Picture: STOR-AGE
Picture: STOR-AGE

Stor-Age Property, a real-estate investment trust (Reit) offering self-storage space in SA and the UK, raised its interim dividend by 9% to 51.3c.

"This performance outstripped the JSE property sector in which dividend growth has been severely curtailed by weak economic growth which has led to growing vacancies at a number of properties held by listed funds," Stor-Age CEO Gavin Lucas said.

The reit's interim revenue nearly doubled to R226m, but net profit declined 17% to R112m, its results released on Tuesday morning showed.

Stor-Age increased its space by 72,400m², boosted by the acquisition of Storage King. Occupancy slipped slightly to 83.5% from 84.3% at the end of September 2017.

On a like-for-like basis, excluding acquisitions, rental income increased 9.4%, driven by a 0.7% increase in average occupancy levels and an 8.7% increase in the average rental rate. Excluding acquisitions, the closing rental rate grew 8.7% to R93.5 per square metre.

Lucas said Stor-Age was outperforming numerous unlisted storage providers. He said a key acquisition was that of a portfolio which Stor-Age had managed before but not owned. Stor-Age also opened its Bryanston branch and began developing a branch in Craighall.

“We successfully completed the acquisition of the managed portfolio in the period, bringing on board an additional R1.12bn of assets, while the new Bryanston store was opened, R1m under budget and the Craighall development got underway,” Lucas said.

The acquisition of a property owned by All-Store, located in Cape Town’s northern suburbs, was completed in April for R52m and added 5 500m² of gross lettable area to Stor-Age’s local portfolio.

The managed portfolio added another 86,300m² of gross lettable area. Nine of the 12 properties are high quality “big-box” type stores and six operate at mature occupancy levels.

Stor-Age's UK portfolio which is made up of the Storage King business also performed well during the reporting period. 

The UK portfolio's occupancy increased by 4,000m² year-on-year and like-for-like occupancy by 1,300m². 

“The UK self storage industry experiences a more marked degree of seasonality, with occupancy peaking in the spring and summer months,” said Lucas.

“Accordingly, we anticipate some occupancy loss to come through over the UK winter months but remain on track to meet our full year expectations.” 

Storage King contributed R64m or 40% of the group’s total net property operating income.

Stor-Age expected 9% to 10% distribution growth for the full year to March 2019. 

The company's share price is down 7.5% year to date.