Stor-Age, the JSE-listed self storage specialist REIT, has announced continued strong results for the six months to September 2017 and declared a dividend for the fourth consecutive period of 47.02 cents per share. As the largest self storage fund in South Africa, Stor-Age has maintained organic growth in earnings and in the underlying portfolio while also expanding locally and into the UK. The REIT has amassed a portfolio valued at R3.6 billion and effectively tripled its market capitalisation to approximately R3.5 billion over the past two years.
CEO Gavin Lucas explains that the recession-resilient nature of self storage provides the REIT with a distinct advantage in down cycles.
Taking into account the period’s key acquisitions of Storage RSA and Unit Self Storage, rental income increased by 46% to R110 million. The closing rental rate of R88 per m2 grew 10% from this time last year.
Stor-Age to mitigate development and lease-up risk by acquiring the completed asset off-plan from a developer, at a pre-determined price based on objective criteria, with a rental guarantee underpin for the forecast lease-up. This “Certificate of Practical Completion” CPC development model is based on the proven US self storage REIT structures.
International Expansion
On 2 November 2017 the group strategically entered the growing UK self storage market by acquiring Storage King, a top 10 UK self storage operator, bringing on board 13 high quality properties in England. Lucas pointed out that while a significant portion of Stor-Age’s underlying earnings will now be Sterling-denominated, the company remains a primarily South African-focused REIT, based here and with earnings weighted to local properties for the foreseeable future.
Subject to stable macro conditions, Stor-Age is forecasting an 11-12% rise in the full year dividend.
