Stor-Age sees another year of portfolio expansion and solid returns

Stor-Age is the leading owner of self-storage units in South Africa and also operates in the UK. Picture: Supplied

Stor-Age is the leading owner of self-storage units in South Africa and also operates in the UK. Picture: Supplied

Published Jun 19, 2024


Stor-Age, the JSE-listed self-storage property fund operating in South Africa and the UK, reported occupancy gains, rental rate and other expansions in the year to March 31, including the addition of 12 properties to its portfolio.

CEO Gavin Lucas said that while South Africa demonstrated exceptional growth, the UK performance was steady and resilient, after three strong years.

A final dividend of 56.81 cents was declared, bringing the total dividend to 118.17c, which although barely changed from 118.14c last year, brought the total return to 13.3% for the year considering distributions and net tangible asset value growth per share gains.

“Looking ahead, we continue to focus on growth opportunities while maintaining a conservative capital structure,” he said at the release of the results yesterday.

Since Stor-Age listed on the JSE in 2015, its portfolio has grown from 24 properties to 103, and the value, including properties in joint venture partnerships, increased to R17.3 billion from R1.3bn.

The company has focused on increasing rental income and occupancy. Total occupancy across both markets increased by 10 700 square metres during the year, while rental income grew by 14.8%.

In South Africa, same-store rental income increased by 12.7% year-on-year and occupancy in the portfolio grew by 8 700 square metres compared to the prior year.

In the UK, despite a transitioning environment of high interest rates and inflation pressures, the trading performance was resilient. Average rental rates increased 4.7%, and while average occupancy was 1.6% lower, occupancy at year end was up 2 000 square metres.

The company opened or acquired 12 trading properties, four in South Africa and eight in the UK, adding 72 500 square metres of gross lettable area on full fit-out.

In South Africa this included in Bryanston and Morningside in Johannesburg, and in Paarden Eiland and Pinelands in Cape Town.

In the UK, the four-store Easistore portfolio in south-east England was acquired, while developments in Bath, Heathrow, West Bromwich and Canterbury were completed. These were acquired or developed in joint venture (JV) partnerships with institutional and private equity partners.

“We continue to work with our JV partners, and engage with new partners, to consider acquisition, development and redevelopment opportunities. This allows us to allocate capital across a number of opportunities, and to mitigate the financial impact of the lease-up.”

Another focus was the growth of the third-party management offering. Twenty-three properties were operating on this platform, 17 in the UK.

This included a three-property portfolio in Kent, south-east of England, which was acquired post year-end by Hines, a privately owned global real estate firm operating in 30 countries and with $94.6bn of assets under management.

“The management contract with Hines supports the high regard with which Storage King is regarded in the UK self-storage market, reaffirming the high quality and sophistication of our operating platform,” said Lucas.

Stor-Age further expanded its solar PV roll-out strategy across the South Africa and UK portfolios. To date, the company has invested R63.5 million into renewable energy, generating over 6 million kWh of solar power.

Currently, 58% of the portfolio has solar capacity, helping it achieve a 19% reduction in its total scope 1, 2 and 3 carbon footprint during the year.