Stor-Age issues R250m in shares
Stor-Age Property, the only JSE-listed personal storage space provider, has raised R250m by issuing new shares as it looks to make more acquisitions in SA and the UK.
Stor-Age Property, the only JSE-listed personal storage space provider, has raised R250m by issuing new shares as it looks to make more acquisitions in SA and the UK.
CEO Gavin Lucas said the group is experiencing rising demand for storage space as people need to store goods for longer during the lockdown.
Customers often include those moving house soon and people who have bought equipment for holidays or projects but are unable to use those goods while the lockdown restricts their movement and work.
Stor-Age raised the R250m of equity through an “accelerated bookbuild” at R11.85 per share, representing a 4.3% discount to the 30-day volume weighted average traded price.
“The capital raised will allow Stor-Age to continue taking advantage of development and acquisition opportunities in both SA and the UK,” Lucas said.
About R4.1bn worth of StorAge’s assets are in SA and about R2.7bn are in the UK.
“These are certainly very challenging times for all SA businesses. The local real estate investment trust sector has been under significant pressure for some time.
“When taking this into consideration, it certainly does put the success of today’s raise into perspective,” Lucas said.
In 2020 Stor-Age is focused on acquiring trading properties from third parties, he said. The group’s next development project is to soon start in the UK.
“On March 19, Stor-Age entered into a nonbinding heads of terms with a UK-based specialist private equity group to form a joint venture to develop a five- to seven-asset portfolio with a gross asset value of approximately £50m,” he said.
Earlier this week, Stor-Age released a trading statement saying it was in a healthy financial position before and after Covid-19 hit SA.
The company’s local portfolio closed at 85% occupancy in the first quarter of the year, with the rental rate rising 6% year on year. Occupancy for its UK business was at 78.8%.
Stor-Age expects full-year distributable earnings to rise 13.5% to R440m. It is on track for a 5% rise in its dividend, to about 112c, the trading statement said.
In April, the company collected 92.2% of rental due in SA and 98% in the UK.
“Stor-Age entered the current cycle from a position of strength. We continue to benefit from a high-quality property portfolio spread across both SA and the UK, a very well managed balance sheet and deep sector specialisation,” Lucas said.
The group’s loan-to-value is sitting at about 30%, before taking account of the R250m equity capital raise.
Lucas said the group had a strong liquidity position, with R246m in cash and R654m of undrawn credit facilities in hand as well.