Information Memorandum for Insurance Broking And Risk Manage

KENNARDS SELF STORAGE

Investment Performance As discussed above market activity more recently has generally focussed around the REITs. Smaller owner operators, which comprise the majority of facility owners, are not as active. A key feature of the current market is that a number of transactions comprise ‘off-market’ purchases.

The below depicts the number of analysed sales and total sales volume within the sector over the past five years.

Measure

2015

2016

2017

2018

2019

Total Sales Volume

$132,135,000

$461,385,000

$155,023,000

$267,885,000

$280,725,000

Analysed Transactions

13

21

17

29

22

Self-Storage - Sales Analysis

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000

8.50%

8.00%

7.50%

7.00%

6.50%

6.00%

2015

2016

2017

2018

2019

Total Sales Volume

Average Adjusted Yield

Calendar Year

Source: Colliers International

The majority of transactions are “off market” purchasers and typically contain strict confidentiality agreements in place, further complicating the already difficult task of obtaining factual trading details of each transaction. Notwithstanding, our investigations reveal that yields have compressed over the last 12-18 months and yields currently generally range from 6.00% - 7.00%. Facilities with high occupancy levels, established trading history and which are well located in metropolitan areas, remain highly sought-after and attract stronger yields. COVID-19 Impact The outbreak of the Novel Coronavirus (COVID-19), declared by the World Health Organisation as a “Global Pandemic” on 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries. Market activity is being impacted in many sectors. At this point in time, we consider that we can attach less weight to previous market evidence for comparison purposes to inform opinions of value. Indeed, the current response to COVID- 19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Information Memorandum Kennards Self Storage June 2020 6