +VAT
£36.60 +VAT
75
£25.00
£34.00 +VAT
£48.60 +VAT
£47.40 +VAT
100
£33.00
£40.00 +VAT
£57.90 +VAT
£58.80 +VAT
125
£41.00
£50.00 +VAT
£69.00 +VAT
£69.00 +VAT
150
£49.00
£60.00 +VAT
£72.00 +VAT
£82.00 +VAT
200
£66.00
£80.00 +VAT
£87.00 +VAT
£102.00 +VAT
Totals
760 £251.17 £325.00 +VAT £421.80 +VAT £448.30 +VAT
Store First are more cost effective by:
22% +VAT 40% +VAT 44% +VAT
The national average rental rate according to the Self Storage Association 2012 Annual Survey is £10.13 per 25 sq/ft per week (£526.50 per
annum). These figures rise to £12.16 per week and £631.80 per annum when VAT is added. It can be seen therefore that Store First figures of
£8.17 per week and £425 per annum show a substantial financial advantage over its competitors.
Store First Ltd 2013 | Due Diligence
9
9. Return on Investment
The following examples are for illustration purposes and are
based on the minimum initial investment of £3,750. Our typical
investment amount now exceeds £60,000 per client.
Income
Initial Investment
£3,750
Year 1 @ 8%
£300
Year 2 @ 8%
£300
Year 3 @ 10%
£385
Year 4 @ 10%
£385
Year 5 onwards @ 12%
£470
*All figures are NET of costs.
Capital Growth
The rent per square foot paid to Investors by Store First Management
Limited is anticipated to grow from gross rents of £17 per Sq/ft in
years 1&2, to £21 per Sq/ft in years 3&4, to £25 per Sq/ft in years
5&6.
Based on the Capital Value being 8.8 times rental yield in years 3&4
the Storepod will be worth £4,620 and in years 5&6 £5,500.
Income Return
This gives a forecast NET income return of £2,310 over 6 years,
or 61%.
Store First Limited plan to have all of their sites at 80% occupancy
within two years, giving them revenue from three income streams:
•
Service charges
•
Management charges
•
Sales of other products such as packaging, gloves, tape and
boxes. Sales of these products can contribute as much as 25%
of the total revenue of a storage site.
This gives Store First a large margin of comfort to pay Storepod
owners their fixed rental payments and the fact that the agreement
between Store First Limited and the Storepod owners contains
upwards only rental reviews is an indication of their confidence in
their business model.
*Year 1 & 2 are fixed, years 3 onwards are forecast returns and depend whether the lease
continues, returns could vary.
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Store First Ltd 2013 | Due Diligence
Store First Blackburn Centre
10. Exit Routes
Security for the Investor
This investment has a flexible exit achieved by sale of the
•
Storepod(s). Store First Limited will help market your Storepod(s).
There are three possible markets:
Resale to another Investor
•
A Storepod with a proven rental track record will be an attractive
policy from Allianz Insurance a subsidiary of Lloyds of London.
•
•
This is a UK investment covered by UK regulations and UK law.
•
The rental returns of 8% NET of costs are guaranteed for the
first two years.
•
•
Many tenants who let the Storepods on long term deals will
The property is registrable in the Investor’s name on a single title
deed at the UK Land Registry.
investment for other Investors looking to purchase income.
Resale to owner occupiers
The buildings are covered by a fully comprehensive insurance
In a worst case scenario, if Store First or Store First Management
were to cease trading, the Investor would still be the owner of
the Storepod(s) – a valuable asset. The Investor’s rights to
access and use the Storepod(s) would still continue.
welcome the opportunity to purchase rather than rent their
Storepod as this will reduce their overheads, secure an
appreciating asset for their business and bring tax benefits.
Buy-Back
•
In year 5, Investors may ask Store First to buy the Storepod(s)
back off the Investor for the original price paid within the
following 5 years (conditions apply).
•
If the Investor is a SIPP and the beneficiary of the SIPP dies
before year 5 then the SIPP may ask Store First to buy back
the Storepod(s). (conditions apply).
Responsibilities and Liabilities
Store First Management Limited it is responsible for:
•
Refurbishment
•
Ongoing maintenance and upkeep
•
Steps to prevent any theft, vandalism or criminal damage
•
Utility bills
•
Insurance
•
Contracting with the end users
•
Servicing the end users
•
Collection of rent and collection of bad debt
•
Marketing the facilities
Tenants must not use the Storepods for any illegal activity. Store
First Management Limited is responsible to ensure reasonable
steps are taken to prevent illegal activity.
