Property Flash


Stor-Age Reit performed superbly well in the 12 month period to end-August 2022, despite challenges in an ever weakening South African economy and some uncertainty in the UK economy. Stor-Age is invested in both.

CEO Gavin Lucas said the group was highly resilient. It has become the largest self storage property fund in SA and is the only storage group listed on the JSE.

Across a portfolio of 85 trading properties in SA and the UK, Stor-Age delivered growth in occupied space of 57 600m² year-on-year, while at the same time, it achieved increases in its average rental rate of 6.7% in SA and 10.8% in the UK year-on-year.

In SA, total occupied space including new developments and acquired trading properties, increased by 28 700m² year-on-year. The growth in closing occupancy included 9 200m² in the same-store portfolio, 9 700m² of gains at the newly opened Tyger Valley and Cresta properties, as well as a further 9 800m² of gains at the recently acquired Silver Park and Green Cube properties in Cape Town.

In the UK, total occupied space, including acquired trading properties, increased by 28 900m² year on year, with the growth including 28 400m² of gains from the recently acquired McCarthy’s Storage World and Storagebase portfolios.

“We are pleased to once again report another set of positive trading results. The self storage sector in South Africa and the UK continues to benefit from structural tailwinds, evidencing itself at the property level in the form of high levels of demand,” said Lucas.

He said self storage was one of the few commercial property sub-sectors that was well-placed to navigate a high inflationary environment.

“Despite our average length of stay of approximately two years for customers still storing with us, the short nature of our leasing cycle with new leases entered into monthly, provides the sector with the opportunity to adjust its pricing in near real-time,” he said.

“For those operators with a sophisticated and dynamic revenue management model such as Stor-Age, it provides us with an opportunity to be very defensive relative to our peers across the broader commercial property market,” Lucas said.

His company has excelled as a darling of the listed property sector. It is managing to expand and retain customers even as the state of SA’s economy worsens. Unemployment is rising despite the city of Johannesburg falling apart, for example. Streets are not being improved, there is a lack of water pipe maintenance and the city battles to retain new businesses, given electricity loadshedding. This prompts skilled people to leave for Cape Town or to seek work in other countries.

Stor-Age had a large development pipeline in place. At 31 March 2022, the pipeline in both markets included fourteen properties, which will add more than an estimated 80 000m² gross lettable area on completion. This is split between ten properties in SA, at an approximate total development cost of R900m and an estimated 60 000m² gross lettable area, and four properties in the UK, at an approximate total development cost of £45m and an estimated 20 000m² gross lettable area.

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