June 19 2023
Stor-Age Property Reit, the only specialised personal storage landlord listed on the JSE, rewarded its shareholders with a higher dividend for the year to end-March 2023, as demand for its product offering soared.
The group which listed in 2015 and is now worth R6.4bn declared a 5.6% higher year-on-year total dividend of 118.14c. This was in line with its growth forecast of between 5% and 6% growth for its payout to investors.
Stor-Age owns a portfolio which includes 93 properties, 57 in SA and 36 in the UK, worth R12.9bn. The gross lettable area of its these assets is 620,000m². The group serves 49,000 customers. CEO Gavin Lucas said that six developments were set to be completed by Stor-Age in its March-end 2024 financial year, with three in SA and three in the UK.
Luicas said St6or-Age had proved that its business model was resilient and adaptable which meant the group could provide attractive returns during different economic cycles.
“Demand is underpinned by life-changing events and dislocation, whether positive or negative, and customers use our product for various reasons across economic cycles. Positive structural trends accelerated by the pandemic continue to bolster demand,” the company said.
Some people would rent out storage space because they needed to keep their camping goods and other holiday equipment out of their homes when not away on holiday. At the other end of the market, people needed to store goods when they moved home following divorce, a death in the family or a loss of income because their job changed.
While SA’s socioeconomic circumstances are well documented, the UK also faced its own array of challenges, including persistent double-digit inflation and domestic political drama, which unsettled financial markets, according to Stor-Age, and yet the company still managed to achieve healthy metrics including strong occupancies.
“Though not immune to economic shocks and volatility, the self-storage sector has displayed remarkable resilience in coping with economic stresses, as evidenced during the global financial crisis and the Covid-19 pandemic,” it added.
Stor-Age’s rental income rose 17.3% to R1.07bn and its net property operating income climbed 15.3% to R790.6m as portfolio occupancies improved to 92.2% in SA and 85.4% in the UK.
Despite these strong numbers, the company’s share price fell 3.56% to R13.
Stor-Age’s board expected to deliver a dividend of between 115c and 121c in 2024. the group was likely to maintain its 100% payout ratio amid a volatile macroeconomic environment if load-shedding remained mostly below level 4 and interest rates rose by no more than 50 basis points in SA and 25 basis points in the UK.
“Looking ahead to the 2024 financial year, it becomes even more challenging to predict the economic landscape and the potential macroeconomic and geopolitical outcomes that may affect customer demand and behaviour,” Stor-Age said.
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