Investors are responsible for business rates, however at the
moment it is believed that the storepods rateable value is currently
well below the threshold where they become liable for business
rates. Rating revaluations are undertaken on a five yearly basis and
the last revaluation came into effect on April 1 2010. More details
can be found on: www.businesslink.gov.uk
Store First Ltd 2013 | Due Diligence
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11. SIPP Compliance
As a commercial property investment Store First is SIPP compliant
and accepted by major SIPP providers.
SIPP Investment
Her Majesty’s Revenue & Customs in the UK states certain types of
(5) The Treasury may by order provide that arrangements do not
investment which are suitable for inclusion in self-invested pension
amount to a collective investment scheme:-
plans (SIPPs). Immovable commercial property containing no
(a) in specified circumstances; or
residential element is suitable for SIPP investment.
The storage pods are immovable commercial property containing no
element of residence.
In 2012 £68 million’s worth of storage
units have already been acquired from
Store First Limited by SIPPs operating
out of several different SIPP providers.
(b) if the arrangements fall within a specified category of arrangement.
Each Investor’s investment exists independently of other Investors’
investments. There is no interdependency imposed on Investors.
Each has its own Title Document. There is no pooling of Investors’
investments and there is no imposition of an overall management
structure on the storepods.
The documentation of the set-up has been submitted to Legal
Counsel for an opinion as to whether it amounts to an unregulated
collective investment scheme. Counsel has confirmed that the
documented set-up neither is, nor forms part of, such a scheme.
Markets Act 2000
Sometimes the question crops up: is this an unregulated collective
investment scheme? This is governed by the Financial Service and
Costs or Deductions
Investors pay all of their costs out of the rental income they receive.
Sections 235 of the Act states:- 235.
Un-tenanted Charges
(1) In this Part “collective investment scheme” means any
When the Storepod(s) is not tenanted the owner is responsible for
arrangements with respect to property of any description, including
a small ground rent based on the size of the unit. Ground rent is
money, the purpose or effect of which is to enable persons taking
payable annually.
part in the arrangements (whether by becoming owners of the
property or any part of it or otherwise) to participate in or receive
profits or income arising from the acquisition, holding, management
or disposal of the property or sums paid out of such profits or income.
(2) The arrangements must be such that the persons who are to
participate (“participants”) do not have day-to-day control over the
management of the property, whether or not they have the right to be
Tenanted Charges
When the Investor chooses to employ Store First Management
Limited as manager the Investor is responsible for an additional
15% management charge. A service charge of £1.95 per Sq/ft is also
payable. These will be deducted from the monthly rental payments.
consulted or to give directions.
Note that if Investors find and service their own tenants for their
(3) The arrangements must also have either or both of the following
Storepod(s), the 15% management charge does not apply.
characteristics:(a) the contributions of the participants and the profits or income out
of which payments are to be made to them are pooled;
(b) the property is managed as a whole by or on behalf of the
operator of the scheme.
(4) If arrangements provide for such pooling as is mentioned in
subsection 3a in relation to separate parts of the property, the
arrangements are not to be regarded as constituting a single
collective investment scheme unless the participants are entitled to
exchange rights in one part for rights in another.
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Store First Ltd 2013 | Due Diligence
All of the returns that have been quoted
in the marketing literature are net of
these charges.
12. Table of Costs and Revenues
Property Type
(Store First Ltd)
Size Sq/Ft
(per Storepod)
Sale Price Rental Income Ground Rental Management Fee Service Charge Net Rental Return
(per Storepod)
(£17 per Sq/Ft)
(per annum)
(15% per annum)
(£1.95 per Sq/Ft)
(8% for Years 1&2)
Storepod 25
£3,750 £425 £12.50 £63.75
£48.75 £300.00
Storepod 35 £5,250
£595 £17.50 £89.25 £68.25 £420.00
Storepod 50
£7,500 £850 £25.00 £127.50 £97.50 £600.00
Storepod 75
£11,250 £1,275 £37.50 £191.25 £146.25 £900.00
Storepod 100
£15,000 £1,700 £50.00 £255.00 £195.00 £1,200.00
Storepod 125
£18,750 £2,125 £62.50 £318.75 £243.75 £1,500.00
Storepod 150
£22,500 £2,550 £75.00 £382.50 £292.50 £1,800.00
Storepod 175
£26,250 £2,975 £87.50 £446.25 £341.25 £2,100.00
Storepod 200
£30,000 £3,400 £100.00 £510.00 £390.00 £2,400.00
Store First Ltd General Sizes Sale Price Gross Income Cost once let
Cost once let
Cost once let
Net Income
*(based on years 1&2 @ 8%, full details are in the sales brochure)
Store First Ltd 2013 | Due Diligence
13
13. Purchase Process
Cash Investors
A client completing a cash investment pays a deposit of 10%.
