The Big Orange Self Storage Fund, a fund specializing in the Hong Kong and Singapore self storage market, was sold to Invista Real Estate Management in April of this year. Invista, an international real estate management company operating in the United Kingdom, Europe, and Asia, bought the Big Orange Self Storage Fund from the Australian investment house, Babcock & Brown.
Now Invista has received a $42.7 million investment from an American institutional investor, which it plans to invest in Big Orange. The new investment in Big Orange shows investor confidence in the Asian self storage market, which is beginning to heat up. In November, Inside Self Storage reported on the rising demand for self-storage space in Japan, a country where 127 million people live on an area of land that is smaller than the state of California. Singapore has a similar demand for storage space -- it is about 3.5 times the size of Washington, D.C. and has a population of alm
ost five million.
Big Orange was established in 2006 to focus on the Asian self storage market. Many self storage investors are finding the Singapore market to be robust. In November, Hersing Corporation of Singapore, which owns the first self storage facility to open in Singapore (StorHub), reported that its 2009 third quarter profits were quadrupled over its profits from the third quarter of 2008. Not all of Hersing's profits came from StorHub -- many came from the Asia-Pacific branch of ERA Real Estate, which saw a 58 percent revenue increase during the same period -- but Hersing noted that the StorHub Self Storage business had proven to be very recession-resilient.
ExtraSpace, as well, has facilities in Singapore. (In fact, the Extra Space Singapore facilities have several specials going on to celebrate the year's end, including a 25% discount on small to medium units at Extra Space Boon Keng Road, and 30% off walk-in wine cellars or 15% off a wine locker at Extra Space Eunos.)
In Singapore, the demand for self storage is in large part driven by the demand for specialty storage such as wine cellars. According to Dr. N.K. Yong, the wine columnist for The Business Times, Singapore may be turning into the wine hub of Southeast Asia. Self storage companies like Extra Space are catering to private Singapore wine collectors, who are happily taking advantage of the fact that the import duty on wine in Singapore is only $9 per litre, compared to 37% of the bottle's cost in Hong Kong and 240% of the bottle's cost in Thailand. "People can store their wines with confidence," says Yong in a 2007 Business Times column. "Originally, wine companies had some extra storage space, so they capitalised by renting it out to existing clients. Now that they are running out of space at home, more individuals are using these storage facilities -- it all points to the increasing number of wine collectors in Singapore."
The advantage to keeping a wine collection in storage, rather than at home -- aside from the fact that the collection takes up space -- is that self storage wine cellars have a carefully controlled temperature and humidity level. Self storage wine cellars in Singapore are kept at about 12 degrees Celsius (54 degrees Fahrenheit) and 75% humidity. Today, December 21, the temperature outside in Singapore was 23 degrees Celsius (73 degrees Fahrenheit) at its coolest, with 94% humidity. Self storage facilities can provide a much more controlled environment in which to store wines than the average Singapore homeowner can.