Stor-Age expands with DanCor deal
Stor-Age plans to enhance the value of DanCor’s assets through initiatives such as digital marketing and revenue management
Stor-Age, the real estate investment trust, has managed to spread its presence further into Durban as it looks to dominate the city’s self-storage market.
The company announced through its wholly owned subsidiary, Roeland Street Investments, that it would subscribe for 99.9% of the shares in DanCor for R145m. The existing shareholders of DanCor would retain 0.1% of the DanCor shares for the immediate future.
"The board is of the view that the transaction supports Stor-Age’s stated strategy of pursuing value-added acquisitions in a fragmented industry in order to strengthen the group’s position as a premium South African self-storage brand," said CEO Gavin Lucas.
"Implementation of the transaction will provide Stor-Age with a broader geographical store offering across the city of Durban in locations which are complementary to the existing trading portfolio," he said.
DanCor conducts its self-storage business from four locations under the name StorTown with properties across Durban.
The share subscription consideration would be applied to the reduction of third-party debt and loans owing by DanCor to its shareholders.
All DanCor stores would be rebranded and added to Stor-Age’s operations platform.
Stor-Age planned to enhance the value of DanCor’s assets over time through initiatives such as digital marketing and revenue management. Stor-Age was founded 12 years ago in Cape Town by Gavin Lucas and Steven Horton and listed on the JSE in November 2015.
The company is the largest self-storage operator in SA.
Its local portfolio is sized at 300,000m² across 31 properties worth R2.1bn.
Rael Colley, a research analyst at Anchor Stockbrokers, said the acquisition was yield-neutral in year one.
"We believe the group can add value to the properties over the medium term," he said.