SIPP Investors
No deposit is required. Prospective Investors will receive full details
of the purchase and reservation form prior to completion.
Upon completion, a contract pack will be sent outlining confirmation
of the purchase along with important contact numbers for future
reference.
Use of Funds
Investor’s funds are transferred on completion and are used purely
to purchase the asset. They are not used to fund other activities or
go to any third parties.
Solicitors
Store First’s preferred solicitor for Investors is The Hetherington
Partnership Solicitors. They have completed many sales of
Storepods and as they are familiar with the product they are quick
and efficient. Their charge is £400+VAT+services and disbursements
per contract (note that multiple Storepods can be purchased on one
contract, so this represents excellent value). Charges may be higher
for overseas Investor.
Margaret Hetherington
The Hetherington Partnership Solicitors
32 Market Street
Hoylake Wirral
Merseyside
CH47 2AF
Tel +44 (0)151 632 3411
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Store First Ltd 2013 | Due Diligence
Store First Burnley Centre
14. Termination and Early Exit
The Title Document
There is no fixed term for the investment. The Investor may sell at
Each Investor will receive a document evidencing its title to the storage
any time.
pod(s) they are buying. This will usually be in the form of a long lease
of 250 years (approx.) registrable at the UK Land Registry.
All Investors may ask Store First Limited to buy back the Storepod(s)
after 5 years.
This document will contain a full description of the storage pod(s) and
the Investor’s rights and responsibilities. If Store First Limited went
If the Investor is a SIPP and the beneficiary of the SIPP dies within
into liquidation after the sale to the Investor had been completed, the
the first 5 years, the SIPP may ask Store First Limited to buy back
Investor’s ownership of the storage pod(s) it has purchased would
on death.
remain intact. The Title Document would remain valid. The Investor’s
right to access and use the storage pod(s) would remain valid.
The lease-back to Store First Management Limited (if taken up) is for
6 years but can be broken by either the Investor or Store First after 2
The Investor is free to sell, mortgage and rent out the storage pod(s)
years or after 4 years.
(or employ them for its own use, subject to the legal status of the
Investor) as it thinks fit. If the Investor has required Store First Limited
The Investor is free to sell their Storepod(s) to a third party even
to take a lease back then the Investor can sell with the benefit of that
though the 6 year lease may still be running. The buyer simply takes
lease. The ownership of the storage pod(s) can be passed down to
on the benefit of what remains of the lease.
future generations subject to the status of the Investor.
Legal Considerations, Ownership
and Regulations
Upon completion the Investor will own the chosen Storepod Property.
The Investor will have a single title deed in his name registrable at
the Land Registry. Store First’s solicitors will complete the purchase
and liaise directly with the Investor or their solicitor. Multiple Storepods
can be purchased using one Land Registry title deed to save on
completion costs.
The Contract
The contract is governed by UK Law and is enforceable in the courts
The Lease Back
The Investor can insist that Store First Limited takes a lease of the
storage pod(s) (via Store First Management Limited). This guarantees
rent for the first two years at a return rate of 8%.
The Lease lasts 6 years. Both the Investor and Store First Limited can
call for the lease to be ended on the second and fourth anniversaries.
The Buy-Back Option
The Investor may ask Store First Limited to buy back the storage
pod(s) after five years (subject to conditions). If Store First Limited
does so it will pay to the Investor the same price as the Investor paid.
of England and Wales.
The Re-Sale Option
It legally binds Store First Limited to sell to the Investor the Storepods
The Investor may ask Store First Limited to sell their Storage pod(s)on
they are buying by way of long-lease.
It documents the Investor’s right to call for Store First Limited to take
a lease back (as Store First Management Limited) if the Investor
wishes.
their behalf at any time (subject to a 5% resale fee). Store First Limited
will market the Storage pod(s) at a minimum 25% above the initial
purchase price to potential owner occupiers, business storage users
and other Investors. Many storage pod resales have already taken
place giving a minimum 25% gross profit back to the Investor.
Management/Letting
The Investor is entirely free to choose its own manager or manage the
Storepod(s) themselves.
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15. Ownership Structure
Store First Limited
Owns the Freehold
to the site
Investor
Purchases the storepod on a
long leasehold (typically 250
years) from Store First Limited
Store First
Management
Limited
Manage the Storepod from
the Investor on an initial
6 year lease, and rent it
out to end users
Disclaimer
Tax Considerations
Store First are not authorised to give investment/tax advice and you
The rental yield and capital gains should be treated the same as
should seek independent financial and legal advice on all information
any other commercial property investment however everybody’s tax
included in this document prior to making any investment decision.
situation is unique and it is recommended that Investors seek their
All forecasts are based on historical performance and are purely
own independent expert advice on taxation.
indicative.
