Equity Becomes Leader in Brazil Self-Storage Market with $58M Investment
- Feb 16, 2011
February 16, 2011
By Barbra Murray, Contributing Editor
The self-storage sector in Brazil is just beginning to blossom, and Equity International is moving in. With a $58 million investment in GuardeAqui, the top self-storage company in the country, Equity International becomes a leader in the market overnight.
GuardeAqui became Brazil’s first self-storage operating concern in 2006 and today, with three facilities encompassing 248,000 square feet of leasable space in the metropolitan Sao Paulo areas of Lapa, Liberdade and Santo Amaro, the company dominates the market, providing temporary and long-term storage for both commercial and residential clients. “GuardeAqui was the first product in Brazil to mirror the fourth generation U.S. product; it was the first company to bring that style of self-storage to Brazil,” David Blum, industry consultant and president of Blum Management Services Group, told CPE.
Blum served as a consultant to GuardeAqui when the company was planning its debut in the country. “For about seven years before GuardeAqui got started, there was self-storage but it was a first generation type product. They were not near major thoroughfares, they were difficult to identify and understand,” he said.
Equity International, a known player in the investment in and creation of world-class companies beyond U.S. borders, is well aware of the opportunities Brazil’s self-storage market offers. Equity CEO Gary Garrabrant said that the investment represents opportunity in one of Brazil’s most promising real estate sectors.
Expansion plans are on tap for GuardeAqui throughout Brazil, where, as Garrabrant remarked, there is a growth spurt in the middle class population.
“Self-storage has caught on a lot in Brazil,” Blum said “There were 12 facilities there five years ago and now there are 50. It’s a slow growth but a continued growth.”
Despite an increasing demand for the product, making more supply available is not as easiily orchestrated as it is in the States. “It’s a very challenging market to develop in,” Blum added. “Even though the population is becoming more aware of self-storage, the government is not entirely aware of this development class. It poses additional building obstacles with them not being familiar with this type of product.”
But it’s not just red tape that presents hurdles to developing self-storage properties, he said. “The cost of land has grown astronomically.”