Land Deals

CPAS · Mar 20, 2019

Evening all.
This is my first post here, so please point me in the right direction if this post is in the wrong forum.

Im looking to open a self storage site; open storage/container storage and I'm trying to get a guage on the whole land deal side of things. I'm very familiar with the property market in the UK but it transpires a that almost none of this is transferable to acquiring commercial land.

I'm looking for B8 land, or something suitable for that classification.
Location isn't to important geographically. I'll consider nationwide opportunities.
Location also isn't to critical on a macro level. Anywhere within half an hour of a reasonable population center is worth considering.
I would like to purchase the land if the right opportunity arises other wise I would be happy to lease with an option.

Where I'm struggling is with the following.
Finding opportunities - I'm searching the portals and talking to commercial agents (who aren't very helpful towards the little guy)
Understanding what I should expect to pay for land either purchase or rent. For example, 2 simingly very similar sites have very different price tags.
Understanding what options are out there for financing the acquisition of the land. I seem to be able to secure finance fairly easily but at a 55% LTV it is making it harder to find land that works.

I would really appreciate it if any of the UKBF bods can point me in the direction of useful reading, offer any advice or put me in contact with anyone who can assist me.

Thanks

Chris

Stedurham · Mar 21, 2019

What sort of storage are you thinking about, this is something im literally looking into as we speak and its a little harder than I imagined

WaveJumper · Mar 21, 2019

Yes hard to get your foot in the door with the larger commercial property companies. I was actually searching the net last night myself, was checking out Right Move and then believe it or not came across quite a selection on Ebay of all places good luck with your quest

Gordon - Commercial Finance · Mar 22, 2019

CPAS said:
Understanding what options are out there for financing the acquisition of the land. I seem to be able to secure finance fairly easily but at a 55% LTV it is making it harder to find land that works.

There are options for financing land up to 75% LTV, sometimes more.
Do you plan to build any kind of facility on the site, or are you just looking to drop a stack of containers out? Either way, how are you planning to fund the build or the purchase of the containers?

Financial-Modeller · Mar 22, 2019

CPAS said:
Evening all.
This is my first post here, so please point me in the right direction if this post is in the wrong forum.

Im looking to open a self storage site; open storage/container storage and I'm trying to get a guage on the whole land deal side of things. I'm very familiar with the property market in the UK but it transpires a that almost none of this is transferable to acquiring commercial land.

I'm looking for B8 land, or something suitable for that classification.
Location isn't to important geographically. I'll consider nationwide opportunities.
Location also isn't to critical on a macro level. Anywhere within half an hour of a reasonable population center is worth considering.
I would like to purchase the land if the right opportunity arises other wise I would be happy to lease with an option.

Where I'm struggling is with the following.
Finding opportunities - I'm searching the portals and talking to commercial agents (who aren't very helpful towards the little guy)
Understanding what I should expect to pay for land either purchase or rent. For example, 2 simingly very similar sites have very different price tags.
Understanding what options are out there for financing the acquisition of the land. I seem to be able to secure finance fairly easily but at a 55% LTV it is making it harder to find land that works.

I would really appreciate it if any of the UKBF bods can point me in the direction of useful reading, offer any advice or put me in contact with anyone who can assist me.

Thanks

Chris

Auctions.

Mr D · Mar 22, 2019

Gordon - Commercial Finance said:
There are options for financing land up to 75% LTV, sometimes more.
Do you plan to build any kind of facility on the site, or are you just looking to drop a stack of containers out? Either way, how are you planning to fund the build or the purchase of the containers?

Plus once a site is purchased, needs security. Fence, gate, some method of preventing people just coming in and nicking stuff / driving off with containers. Cameras, lights, keycard access maybe. A security firm watching CCTV as needed.
A storage site can compete with others on security. Store contents of your house in an unsecure container (locks are easy)…..?

CPAS · Mar 23, 2019

Thanks for the replies, everyone.

@Stedurham - I'm looking for land to set up a container storage facility and land; obviously, the critical factor is the bit I'm struggling with. Feel free to drop me a message if you want to bounce ideas.

@WaveJumper - thanks, I'll check eBay, I hadn't even considered looking there!

@Gordon - Commercial Finance - I think I could work with 75% LTV depending on the deal of course. I have approx £40k to put towards the land. As above, it will just be containers on site. I have made arrangements for a lease-purchase agreement with a supplier for the containers and will be looking to fund the startup cost as outlined by @Mr D as well as providing some cash reserves via a bank loan. If there are any issues securing conventional finance then the business plan looks good to secure investment from an angel for a % return or equity share.

@Mr D, I have put a lot of planning it to the infrastructure and it will definitely compete with the big yellow type warehouses. I've personally been using container storage for almost 10 years across numerous sites so I'm familiar with the setup and have found ways to improve the offering and create a value proposition.

