Stor-Age tar­gets ac­qui­si­tion growth

The Star Early Edition - - COMPANIES - Roy Cokayne

STOR-AGE the listed self-stor­age prop­erty fund, is tar­get­ing con­tin­ued or­ganic and ac­quis­i­tive growth.

The com­pany’s R2.1 bil­lion-listed port­fo­lio in­creased to 31 prop­er­ties in the year to March when the group ac­quired six stores from Stor­age RSA for R280.3m.

Post year-end it has made two ac­qui­si­tions. It ac­quired Unit Self Stor­age last month, which owns a self-stor­age prop­erty in Ot­tery in Cape Town, for R42.08m, and ear­lier this month en­tered into a mem­o­ran­dum of un­der­stand­ing to ac­quire DanCor Prop­er­ties, which trades from four lo­ca­tions un­der the name of StorTown in the Dur­ban cen­tral busi­ness district and Dur­ban North, for an undis­closed amount.

Stor-Age chief ex­ec­u­tive Gavin Lu­cas said yes­ter­day that in line with the group’s stated strat­egy of pur­su­ing value added ac­qui­si­tions in a frag­mented in­dus­try, Stor­Age’s healthy bal­ance sheet “opens the op­por­tu­nity for con­tin­ued or­ganic and ac­quis­i­tive growth”.

“Stor-Age is in the sec­ond year of its de­fined five-year growth plan to 2020 and is cur­rently ahead of growth tar­gets,” he said.

Lu­cas added that the short­term fo­cus was on bed­ding down re­cent ac­qui­si­tions to main­tain con­sis­tent group stan­dards and un­lock max­i­mum value while from an or­ganic growth per­spec­tive, the group would fo­cus on driv­ing oc­cu­pan­cies, rental rate and cash flow to en­sure that rev­enue trans­lated into earn­ings and div­i­dend growth.

Stor-Age yes­ter­day re­ported a 10 per­cent growth in to­tal div­i­dend a share to 88.05c for the year to March, which was 3.5 per­cent ahead of its pre-list­ing fore­cast.

Lu­cas said the group’s per­for­mance re­flected the re­ces­sion-re­silient na­ture of its self-stor­age prod­uct. “De­mand re­mains strong as the un­der­ly­ing ‘need’ pre­vails. South Africa is hold­ing steady in con­trast to other prop­erty sub-sec­tors lo­cally.”

Oc­cu­pancy in the port­fo­lio, ex­clud­ing Stor­age RSA, in­creased 4 000m² with the av­er­age rental rate in­creas­ing 9.4 per­cent.

The en­larged port­fo­lio ended the year 85 per­cent oc­cu­pied.

“Stor-Age av­er­aged a score of 95 per­cent-plus from al­most 4 000 cus­tomer sur­veys in the year, re­flect­ing our su­pe­rior ten­ant ser­vice and op­er­at­ing plat­form that fo­cus on ser­vice stan­dards, has­sle-free ac­ces­si­bil­ity and ease of trans­act­ing,” he said.

The av­er­age length of stay for ex­ist­ing cus­tomers was 21 months and, at year-end, 17 per­cent of cus­tomers had been stor­ing with Stor-Age for three years and more.

Lu­cas said Stor-Age’s man­age­ment had fore­cast div­i­dend growth of be­tween 9 per­cent and 10 per­cent for the year to March next year.

Shares in Stor-Age rose 1.91 per­cent yes­ter­day to close at R11.75.

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