Brookfield, GIC offer record $2.6 billion for Australia's National Storage

By Rajasik Mukherjee and John Biju

Nov 26 (Reuters) - Australia's National Storage REIT NSR.AX said on Wednesday it had received a A$4.02 billion ($2.61 billion) buyout offer from a consortium of Brookfield BAM.N and Singapore's GIC in what would be the country’s biggest real estate privatisation deal.

The consortium offered National Storage shareholders A$2.86 in cash per share, a 26.5% premium to Tuesday's closing price.

If the deal goes through, it would be the biggest take-private deal of a real-estate company in Australia, eclipsing Brookfield's own A$1.27 billion acquisition of Aveo Group in 2019.

"This bid is a massive vote of confidence in the Australian sector and a clever move from Brookfield," said David Tuckwell, chief investment officer at ETF Shares.

"Demand for NSR is deeply non-cyclical...It is driven by life events like moving, downsizing, or relationship changes."

Founded in 1995, National Storage provides self-storage to approximately 94,500 residential and commercial customers at more than 270 locations across Australia and New Zealand, according to its website.

Australia's largest self-storage provider also attracted interest from private equity firm Warburg Pincus and U.S.-based Public Storage PSA.N in 2020, while a consortium led by South African billionaire Nathan Kirsh and Public Storage bid A$2.17 billion for local rival Abacus Storage King ASK.AX earlier this year, although neither resulted in a deal.

National Storage has around a 10% stake in Abacus and Tuckwell sees it as a "crucial" piece of the puzzle.

"It gives Brookfield a strategic foothold that effectively blocks other global players from easily sweeping in. It's like buying a seat at the table for any future consolidation activity."

Trading in National Storage's shares was halted pending the announcement, before the stock jumped 19.5% to A$2.70 in the final settlements after market close, LSEG data showed.

The firm has agreed to provide exclusive due diligence access to the consortium until December 7.

($1 = 1.5380 Australian dollars)