Stor-Age concept is bound to be a winner

YOUR GUEST room is for guests, not stuff. Nowadays when you rent a modern new (very expensive) small apartment in Johannesburg, chances are that it will not include a garage. That place where you usually put all your “stuff”.

It is a worldwide trend to live close to the business centre where apartments are usually tiny, and have a separate storage space for those things you don’t use every day. South Africa is catching on, and storage facilities have sprung up everywhere, especially in the cities.

Unlike First World countries, we don’t have a lot of big players in this industry; it is very fragmented, with many small-scale participants.

The only pure storage listing is Stor-Age, which listed in November 2015. Worldwide there are now nine such listings.

Stor-Age is South Africa’s leading storage brand, and their red signage is becoming well known around our cities.

They now have 39 locations around the country with 307 500m² lettable area. They see themselves as entrepreneurs who capitalise on “life-changing events” – usually this will include exciting changes like moving into a modern lifestyle apartment or depressive events like death or divorce.

In most of these cases, a storage unit will be required, and the lessee will think the need exists to rent a unit for only a month or two; but eventually, 50 percent of the time, the duration of a contract will be for longer than 12 months.

Seventeen percent of lessees will become Stor-Age customers for longer than three years and 41 percent of the occupants will store their belongings because of lifestyle choices.

Stor-Age also profits from all the add-ons of storage.

They stock a wide range of storage boxes and other packaging materials such as bubble wrap, tape, padlocks and other useful products. You’ll find everything you need for packing, moving and storing your goods, as well as to ensure you keep them safe and secure.

Stor-Age aim to make the self-storage experience stress-free and straightforward by offering a convenient van rental service at an affordable fee to transport your goods when you move into one of their self-storage locations.

The UK deal Nowadays you get an uncomfortable feeling down your spine when a local company enters the UK market; not many are successful. Stor-Age recently bought Storage King – the sixth largest self-storage company in the undersupplied UK market.

The strong management team of Storage King are staying on to continue with the business as before, which will (hopefully) give the executive team of Stor-Age enough time to familiarise themselves with the UK and integrate the back office of Storage King with Stor-Age.

Storage King takes up 30 percent to 40 percent of the balance sheet of StorAge, and management will maintain this balance.

As a niche player in the reit sector, StorAge is a well-managed company with a total tenant base of more than 26 000.

The balance sheet more than doubled year-on-year, and this is with a conservative gearing of 13.9 percent, well within the target range of 25 percent to 35 percent set by management.

Stor-Age manages to grow its rental rates and maintains a healthy occupancy rate that provides a consistent income stream to the shareholders.

Stor-Age continued to show sound financial performance and increased the income distribution with a solid 9.25 percent in the first six months of the current year, despite the challenging business environment and low economic growth.

Compared to the overall South African property market, they managed to perform under pressure and reward shareholders.

Since the IPO in November 2015, StorAge provided a total return of 35.21 percent, compared to an overall sector return of 17 percent over the same period.

Not only are they doing business with individuals, but SMEs are increasingly using storage facilities. It is cheaper to rent 100m² of storage space than a warehouse; the average cost of storage space is R88/m².

Stor-Age is the ultimate in secure storage: access control, electrified perimeter fencing, computer-controlled access and 24-hour CCTV surveillance.