The big business of storage in South Africa
Stor-Age Property REIT has opened a window onto the self-storage industry in South Africa, after reporting its maiden interim results on Tuesday.
For the six months ended September 2016, the company which provides self-storage facilities to individuals and small businesses, reported property revenue of R78.5 million and an operating profit of R56.2 million.
Rental income amounted to R75.57 million, while the group delivered a gross interim dividend of 43.04 cents per share for the six months period.
Stor-Age is the first and only self storage REIT listed on an emerging market exchange, having done so a year ago, in November 2015.
The company said that occupancies increased significantly compared to both the prior comparative period and the previous year end, with a double digit rise in the average rental rate.
Stor-Age said its new flagship Sunninghill property was opened in September 2016 and similar new developments at Gillooly’s Interchange (Essexwold, Johannesburg) and Berea (Durban) are nearing completion.
The group’s portfolio currently comprises 34 self storage properties across South Africa. It owns and operates 24 of these, representing 182 909 m2 GLA valued at R1.4 billion.
The balance of the portfolio makes up the unlisted managed portfolio on which Stor-Age receives property and asset management fees and over which it has a pre-emptive first right of acquisition.
Collectively Stor-Age said it manages over 14,500 individual leases, up from around 11,000 when it listed.
Stor-Age said that occupancies increased by 6 915 m2 and 1 178 m2 compared to 30 September 2015 and 31 March 2016 respectively, to close the period at 156 879 m2.
This, it said, reflects an 85.8% occupancy rate across its listing portfolio.
The average rental rate grew by 10% to R79.9/m2 compared to 30 September 2015 or 4.7% compared to the prior reporting period, Stor-Age said.
A self storage unit is rented to a customer on a month-to-month basis with a minimum one month term. For all customers that moved out of the properties during the period the average length of stay was 14 months.
The average length of stay for existing customers was 21 months at period-end and for properties open more than five years, 24 months. “This reflects a loyal and ‘sticky’ customer base,” it said.
Stor-Age said that 16% of its customers have been storing with the group for more than three years and a further 36% for between one and three years.
The company announced on 22 September 2016, that it aims to acquire 100% of the shares in Storage RSA.
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