Cape Times

Stor-Age model resilient, as it agrees to venture deals with Nedbank |

- EDWARD WEST edward.west@inl.co.za

STOR-AGE, South Africa’s largest self-storage property fund, said yesterday that its average rental rate had increased by 7.1 percent year-on-year on a like-for-like basis for the five months to August 31 and the business model continued to demonstrat­e resilience.

Occupancy increased by 3 percent, the group said in a business update yesterday.

In the UK, like-for-like basis to August 31, the average rental rate increased by 5.7 percent year-on-year, while total occupancy increased by 10.4 percent.

Stor-Age had agreed terms to enter a joint venture with Nedbank Corporate and Investment Bank, acting through Nedbank Property Partners, to develop two properties in Morningsid­e and Bryanston at a cost of about R200 million.

Constructi­on was scheduled to start at both properties in the second half of the 2022 financial year.

A characteri­stic of the self-storage developmen­t model is the lease-up of newly developed properties to a stabilised and mature level of occupancy, with the lease-up forming a big component of a property’s overall formation cost.

To mitigate the lease-up impact, it was better for Stor-Age to develop new properties with a developmen­t partner.

Stor-Age’s developmen­t pipeline comprises eight properties at a total cost of about R685m.

The pipeline represents about 12.5 percent of the total South African portfolio gross lettable area as reported at March 31 this year.

Meanwhile, Stor-Age had acquired two trading self-storage properties in Cape Town’s northern and southern suburbs.

Silver Park Self Storage in Brackenfel­l was secured for R60.1m, while the second property, acquired for R48m, offered services in the broader Ottery, Plumstead and Wynberg areas.

To broaden debt-funding sources to support the growth of Storage King in the UK, a refinance process was initiated with UK lenders and was nearing completion.

Stor-Age Waterfall located in Hillcrest, KwaZulu-Natal, had been extensivel­y looted in the July violence and certain parts of the property were set on fire.

About 60 percent of the letting area suffered “significan­t structural damage” and these buildings required demolition and rebuild. A R83m claim plus VAT had been submitted to Sasria.

Those parts of the property least impacted and where repairs had taken place were scheduled to reopen next month.

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 ??  ?? STOR-AGE says occupancy increased by 3 percent in the five months to August 31. | African News Agency (ANA)
STOR-AGE says occupancy increased by 3 percent in the five months to August 31. | African News Agency (ANA)

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