Stor-Age, South Africa’s largest self-storage fund, increased distributable income per share by 3.5% to 63.51 cents after rounding off a good operational performance in the six months to September 30, with the addition of 10 properties.
A 57.16 cents per share interim dividend represented a payout ratio of 90%. In the nine years since listing in November 2015, the portfolio of 107 properties grew by 83 properties and the group outperformed the SA Property Yield Index by 150%.
“Stor-Age again delivered an impressive financial and operational performance. We expanded our portfolio, opened eight properties, and increased the portfolio value, including properties managed in our joint venture partnerships (JV), to R17.4bn,” said CEO Gavin Lucas.
The loan-to-value ratio was 31.3%. In April, R500 million was raised in a debt auction to increase funding capacity, extend maturities, and diversify funding sources.
“We do need to acknowledge the negative impact of the higher interest rate environment. While we have seen the first rate cut in South Africa and a second rate cut last week in the UK, the cost of debt funding remains high,” Lucas said.
“Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 7.9%, or R32.2m, but finance costs increased 21.8%, meaning the R22.1m increase in finance costs diminished our distributable income performance.”
Rental income and property operating income from the South African portfolio increased by 10.8% and 12% respectively. Average occupancy increased by 2.4%, and net investment property value increased by 5.4% to R11.5bn.
After a challenging 2024 in the UK, rental income increased 6.8%, with average occupancy and rental rates up 4.3% and 2.4% respectively. Occupancy in the owned portfolio increased by 3 300m² year-on-year, and net property operating income was up 7.4%.
Over the past 12 months, 10 new properties were opened across both markets. This included five new developments completed in JV partnerships (two in SA and three in the UK), four properties added to the third-party management platform in the UK, and the acquisition of Extra Attic in South Africa in September 2024.
“We continue to work with our JV partners to assess future acquisition, development, and redevelopment opportunities. We are confident the long-term return profile on invested capital through our JV partnerships will be value-accretive,” Lucas said.
The third-party management offering remained a focus, with a total of 26 properties operating on this platform, 18 of which are in the UK.
During the period, Stor-Age entered a third-party management agreement with Hines to manage their self-storage portfolio of three properties in the UK. Hines is a privately owned global real estate investment manager that owns and operates $93bn of property assets on behalf of institutional and private wealth clients.
The solar PV roll-out strategy was expanded across South Africa and the UK. To date, R72m had been invested into renewable energy, generating over 7.7 million kWh of solar power. Currently, 60% of the portfolio has solar capacity installed.
Lucas affirmed Stor-Age’s full-year forecast of distributable income per share to be between 122 to 126 cents. It amounted to 63.51 cents in the 2024 financial year.
“We are well positioned from a strategic, financial, and operational perspective as we approach the second half of the 2025 financial year. We expect our South African portfolio to continue its positive growth trajectory, and we remain cautiously optimistic that our UK portfolio will deliver a robust set of results for the full financial year,” he concluded.
In September, Extra Attic, a property in Airport Industria, Cape Town, was acquired for R73m. It comprises 7 600 square metres of lettable area. The deal was settled with the issue of 4 978 million Stor-Age shares to the sellers.
In July, the shareholding in the Acton development was reduced to 15% from 24.9% by selling a 9.9% interest to Moorfield, with the proceeds used to fund the group’s proportionate share of the development Leyton – phase I, which opened in October.
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