STOR-AGE, South Africa’s largest self storage property fund, lifted its interim dividend 8.85 percent to 56.60 cents per share after it continued to outperform other listed property companies on the JSE in the six months to September 31, 2021.
The results were driven by strong demand, growth in occupancy and rental rates, and disciplined cost control at a property level, said chief executive Gavin Lucas.
He said even though the business model was tested over the past 18 months, “we made progress in all areas of our strategy: organic growth, a strong acquisition pipeline, highquality developments and expansion projects, while also entering into our first environmentally friendly sustainability-linked loan facility, and continuing to embrace technology and innovation”.
Like-for-like rental income increased 11.6 percent in South Africa and 23.8 percent in the UK.
Property income on the same basis increased 16.8 percent in this country and 34.7 percent in the UK.
Total occupancy stood at 88.3 percent – 86.8 percent in South Africa and 94.1 percent in the UK.
Loan to value was at 25 percent. UK debt had been restructured, including a new £21 million (about R430m) seven-year sustainability-linked loan facility with Aviva Investors.
Three self-storage properties were acquired, Blackpool in the UK for £3.6m and two properties in SA for R108m, aggregated.
Developments at Sunningdale and Tyger Valley completed in May 2021, and the first phase of Cresta in October 2021. There was a development pipeline of 10 properties in South Africa worth some R850m.
Lucas attributed the group’s agility through the pandemic to its specialist sector skills and experience, and superior operating model, which enabled it to respond quickly and proactively, and start financial 2022 from a position of strength.
Combined with its high-quality property portfolio and digital capability, these competitive advantages enabled it to continue extracting occupancy and revenue growth in SA and the UK.
“The period was not without challenges, as the third Covid wave and lockdown restrictions in SA slowed the economic recovery from the shock of 2020, while the civil unrest in KwaZulu-Natal resulted in significant damage to the group’s Waterfall property.
“Despite this, net operating income from the company’s properties, on a like-for-like basis, saw a significant increase across both markets, delivering growth of 16.8 percent and 34.7 percent year-on-year in South Africa and the UK, respectively.”
This month the group concluded the acquisition of Silver Park Self Storage, located in Brackenfell in Cape Town’s northern suburbs. The group also secured the Green Cube Self Storage in the city’s southern suburbs, the acquisition of which is expected to be effective in December 2021.
“The Silver Park and Green Cube properties complement the existing portfolio and present an excellent opportunity for occupancy and rental rate growth,” said Lucas.
Stor-Age also in September 2021 announced a joint venture (JV) with Nedbank Property Partners to develop two high-profile properties in Morningside and Bryanston.
In the UK, the group continued expansion at its Chester, Doncaster and Bedford properties, where planning and construction was underway at the first two properties.
The JV with Moorfield Group in the UK continued to gain momentum, having secured a first site for development in Hounslow, West London, at a projected £13m development cost.
Stor-Age is forecasting an increase in distributions for the year ahead of between six percent and eight percent.
Stor-Age’s share price closed 6.02 percent higher at R14.79 on the JSE yesterday.
edward.west@inl.co.za
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