| Tue 27 Aug 2024, 7:05 | | STOR-AGE PROPERTY REIT LIMITED - Trading Update |
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Trading Update
Stor-Age Property REIT Limited
Incorporated in the Republic of South Africa
Registration number 2015/168454/06
Share Code: SSS
Alpha code: SSSI
ISIN: ZAE000208963
Approved as a REIT by the JSE
("Stor-Age" or the "group")
TRADING UPDATE
Stor-Age is pleased to provide a trading update for the four-month period ending 31 July 2024 ("the period").
OCCUPANCY SUMMARY – 31 JULY 2024
Owned portfolio
YOY YTD
GLA m² Occupied m² % occupied
% increase % increase
SA 391 900 358 300 91.4% 2.3% (0.7%)
UK 111 000 96 100 86.5% 4.7% 3.6%
Total 502 900 456 400 90.4% 2.8% 0.2%
JV portfolio
YOY YTD
SA GLA m² Occupied m² % occupied
% increase % increase
Same-store 10 600 8 8900 83.3% 33.2% 5.7%
Non same-store 18 600 6 900 37.3% +100% 44.5%
Total 29 200 15 800 54.0% +100% 19.9%
YOY YTD
UK GLA m² Occupied m² % occupied
% increase % increase
Same-store 51 300 35 200 68.7% (1.2%) 3.3%
Non same-store 16 200 5 300 32.8% +100% 48.8%
Total 67 500 40 500 60.1% 13.7% 7.6%
GLA and occupied space rounded to the nearest hundred.
During the period we delivered a strong trading performance in the UK, with occupancy in the owned portfolio
increasing by 4 300m² year-on-year (up 4.7%) to close at 86.5% at 31 July 2024. Occupancy increased by
3.6% compared to 31 March 2024. In SA, occupancy increased by 8 100m² year-on-year (up 2.3%) to close
at 91.4%. Occupancy decreased by 0.7% compared to 31 March 2024, in line with expectations and
seasonality trends. We anticipate regaining and growing occupancy in the second half of FY25, during what is
traditionally our busier period for demand.
The achieved average rental rate increased by 8.4% and 1.9% year-on-year in SA and the UK respectively.
Our JV properties continue to perform well in both markets in line with expectations.
The financial information on which this trading update is based is the responsibility of the Stor-Age board of
directors and has not been reviewed by or reported on by the group's external auditors.
ACQUISITION AND DEVELOPMENT ACTIVITY
Acquisition of Extra Attic
In July 2024 we secured the acquisition of Extra Attic in Airport Industria, Cape Town for a purchase
consideration of R73 million. Extra Attic is a single-storey self storage property that was developed and opened
in 1998 by the founders of Metrofile and comprises 7 500m² GLA of ground floor drive-up access and 180m²
of office space. With easy access off the N2 highway, the property is well constructed, supports a broad
residential customer base from across the greater Cape Town area and is complementary to the existing Stor-
Age portfolio in Cape Town. Given its close proximity to Cape Town International Airport, there is also a well-
established commercial customer base that has been using the store for a number of years.
New developments – SA
In SA we completed the development of our Kramerville property in July 2024 (5 400m² GLA on full fit-out),
developed in a JV partnership with Nedbank Property Partners ("NPP"). This brings the number of completed
properties trading in our JV with NPP to five, with total GLA of over 29 200m² on full fit-out. We also completed
the development of our Century City property (6 100m² GLA on full fit-out) in June 2024, developed in a JV
partnership with Rabie Property Group. Stor-Age has a 50% equity interest in both JVs.
Sunningdale expansion
In April 2021 our Sunningdale property, developed in a 50:50 JV with Garden Cities, commenced trading.
Since opening, the property has delivered an exceptionally strong trading performance underpinned by healthy
levels of demand.
The West Coast has been recognised as a vital growth corridor within Cape Town's Spatial Development
Framework, showing significant year-on-year growth in both residential and commercial developments. In
response to the strong demand in the area, the JV recently finalised an agreement with Garden Cities to
acquire an additional hectare of land adjacent to the existing property for further development. The planned
expansion, currently in the planning phase, is expected to add approximately 5 000m² GLA, with a substantial
portion dedicated to drive-up units tailored for commercial clients where demand for such units is strong.
New developments – UK
The table below summarises developments in progress in the UK with our JV partners:
Estimated
Property Status JV partner
GLA
Brownfield conversion. Vertical extension of the building (two
additional floors). Planning approval granted in January 2023. 63 000 sq. ft
Acton Under construction. Scheduled to open in the first quarter of Moorfield
(5 850m²)
FY26.
Brownfield conversion. Planning approval granted in June
2024. Under construction. Scheduled to open in the third Nuveen Real 42 000 sq. ft
Leyton
quarter of FY25. Estate (3 900m²)
On 30 July 2024, the group reduced its shareholding in the Acton development from 24.9% to 15.0% by
disposing of a 9.9% interest to Moorfield for a consideration of £1.361 million. The proceeds will be used to
fund the group's proportionate share of the Acton development.
DIVIDEND PAYOUT RATIO
Since our listing in 2015, Stor-Age has maintained a 100% dividend payout ratio. In our FY24 year end results
reported in June, the board noted that it was considering lowering the payout ratio to 90 – 95% of distributable
income given the current high cost of capital and in line with the prudent management of our financial position.
Feedback from key shareholders on the merits of a reduced payout ratio has been overwhelmingly supportive.
Accordingly, the board has elected to adopt a payout ratio to 90 – 95% of distributable income for FY25. This
would bring us more in line with our UK and European self storage REIT peers and sustainably contribute to
enhanced returns for shareholders over the medium to long term.
The group has carried forward assessed losses of approximately R373 million (which arose in the period prior
to Stor-Age's listing) which will minimise potential tax leakage. Under the UK REIT rules, at least 90% of
property rental profits must be distributed to shareholders as a dividend and we do not anticipate any material
adverse tax implications in the UK from retaining any portion thereof (subject to satisfying the UK REIT rules).
Definitions
SA – South Africa
UK – United Kingdom
GLA – gross lettable area
JV – joint venture
FY – Financial Year
m² – square metres
sq. ft – square feet
Same-store – refers to properties trading at both 31 July 2024 and 31 July 2023
Non same-store – includes all properties not classified as same-store
YOY – year-on-year
YTD – year-to-date being the four-month period 1 April 2024 to 31 July 2024
Cape Town, 27 August 2024
Equity Sponsor
Investec Bank Limited
Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 27-08-2024 07:05:00
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