Stor-Age Property REIT, the largest self-storage company in South Africa, continued to deliver a strong performance in the six months to September 30, lifting distributable income per share by 6.1% and an interim dividend of 60.05c was declared.
Rental income and net property operating income increased by 18.6% and 16.5%, respectively. Same-store rental income increased 9% in South Africa and by 11.4% in the UK.
Same-store closing occupancy was at 89.4% locally and 91.8% in the UK. Rental rate growth of 6.8% was achieved in SA and 8.4% in the UK.
The investment property value was up 23.5% at R9.82 billion. Tangible net asset value was up 10.5% at R14.47 per share. The loan-to-value ratio was low at 30.1% and more than 85% of net debt came with interest rate hedging.
Eight new properties, four with each of Nedbank Property Partners and Moorfield in the joint venture partnerships, were scheduled to open over the next 18 months.
Think Self Storage in Parklands, Cape Town, was acquired for R65 million shortly after the end of the period. There were 10 properties in the South Africa development pipeline.
The company’s portfolio comprises 86 self-storage properties across both South Africa (56) and the UK (30). The SA portfolio was valued at R5.1bn and the UK portfolio – under the brand Storage King – at R5.8bn.
Demand for third-party management services, through which the company generates additional revenue with minimal capital investment by leveraging its infrastructure, was expected to continue to grow over the next 12 months, although this business was still relatively small within the group.
“We have five properties in the UK operating on our Management 1st platform. The digital marketing component, Digital First, continues to make significant progress in the UK and continental Europe. To date, 16 independent operators across the UK, Ireland, Spain, Belgium, Germany and Italy have contracted with Stor-Age for this,” the company’s directors said.
The Asia, Australia and North America markets provided opportunities for Digital First to further expand its footprint.
The board expected dividend growth of about 5% to 6% for the year to March 31, 2023, assuming a 100% pay-out ratio.
“Whilst our performance in the first half has been very strong, we are mindful of the uncertain macro and political environment and its impact on inflation, interest rates and currency movements. However, as performance in the global financial crisis and the Covid-19 pandemic has proven, self-storage is a resilient industry with a broad range of demand drivers,” its board said.