Space, and scope, for even more growth

Stor-Age is the only specialised owner of selfstorage assets listed in SA. It was formed by the Lucas family about a decade ago. The company listed its R1.3bn portfolio in November 2015.

Its listed portfolio has grown to about R2.1bn, including 31 properties. It is focused on Johannesburg, Cape Town, Pretoria, Durban, Port Elizabeth and Bloemfontein.

“Since listing, Stor-Age has outperformed the Reit sector by some 30%, conforming with the outperformance that selfstorage plays have demonstrated globally,” says Chris Logan of Opportune Investments.

CEO Gavin Lucas says StorAge has met its prelisting goals and is on track to own 60 properties across SA’s major cities by 2020.

In its most recent financial results, Stor-Age grew its dividend 10% for the year to March, following a strong trading performance across its portfolio and the acquisition of Storage RSA in February.

Growth of 10% was 3.5% ahead of prospectus.

“Stor-Age’s performance reflects the recession-resilient nature of our product. Demand remains strong . . . The selfstorage market . . . is holding steady, in contrast with other property subsectors locally. It offers us a lot of scope for growth,” Lucas says.

Occupancy in the portfolio, excluding group newcomer Storage RSA, increased 4,000 m² on the prior year, with a 9.4% increase in the average rental rate achieved.

Stor-Age, which has a market capitalisation of R2bn, will grow as long as it can get South Africans to take up space. There are concerns that the personal storage market is relatively small in SA, but noth- ing is stopping Stor-Age from branching out into other countries when it claims mass control of the SA market.

Before this happens, it could become a takeover target. High-quality industrial property owner Equites Property Fund could decide to buy Stor-Age if it were to diversify its assets.

Its share price is up 14% since listing and about 3.76% in the year to date.

Keillen Ndlovu, Stanlib’s head of listed property funds, says self-storage is an attractive asset class globally and Stor-Age understood this and created a similar business here.

“Stor-Age is an interesting investment option with limited competition though [it is] relatively small,” he says, adding that it would perform well in economic downturns and upturns. Provided the location is right and the facility func- tional, you could have people downgrading from bigger homes or relocating and needing space for excess belongings. When the economy is strong, people buy more than they can store at their houses and self-storage tends to be “an essential as opposed to discretionary spend”, he says.

Stor-Age has effectively pioneered the development of high-profile Big Box self-storage properties in well-chosen locations in SA.

“Stor-Age’s objective is to deliver an attractive income stream from a portfolio of highquality self-storage properties with potential for income and capital growth through increasing rentals and occupancy levels, expanding existing properties and acquiring additional self-storage properties,” says Lucas.