Stor-Age Property Reit CEO Gavin Lucas says the company is unlikely to face stern competition in SA from other personalised storage funds because the barriers to entry into the specialised sector are far too high.
"We have developed a high-quality management platform, which has effectively made us one of the best e-commerce players in our specialised field," he said.
"We also have significant scale with 50 properties worth R3.9bn — R2.5bn of which is in SA and R1.4bn in the UK," Lucas said during the release of the company’s financial results for the year to March.
Stor-Age is one of only nine publicly traded self-storage real estate investment trusts in the world. Five of these are in the US, two in the UK and one in Australia.
Stor-Age’s stock has been one of the best performers among JSE-listed real estate stocks in 2018. Its total return including dividends and capital growth was about 4% for the first five months of 2018, while the sector overall had a negative total return of 18.56%.
Stor-Age has trebled its asset value since it listed in November 2015 and stands out among specialised property companies, according to fund managers, having achieved a total shareholder return of 50% since then.
Lucas said Stor-Age had achieved increases in property revenue and operating profit of 86.1% and 86.5%, respectively, that were "excellent when considering the prevailing tough macro environment and challenged local property sector".
"Rental income grew whether measured organically or including the year’s acquisitions. On a like-for-like basis rental income increased 10.6% due to a higher average occupancy coupled with an 8.8% increase in the average rental rate," he said.
The company had also managed to take its operating platform into the UK, after it expanded offshore for the first time since listing.
"Not only has Stor-Age debuted successfully into the growing UK self-storage market, but via a proven operation with an on-the-ground self-storage team and a scalable platform for further offshore expansion," said Lucas.
The UK portfolio delivered year-on-year growth in net rental income of 9%, including like-for-like organic growth of 6.2% to March 2018.
Since the acquisition of UK company Storage King, Stor-Age Reit had bedded down a medium-term growth strategy for this subsidiary, aligned to its overall five-year strategy, which runs to 2020.
"The annual growth target is between three and five new properties.
"To this end, Stor-Age has identified six specific geographical areas and over 50 operator targets," he said.
The greater maturity of the UK self-storage market relative to SA offered significant opportunities for expansion through consolidation.
Keillen Ndlovu, the head of listed property funds at Stanlib, said Stor-Age’s financial results were very strong.
"The Stor-Age team is running a great and niche operation in the listed property sector. They have delivered pleasing results and their prospects continue to look good," he said.