September 7 2026 09:15
Stor-Age Property Reit gaining control of Xtraspace’s Western Cape portfolio and operations would make competition near impossible in the province.
The company which is the only storage provider listed on the JSE, in August announced that it was in the process of buying a portfolio of 10 self-storage properties from private group Xtraspace Properties for R387m, alongside a management agreement for Xtraspace’s other six sites in the Western Cape. The deals lift Stor-Age’s South African footprint to 80 properties with some 500,000m² of gross lettable area. This will make the group not only the dominant storage operator in Gauteng but also in the Western Cape.
While Stor-Age’s growth story has impressed, the company has not faced sophisticated competition.
Brothers Gavin and Stephen Lucas and their university friend Steve Horton formed the Stor-Age group in 2006. The three chartered accountants took a gamble on entering the self-storage sector if real estate. There were very few companies and private individuals who owned and operated formal storage space. Instead, South Africans had access to makeshift space which was often unused garages that were being rented out. A difference between SA and markets abroad was that South Africans were used to being able to buy multi-room homes with cupboard space and gardens. People in London, New York and Berlin were more likely to stay in densely populated apartment blocks and store goods at industrial warehouses. Storage operators were prevalent in these markets.
Stor-Age launched with a property in Edgemead, Cape Town. The company was listed nine years later in November 2015 as a real estate investment trust (Reit). Since then, the company has expanded across SA and bought Storage King in the UK and tried its hand in that saturated market. While this has happened, new private entrants have entered the market, but Stor-Age has remained the largest and most advanced player in the game. Listed landlords have considered investing in the property type in the past but it requires certain operating software and procedures as well as maintenance and security. Growthpoint even considered buying Stor-Age around when it listed. JSE-listed SA Corporate Real Estate invested in a business called Storage Genie which it later exited.
Enter Inospace, an entrepreneurial group which owns industrial business parks and has recently entered the self-storage market. Given the company’s strong track record of success, there is confidence that it can make a meaningful and lucrative investment in self-storage for its customers and shareholders. The industrial group was launched by entrepreneur Rael Levitt and his business partners in 2016 when they acquired an 11,000m2 industrial property in Epping, Cape Town. They wanted to serve clients who needed small to medium industrial space often complemented by serviced office space. The business park concept had performed well in Germany and the UK.
Inospace next bought and repositioned Hewett’s Business Park and relaunched it along with the Inospace brand in 2017. It then acquired a second industrial building in Bofors Circle, Epping and named it Bofors Business Park, and a third in Maitland in Cape Town, in partnership with the Buffet KLT Consortium. This was branded the Maitland Business Exchange.
Inospace showed that disciplined capital deployment leads to sustained growth and returns for shareholders. By 2018 it was growing at pace and acquired a R300m parcel of SA Corporate Real estate assets and opened its first Johannesburg park in Wynberg, Sandton.
Favourable economic conditions including decreasing interest rates and the availability of smaller micro-industrial spaces helped Inospace and in 2019 it launched its first sectional title scheme. All owners would jointly own the land and common property, but Inospace would manage the park. In April 2019, private property group Setso Property Fund invested in Inospace, which launched two new business parks, Wadeville Works and Electron Exchange, in a partnership with Fortress Income Fund. By the end of the year, Inospace had more than R1bn in assets.
The group has grown more and seven years down the line, its diversified industrial real estate platform comprises more than 50 properties across three complementary asset classes. Its R3.2bn-plus portfolio is strategically concentrated in high-demand urban nodes and is structured to capture income across multiple tenant segments, from established operators to high-growth SMEs and now storage users. It serves more than 2100 tenants.
Inospace’s expansion into storage enhances the group’s income granularity, reduces lease duration risk concentration and introduces higher-margin, service-driven revenue streams.
Its Core Parks are large-scale, multi-building industrial estates typically exceeding 7,500m². Originally developed for owner-occupier manufacturing and industrial use, these assets have been repositioned for modern, diversified multi-tenant occupation. Its Core Parks are large-scale, multi-building industrial estates which exceed 7,500m². Originally developed for owner-occupier manufacturing and industrial use, these assets suit modern, diversified multi-tenant occupation.
Its Serviced Parks are actively managed and on-site operated multi-tenant estates larger than 5,000m². They provide flexible small-format industrial units, micro-warehouses, workshops and office suites for SMEs, e-commerce operators and light distribution users within branded environments and integrated business hubs.
The new Storage Parks are dedicated self-storage facilities which are normally larger than 2,500m², and which provide secure, scalable storage for businesses and households, the group explains.
Stor-Age may have formed 20 and listed 10 years ago but is still operating in a market which is in its infancy. Inospace deserves the opportunity to play in a competitive and fair market. it can add choice and competitive pricing for users. It has launched self-storage properties in Cape Town already and offers rental space for consumers in the Mother City’s CBD, Maitland and Salt River. Inospace will soon open a new storage facility in the11-storey, 13,000-square-metre building in the Cape Town CBD called The Exchange. The group also runs its head office in the modern and welcoming building.
Inospace wants to expand its storage assets into Cape Town’s northern suburbs, and then the metropoles of Johannesburg and KwaZulu-Natal.
By investing in storage, the group’s income granularity is improved. The income is diversified and risk is distributed more evenly within Inospace’s rental income stream. Storage assets also introduce higher-margin, service-driven revenue which is positive for Inospace as it expands while creating jobs, serving tenants and consumers and managing its environmental effects. As South Africans choose or must live in more apartment developments in bustling CBDs such as Cape Town’s, their need for separate storage space will increase. This is like densely populated cities like Paris, Berlin, Warsaw and New York.
alistair@propertyflash.co.za
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