An affiliate of QuadReal Property Group will pay approximately $474 million to acquire a 95-per-cent interest in 26 United Kingdom self-storage properties from Padlock Euro Storage Fund, marking a major expansion in the storage sector for the B.C-based investor.

QuadReal will indirectly acquire the portfolio via a subsidiary to be known as QR CS Padlock LP, according to the transaction announcement. Affiliates of the Canadian fund’s existing manager and members of its management team will continue to hold an indirect five per cent stake.

The transaction values the portfolio at £270 million, or approximately C$499 million (based on a conversion rate of approximately $1.85).

Padlock is registered in Ontario, but has been owned by affiliates of Phoenix-based Clear Sky Capital Inc., and its properties have all been in the United Kingdom. The properties have been operating under the Cinch Self Storage brand.

"Under Clear Sky's management, the fund, including its predecessors, has assembled a sizable portfolio of high-quality self-storage assets, which allowed us to identify QuadReal as a buyer," said Iyngaran Muniandy, Padlock’s chief executive officer, in the announcement. "The sale of the properties is a compelling opportunity for fund unitholders to realize on their investments and achieve liquidity in the fund. 

“We are proud of being able to execute a transaction of this nature in what is currently a difficult U.K. property market."

The amount QuadReal ends up paying for the properties could be adjusted related to several factors prior to close, including planning conditions around one of the properties, known as Chippenham South, outside Bristol.

The Padlock fund merger and markets

The announcement by Padlock also notes two mitigating factors:

• first, the fund’s stated strategy for its limited term to expire in July; and
• second, that the transaction is the result of an extended negotiation with QuadReal, in challenging market conditions for the storage sector within the U.K. It states: “Conditions for sale transactions in the real estate market in the regions where the fund operates are generally unfavourable at this time…."

In May, the current iteration of the fund was created when sister fund Padlock Euro Storage Fund I acquired the assets of the Padlock Partners UK Fund IV. As a result, all 25 of the self-storage assets aggregating 1,025,094 square feet moved under singular management and Fund IV was dissolved.

Properties in the portfolio are located in four primary U.K. markets, and include assets in the communities of Bicester, Letchworth, Leighton Buzzard, Wimbledon, Chippenham, Enfield, Huntingdon, Brentwood, Newmarket, Houghton Regis, Brighton, Watford, Woking, Southend-on-Sea, Seaford, Gillingham, Mitcham, Sittingbourne, Wisbech, Swindon, Edmonton, Haverhill, Newbury, Chippenham, Sidcup and Ashford.

CIBC World Markets Inc. is the financial advisor to the fund in connection with the transaction. Blair Franklin is financial advisor to the independent trustees and has provided a fairness opinion. Blake, Cassels & Graydon LLP is Canadian counsel to the fund and Gowlings WLG (UK) LLP is U.K. counsel to the fund. Wildeboer Dellelce LLP is counsel to the independent trustees. 

QuadReal and it self-storage involvement

This marks the second major storage acquisition for QuadReal in 2025. It entered the Canadian self-storage sector in May with the acquisition of Maple Leaf Self Storage, a Vancouver-based company which owned and operated a half-billion-dollar network of 15 facilities in British Columbia and Alberta.

Maple Leaf had previously been owned by Vancouver-based Larco Investments.

QuadReal listed its global portfolio as including over 17,000 storage units and 1.7 million square feet of space on its website.

QuadReal is a global investor based in Vancouver involved in development, real estate ownership and property management across a wide range of commercial and residential sectors. It has 15 global offices, employs approximately 1,900 people and has approximately $94 billion in assets under management.

It is wholly owned by the British Columbia Investment Management Corporation and acts as BCI’s real estate investment arm.