JSE REIT Stor-Age has recently closed an accelerated bookbuild.
The significantly oversubscribed bookbuild saw R250 million of equity raised at a price of R11.85 per share, representing a 4.3% discount to the 30-day volume weighted average traded price. The capital raised will allow Stor-Age to continue taking advantage of development and acquisition opportunities in both South Africa and the United Kingdom.
Comments Stor-Age CEO Gavin Lucas, “We are pleased with the significant appetite shown for Stor-Age stock and believe it is a strong vote of confidence in the business and its strategy. These are certainly very challenging times for all South African businesses and the local REIT sector has been under significant pressure for some time. When taking this into consideration, it certainly does put the success of today’s raise into perspective.”
Adds Lucas, “Stor-Age and the self storage business model have a track record of resilience in constrained economic environments. While there is little doubt about the pending significant contraction in the economy in both SA and the UK, the primary drivers of demand for our product are life-changing events and / or dislocation, be they positive or negative in nature. Demand is further supported by the fluctuation of economic conditions. Our customers typically require the product either temporarily or permanently for various reasons throughout the economic cycle. This creates a market depth that is a significant contributing factor towards the resilience of the self storage product.”
Stor-Age is well positioned to benefit in the medium to long-term from the rapid acceleration of change brought about by the current crisis: “Stor-Age entered the current cycle from a position of strength and we continue to benefit from a high quality property portfolio spread across both SA and the UK, a very well-managed balance sheet and deep sector specialisation.”
Subject to approval by the JSE Limited, listing and trading of the Bookbuild Shares is expected to commence at 09h00 on Tuesday, 26 May 2020.