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October 1, 2018

2 Min Read
Self-Storage Operator Stor-Age Raises R400M to Fund Further Expansion in South Africa, UK

Stor-Age Property REIT, which operates self-storage in South Africa and the United Kingdom, has raised R400 million in a recent stock placement, beating its goal by R50 million. The company intends to use the capital to fuel expansion in both nations. The capitalization was achieved “despite the constrained domestic environment and subdued” Johannesburg Stock Exchange real estate investment trust (REIT) sector, according to a source.

“Self-storage is a niche, specialized asset class, which is not subject to the same macroeconomic factors that drive demand and supply dynamics for traditional REITs,” said Gavin Lucas, CEO. “Self-storage benefits from having a consistent level of demand throughout the different economic cycles. It’s this consistent level of demand which sustains the performance of the assets through the economic cycle. In today’s market, it would be extremely difficult to replicate a portfolio of self-storage properties like those in our managed portfolio in South Africa, as the barriers to entry are high.”

Earlier this month, Stor-Age exercised its pre-emptive right to purchase 12 facilities from its managed portfolio. It also recently opened its 50th location in South Africa. It expanded to the U.K. last year by acquiring the Storage King brand for approximately £77.13 million.

“Despite the uncertainty created by Brexit, self-storage as a sub-sector of the commercial-property market continues to trade positively in the U.K.,” Lucas told a source. “Our Storage King brand continues to deliver in line with our forecasts, and we remain excited about the growth prospects for our U.K. platform.”

Headquartered in Cape Town, Stor-Age was established in 2005 by Stor-Age Property Holdings Pty. Ltd. to acquire, develop and manage self-storage assets. Today, Stor-Age operates a 63-property portfolio, primarily in four South African metropolitan areas, that comprise approximately 407,000 square meters. The company was listed on the Johannesburg Stock Exchange in November 2015.

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