@Financial-Modeller - can you suggest ant auction houses to look at? Is it just the usual suspects for property auctions; SDL in my neck of the woods?

Thanks all

Chris

Financial-Modeller · Mar 25, 2019

CPAS said:
Thanks for the replies, everyone.

@Financial-Modeller - can you suggest ant auction houses to look at? Is it just the usual suspects for property auctions; SDL in my neck of the woods?

Chris

Try Allsop who have online presence across UK, but obviously look for local auctioneers too.

The Byre · Mar 25, 2019

Buying property is all about getting your butt out there! Yes, you should be looking at the online sites, but you also have to schlepp around the grottier industrial estates and talk to people. Anywhere where there is a scrapyard seems to be the sort of place you might start with first.

Stedurham · Mar 26, 2019

See above I found some land but by the time you get it to the standard you want gates all the wat around containers cctv, electric gates with key fobs etc, the cost for the site didn't make sense and check with council, similar to car traders they don't seem to like the idea

CPAS · Apr 1, 2019

Thanks for the further pointers. I will find some time to go and scour the local trading estates for anything. It is looking like to get site number one up and running it may be best to look at the rental options which isn't the long term model and does present me with the problem of re-housing 100 shipping containers at great expense at the end of the lease if the landlord wants us gone.
For those of you with experience in this area, how common is it to find somewhere to lease with an option to buy?

@Stedurham I have fully costed everything out and can finance the startup costs. You missed levelling the ground which is fundamental and can be very expensive in hardcore and trucking, I had a quote from one company in the realms of £25k to level a 1-acre site... that's bonkers and have had better quotes now but still a biggie.
To your point of the cost not making sense, I would view anything like perimeter fencing, levelling, infrastructure and security in the same way that a loft conversion adds value to your home. The sites that are all ready to go are commanding far higher prices than the ones that need work so it's by no means money down the drain.

I have had fairly positive responses from local councils, the key is undoubtedly though to find land which is already B8 classified. They are very unlikely to provide consent for greenfield sites to be used for storage and distribution at the moment. What objections were raised during your research?

Thanks,

Chris

CPAS · Apr 1, 2019

I would also be very interested in getting you knowledgable peoples thoughts on the merits of buying the land vs renting the land. I have obviously made my own conclusions here but being a bit green on the whole thing I would very much value anyone's input on this front.

The Byre · Apr 1, 2019

Buy freehold - always!

Someone somewhere is desperate for your money - you just have to find that person!

Right now, with the dog's breakfast that the government is making of the economy, there are a lot of desperate people out there and property prices are falling.

Read this lot - https://www.ukbusinessforums.co.uk/articles/is-the-pursuit-of-equity-a-better-business-model.925/

Mark T Jones · Apr 1, 2019

Mr D said:
Plus once a site is purchased, needs security. Fence, gate, some method of preventing people just coming in and nicking stuff / driving off with containers. Cameras, lights, keycard access maybe.

All good stuff for leasing

Mr D · Apr 1, 2019

Mark T Jones said:
All good stuff for leasing

You probably won't be surprised that some people think a mesh fence and a couple of lights is enough to protect a site. Oh and a padlock on the gate with every user having a key to use and not everyone locking up...

CPAS · Apr 2, 2019

The Byre said:
Buy freehold - always!

Someone somewhere is desperate for your money - you just have to find that person!

Right now, with the dog's breakfast that the government is making of the economy, there are a lot of desperate people out there and property prices are falling.

Read this lot -

Thanks for the article. I have been hunting all over the country for a good site at the right price on freehold but I guess the answer is to keep hunting and something will come up eventually.

The spanner in the works for buying freehold in this scenario is that because there is no bricks and mortar and no intent to develop I don't appear to be able to get a commercial mortgage. I will keep digging though.

CPAS · Apr 2, 2019

@Mr D I won't be making that mistake!

Financial-Modeller · Apr 2, 2019

Looking at this from a different angle, you're struggling to find a site that can be kitted out / developed / secured etc to provide self storage facilities, at a cost that you can afford/manage without debt, which may not be available for a land purchase.

Why not buy a site with a building already on it (with a commercial mortgage), and sub-divide to provide self-storage facilities?

As warehouse space has moved out of town towards motorways etc, there is plenty of older warehousing space around the UK that logistics companies don't want because its in towns, which would be perfect for your purposes - look at sites that Big Yellow et al are taking.

CPAS · Apr 2, 2019

I have considered the option of providing carved up warehouse space and I've got an eye on the market but its actually quite a different business when you drill down into the details.

Thanks for the pointers all, I will keep my eye out for opportunities and pounce when something comes up.

Root 66 Woodshop · Apr 2, 2019

If you need any help with information and direction on security products just ask

I do Master Keying, keying alike and building restricted key products all day long, along with site surveys for CCTV, Access Control, alarms, fire alarms, monitoring servicing etc etc.

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