Stor-Age targets acquisition growth

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.