Stor-Age reports strong demand for self-storage across its portfolio

Stor-Age, SA’s only specialist self-storage real-estate investment trust (Reit), says demand for self-storage has seen an increase in rentals and occupancy levels.

In a trading update on Tuesday, the company said for the 11months to end-February, its portfolio in SA and UK had grown in occupancy and average rental rates.

Stor-Age said typically it experiences occupancy losses in the winter months offset by strong trading activity in the spring and summer months.

“Demand levels remain robust with enquiry levels in line with expectation, and the number of customers moving out each month as a percentage of starting occupancy remains lower than pre-pandemic levels, providing further support to occupancy,” said the company.

The JSE-listed company has a portfolio of 86 self-storage properties across SA and the UK. Its SA properties are visible to passing traffic, with easy access to main arterial routes and close to middle- to upper- income suburbs.

Stor-Age also owns the sixth-largest UK self-storage brand, Storage King, with its portfolio of properties representing more than 50% of the Group’s property assets by value. Occupancies in SA reached 90.5% for the year to date, with the average rental rate increasing 7.3%.

The company finalised the R65m acquisition of Think Secure Self Storage in Parklands, Cape Town, which added 3,300m² of gross lettable area, with a further 5,300m² of gross lettable area added at other properties in the portfolio during the 2023 financial year.

In the UK, total occupancy increased by 3,200m² for the year to date, with the average rental rate increasing 8.3% year on year. To meet growing demand for self-storage, StorAge has a development pipeline of about £64m in the UK.

This includes the development of properties in Heathrow, Bath, Canterbury, West Bromwich and Site 5 expected to add about 270,000ft² (about 25,000m²) gross lettable area to the current portfolio of more than 131,000ft² (about 12,200m²).

Stor-Age is also expanding the Milton Keynes property, which includes the conversion of office space to self-storage. It is also expanding the Crewe property, which was acquired in August for £2.6m.

In SA, the R900m development pipeline will add about 60,000m² to the nearly 400,000m² portfolio.

The properties including those in Bryanston, Morningside, Paarden Island and Pinelands are being developed in a joint venture with Nedbank. The Century City property is a joint venture with Rabie Property Group.