June 18 2024 14:30
Stor-Age Property Reit achieved revenue growth of 14.7% in the financial year to the end of March 2024. The group earned R1.2bn in this period, up steadily from what it achieved in the financial year to the end of March 2023.
Rising demand for self-storage space was met by new properties opening across the real estate investment trust (Reit)’s portoflio.
Stor-Age is SA’s only specialist self-storage real estate investment trust and has been listed on the JSE for nearly nine years. Its portfolio includes 103 properties, with 60 in SA and 43 in the UK, and it provides storage to around 52 000 customers. The combined value of its portfolio, including properties managed in joint venture partnerships, was R17.3bn at March 31 2024. The South African assets were worth R6.0bn while the British assets were worth £471m at March 31 2024. The maximum lettable area, including the company’s development pipeline and ongoing projects, exceeded 650 000m². Stor-Age employs more than 480 staff across SA and the UK. Stor-Age has been listed on the JSE since November 2015.
Gavin Lucas, Stor-Age CEO
CEO Gavin Lucas said the group delivered a strong performance.
“We are pleased with our robust performance in the 2024 financial year, driven by gains in occupancy, rental rates and strategic expansions. While SA demonstrated exceptional growth, the UK performance was steady and resilient, after three incredibly strong years. Our excellent strategic, financial and operational position in both markets remains intact. Looking ahead, we continue to focus on growth opportunities while maintaining a conservative capital structure,” he said.
Since Stor-Age listed on the JSE in 2015, its property portfolio has grown from 24 properties to 103, and the value of the portfolio, including properties managed in joint venture partnerships, has increased from R1.3bn to R17.3bn, Lucas said.
The company focuses on driving an increase in both rental income and occupancy across the portfolio. Total occupancy across both markets increased by 10 700m2 during the year.
In South Africa, same-store rental income increased 12.7% year-on-year and occupancy in the portfolio grew 8 700m2 compared with the prior year.
In the UK, average rental rates increased 4.7% and while the average occupancy over the period was 1.6% lower, occupancy at year end was up 2 000m2.
Stor-Age Edenvale
Stor-Age opened or acquired 12 trading properties in the reporting period, with four in SA and eight in the UK. In South Africa this included properties in Bryanston and Morningside in Johannesburg, and in Paarden Eiland and Pinelands in Cape Town. In the UK, the company bought a four store Easistore portfolio in the south east of England, and completed the developments of properties in Bath, Heathrow, West Bromwich and Canterbury. Each of these properties was acquired or developed in joint venture partnerships with institutional and private equity partners.
“We continue to work with our existing join venture partners, and engage with new partners, to consider opportunities for future acquisition, development and redevelopment. This allows us to allocate capital across a number of opportunities, and to mitigate the financial impact of the lease-up. We remain confident that the long-term return profile on invested capital through our joint venture partnerships will be value-accretive as new developments lease up to mature occupancy levels,” said Lucas.
Stor-Age Berea
The company’s third-party management offering also grew. A total of 23 properties are operating on this platform, 17 of which are in the UK. This includes a three-property portfolio in Kent, in the southeast of England, which was acquired post year end by Hines, a privately owned global real estate investment, development and management firm with a presence in 30 countries and $94.6bn of assets under management.
“The management contract concluded with Hines in May this year 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.
This third-party offering allowed the company to generate additional revenue with minimal capital investment by leveraging its operating infrastructure.
Stor-Age expanded its solar PV roll-out strategy across its South African and UK portfolios. To date, the company has invested R63.5m in renewable energy, generating more than 6.0-million kWh of solar power. As much as 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.
Stor-Age expects its distributable income per share to be between 122 cents and 126 cents for the 2025 financial year.
alistair@propertyflash.co.za
