Stor-Age boosted by strong rental growth, low churn - with five new facilities being built

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Stor-Age, SA's biggest self-storage property fund, says customer churn levels remain below pre-pandemic levels, while average rent climbed by 7.3% in South Africa, and more than 8% in the UK over the past year.

Valued at about R5.9 billion on the JSE, Stor-Age's portfolio comprised 86 self-storage properties across both SA (56) and the UK (30).

The SA portfolio was valued at R5.1 billion and the UK portfolio – under the brand Storage King – at R5.8 billion.

In a trading update for the 11 months to end-February, same-store occupancies in South Africa rose from 89.5% in September to 91.7%, while in the UK it fell from 91.8% to 86.7%.

Demand levels remain robust with enquiry levels in line with expectation, the group said. Churn, or customers moving out each month as a percentage of starting occupancy, remains lower than pre-pandemic levels, providing further support to occupancy.

The 2023 year has seen a return to a more normalised cycle of trading in line with pre-pandemic seasonality trends, Stor-Age noted. Typically, the company experiences some occupancy losses in the winter months offset by strong trading activity in the spring and summer months.

Stor-Age is developing ten new South African properties at a cost of R900 million in Pinelands, Morningside, Bryanston, Century City and Paarden Eiland. This will add an estimated 60 000m² in gross lettable area to the portfolio.

In December, the group completed the R65 million acquisition of a self-storage facility in Parklands in Cape Town. This added a further 3 300m² of gross lettable area, with a further 5 300m² of lettable area added at other properties in the portfolio in the 2023 year.

In the UK, the group plans to develop five new properties, at a cost of £64 million (roughly R1.44 billion). 

This will add an estimated 270 000 square feet (about 25 110m²) in gross lettable area to the portfolio.

READ | Stor-Age builds on market leadership after listing

The company continues to seek opportunities to unlock value in its existing UK portfolio. Accordingly, a number of town planning applications are currently either in hand and approved, allowing for expansion. This includes Huddersfield, Wakefield and Blackpool.

Click for details on Stor-Age's shares as well as other info.

Shares in Stor-Age were up almost 3% to R12.80 in morning trade on Tuesday, having fallen about 7% so far in 2023.