Stor-Age Property REIT, which operates the Stor-Age Self Storage brand in South Africa, has released its earnings report for the fiscal year that ended March 31. The company reported its third consecutive period of growth, achieving large gains in occupancy and rental rates.
“Stor-Age’s performance reflects the recession-resilient nature of our self-storage product,” CEO Gavin Lucas said in a press release. “Demand remains strong as the underlying [need for storage] prevails. The self-storage market, albeit fledgling in South Africa, is holding steady in contrast to other property sub-sectors locally. Management’s niche sector expertise and track record in self-storage are further key drivers of the group’s success.”
Excluding the company’s purchase of Storage RSA in December 2016, occupancy grew 4,000 square meters over the previous year, with rental rates increasing 9.4 percent. Including the Storage RSA acquisition, occupancy increased 37,700 square meters, with rental rates jumping 12.7 percent. Occupancy was 85 percent as of March 31 across the total portfolio.
Occupancy is expected to remain high across the REIT’s portfolio. The average length of stay for existing customers was 21 months during the fiscal year, with 17 percent of tenants renting with Stor-Age for three years or more, the release stated.
The RSA transaction also increased the number of storage facilities owned by Stor-Age to 31. In addition, the REIT opened three branded properties during the year in Durban and Johannesburg, South Africa, as part of its managed portfolio. The company has the first right of acquisition on those facilities. It also has six properties either under construction or in the planning stages.
Stor-Age issued a yearly dividend of 88.05 cents, an increase of 58 cents over the previous fiscal year. The company has forecast an increase of up to 10 percent for its anticipated dividend at the close of the next fiscal year.
Looking forward, Lucas indicated the company will concentrate on increasing occupancy, rental rates and cash flow. Stor-Age is in the second of a five-year growth plan to 2020 and is “currently ahead of growth targets,” he said.
Headquartered in Cape Town and established in 2006 by the Lucas family, Stor-Age operates a 43-property portfolio, primarily in four South African metropolitan areas, that comprises approximately 318,000 square meters. It’s the operator appointed by Stor-Age Property Fund Managers Pty. Ltd. to manage and market the property portfolio owned by Stor-Age Property Holdings Pty. Ltd., and was listed on the Johannesburg Stock Exchange in November 2015.