The value of your property may rise or fall. No guarantees as to
future performance in respect of income or capital growth are given
either expressly or by implication and nothing expressed or implied
should be taken as a forecast of future performance.
This is not an offer to participate in a collective investment scheme
as defined in the Financial Services and Markets Act 2000 (section
235) and as such buyers have no access to statutory or regulatory
protections including the Financial Ombudsman Service and
the Financial Services Compensation Scheme. Store First is not
regulated by the FSA and is not authorised to offer advice to the
general public concerning any regulated or unregulated investment.
Although every care has been taken to make sure that the information
in this brochure is accurate, Store First Limited cannot accept any
responsibility for mistakes or omissions. You should take your own
professional advice before taking or refraining from any action based
on the contents of this brochure which are only intended as a general
outline to the matters referred to in it.
All content is under copyright and remains the property of Store First
Limited unless otherwise agreed. Storepod is a copyrighted product
of Store First Limited.
Investor Payments
Investors will receive their rental yield payments paid directly into
their bank account or SIPP by direct debit.
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Store First Ltd 2013 | Due Diligence
16. FAQs
What is my exit route?
There are a number of potential exit routes. One great advantage of
Storepods is that there are no restrictions on sale. They can be sold
on the open market. Subject to the Investor’s SIPP’s rules, one exit is
simply to sell some or all of the storage pods.
This route can be made more secure by using Store First Limited’s BuyBack scheme. After owning the Storepod(s) for 5 years the Investor can
ask Store First Limited to buy-back at the original purchase price. If the
Investor is a SIPP and if the SIPP’s beneficiary dies then the death of the
SIPP beneficiary can also trigger this buy-back option. Conditions apply
and full details are set out in the Buy Back Agreement.
Is there a real market in the sale of
Storepods?
Store First Limited has now been trading for over 2 years and has already
bought back and resold on a voluntary basis a number of Storepods.
Am I tied to using a particular manager?
No. The Investor can self-manage or appoint their own. There are no
financial penalties or charges for doing so.
What if the manager/owner of the site
goes bust? What happens to my pod(s)?
The potential insolvency of the site manager or the site owner does
not end the Investor’s ownership of their Storepod(s). They still have
full access to them for rental or self-use under the terms of the lease.
They still own the lease and still own the Storepod(s), a valuable
asset.
Am I obliged to rent out my Storepod(s)?
No. If the Investor is a SIPP then rules apply which affect persons
connected to the SIPP using the Storepods and the SIPP provider
will elaborate on these but subject to those rules Store First Limited
imposes no obligation on the Investor as to how the Storepod(s) are
to be used.
How do I know that I will receive my
promised returns?
Store First Limited sets aside the first 2 years’ rent for every Storepod
sold (assuming the Investor wants to take advantage of the lease-
Store First Rochdale Centre
back arrangement).
What testing has there been to prove that
Store First Limited’s forecasted returns
are likely to be accurate?
The beauty of the Store First model is its simplicity. The return is
not dependent on external factors (such as the performance of the
How do I know that Store First Limited
owns its sites free of mortgage?
This can be verified quite simply by the Land Registry. Each site has
its own Land Registry title number. A search at the Land Registry will
reveal no mortgage registered against the relevant site.
company or a third party) as would be the case of investing in the
Stock Exchange. The return is simply the rent.
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17.
18. Company Details:
Store First Limited
Business First Centre
Empire Way
Burnley
Lancashire
United Kingdom
BB12 6HH
Company No. 07463355
Investment
Telephone: +44 (0)1282 330 330
info@storefirst.co.uk
www.storefirst.co.uk
Store First Limited’s intention is to build the company to be one
of the top players in the UK self-storage market by using a similar
blueprint as many other large PLC self-storage companies, but
with an improved business model and aggressive profit driven
marketing strategy. Store First offer flexible and affordable storage
solutions for both domestic and commercial clients. Example target
markets include down sizing and expanding companies that need
more space and private individuals who are moving home and need
a short-term storage package.
Store First Management Limited
Business First Centre
Empire Way
Burnley
Lancashire
United Kingdom
BB12 6HH
Company No. 07160642
Rental
Telephone: 0800 84 99 777
info@storefirst.com
www.storefirst.com
Store First Management Limited is the letting agent and site operator
for Store First Limited’s Storepods. Store First Management is
responsible for the marketing and letting of the Storepods, ensuring
that they are maintained and servicing the tenants.
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