Stor-Age, JSE Reit and South Africa’s largest self-storage property fund, maintained a robust financial and operational performance for the six months to September, with an interim dividend up by 2.2% to 61.36 cents a share, and its development pipeline is full.
The board forecast the full-year dividend per share to be about 118 to 122 cents for the 2024 financial year, CEO Gavin Lucas said yesterday.
Stor-Age has a record of acquiring, developing and managing self-storage properties. Over five years, it opened 12 new properties (nine in South Africa; three in the UK) and acquired 24 existing properties (four in South Africa; twenty in the UK), collectively adding more than 190 000 square metres of lettable area.
The group said yesterday that the current development pipeline equated to more than 66 000 square metres of lettable area, with 17 active projects at various stages of completion.
Each of the six new properties that opened in the first half of the current year were completed in joint venture (JV0 structures with the Moorfield Group (UK) and Nedbank (SA).
Early trading at these new properties had been “very promising”, said Lucas.
Two new UK developments in the Moorfield JV were scheduled to open in the second half of the 2024 financial year.
The £82 million (R1.9 billion) acquisition of the four-property Easistore portfolio in the UK in April this year through a joint venture with Nuveen Real Estate, in which Stor-Age holds a 10% equity interest, was completed.
This acquisition provided further opportunities for growth in the UK. In recent weeks, Stor-Age exchanged contracts for a new development site in Leyton in the Nuveen JV.
The total capital committed in Stor-Age’s JV partnerships (including developments in progress and pipeline opportunities) exceeded R5.5bn.
“Our JV partnerships with leading institutional and private equity partners in both markets, which are an important component of our growth strategy, allows us to achieve growth and scale in South Africa and the UK while providing an attractive return on invested capital. These partnerships allow us to participate in acquisitions and developments in prime locations with strong demographics, offering future upside with a moderate capital investment,” said Lucas.
The company made further progress with its UK REIT status. This month, the requirements to elect to classify the Storage King group of companies as a UK REIT were satisfied.
In the past six months rental income and net property operating income increased 17.0% and 15.7% respectively.
Same-store average rental rate increased 9.6% SA and 5.1% UK. Net property value was by 4.5% to R10.87 billion compared to March 2023. The loan-to-value ratio was at 31.9%, with more than 75% of net debt subject to interest rate hedging.
“Stor-Age has delivered a remarkable operating performance in South Africa over the past 12 months, alongside a resilient performance in the UK. We expanded our portfolio, opening six new properties (four in South Africa and two in the UK) and increased the combined value of the portfolio, including properties managed in our JV partnerships, to R16.2bn,” Lucas said.
In South Africa, same-store occupancy increased by 9 900m², finishing at 90.7%. Closing occupancy in the UK portfolio reached 83.9%.
Stor-Age’s share price increased 2.28% to R12.20 on the JSE yesterday afternoon, slightly lower than the R13.69 it traded at on the same day a year before.
BUSINESS REPORT