Hong Kong-based premium self-storage provider RedBox Storage Limited (RedBox) has acquired three properties in the city after deploying a sum of $50 million committed by Chinese real estate investment manager InfraRed NF.
In a statement, InfraRed, which acquired a 90 per cent stake in RedBox after the investment, said the self-storage provider has completed three property purchases in Yau Tong, Tuen Mun, and Tsuen Wan districts.
The acquisitions expand RedBox’s gross floor area (GFA) by 116 per cent, making it the fourth largest self-storage operator in Hong Kong in terms of GFA, InfraRed said.
The most recent purchase by RedBox, under InfraRed NF’s ownership, involved the eight consecutive floors in the uppermost levels of the Metropolitan Industrial Building in Tsuen Wan district. The purchase of the floors included the acquisition of the self-storage business of Canaan Mini Storage Company Limited, which operates from the site.
Self-storage is one of the fastest growing asset classes in alternative real-estate, according to InfraRed NF and RedBox.
Supply in Hong Kong, however, is limited as self-storage per capita in the city is only 0.6 square feet, compared to other developed markets such as New York (3.4 sq ft) and Sydney (1.9 sq ft).
According to a CBRE research note, there was a shortfall of 200,000 sq ft of self-storage stock in Hong Kong in 2015.
“Self-storage in Hong Kong continues to show significant growth potential with smaller residential unit sizes, higher income levels and an increasingly consumption-driven society driving the sector,” said InfraRed NF CEO Stuart Jackson.
He said InfraRed NL will deploy further capital to further support the expansion plans of RedBox in Hong Kong.
InfraRed NL acquired RedBox in April 2018 as part of its plan to create a “market-leading self-storage platform” in Hong Kong through a series of direct property acquisitions.
RedBox is InfraRed NF’s second investment in the self-storage market after it invested $28 million in China Mini Storage, an intelligent technology-led self-storage operator in China, in 2017.
Founded in 2014 by E3 Capital Partners, RedBox claims to be one of the market leaders in Hong Kong in terms of security and strategically located sites that are being designed for fire safety.
“The support of InfraRed NF has allowed us to expand the portfolio as we continue to deliver bespoke and flexible storage solutions for our customers,” said RedBox CEO Simon Tyrrell.