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STOR-AGE PROP REIT LTDSTOR-AGE PROP REIT LTDSTOR-AGE PROP REIT LTD

STOR-AGE PROP REIT LTD

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Our opinion on the current state of STOR-AGE(SSS)Storage (SSS) is the JSE's only real estate investment trust (REIT) which specialises in buying and running domestic storage facilities in all major South African cities and in the UK. Its business is split about 60% in South Africa and 40% in the UK. It expects its UK business to exceed the South African business in due course. The company owns 103 properties worth R17,3bn. The business of Stor-age tends to do well in recession as well as in boom periods of the economy. The average client keeps his storage unit for 2 years. The client base is widely diversified and very stable from a statistical point of view. The company's foray into the UK demonstrates its ability to find appropriate properties and add them to its portfolio. It also gives the share a rand-hedge element. In its results for the six months to 30th September 2024 the company reported distributable income up 3,5% and rental income up 10,8% in South Africa. The company's loan-to-value (LTV) was 31,3% and headline earnings per share (HEPS) increased by 174%. The company said, "We expect our SA portfolio to continue its positive growth trajectory for the remainder of the financial year and we remain cautiously optimistic that our UK portfolio will deliver a robust set of results for the full financial year." We believe that this is one of the best property investments available on the JSE. It offers a steady growth and minimal risk. Technically the share was rising steadily until April 2022 then it began a downward trend which ended in October 2023. Now moving up again, this share represents a potential buying opportunity in our opinion. On 13th May 2024 the company announced that it had entered into a 3rd party agreement with Hines to manage their self-storage business in the UK.
JSE:SSS
by PDSnetSA
Our opinion on the current state of STOR-AGE(SSS)Stor-Age (SSS) is the JSE's only real estate investment trust (REIT) specializing in buying and running domestic storage facilities in all major South African cities and in the UK. Its business is split about 60% in South Africa and 40% in the UK, with expectations that its UK business will eventually exceed the South African operations. The company owns 103 properties worth R17.3 billion. The business of Stor-Age tends to do well in both recession and boom periods of the economy. The average client keeps their storage unit for 2 years. The client base is widely diversified and very stable from a statistical point of view. The company's foray into the UK demonstrates its ability to find appropriate properties and add them to its portfolio, also giving the share a rand-hedge element. In its results for the year to 31st March 2024, the company reported rental income up 14.8% and a loan-to-value (LTV) of 31.4%. The company said, "Excellent strategic progress made in our JV structures during the year having opened or acquired 12 properties, representing 72,500m² GLA (SA 4; UK 8) - Third-party management agreement entered into with Hines (one of the largest privately held real estate investors and managers globally) post year-end to manage their recently acquired three-property self-storage portfolio in Kent, taking the total number of managed properties to 23 (SA 6; UK 17)." We believe that this is one of the best property investments available on the JSE. It offers steady growth and minimal risk. Technically, the share was rising steadily until April 2022, then it began a downward trend which ended in October 2023. Now moving up again, this share represents a potential buying opportunity in our opinion. On 13th May 2024, the company announced that it had entered into a third-party agreement with Hines to manage their self-storage business in the UK.
JSE:SSS
by PDSnetSA
Our opinion on the current state of STOR-AGE(SSS)Stor-Age (SSS) stands out as the only real estate investment trust (REIT) on the Johannesburg Stock Exchange (JSE) that specializes in the acquisition and operation of domestic storage facilities across major South African cities and the United Kingdom. Currently, the company's operations are distributed with approximately 60% in South Africa and 40% in the UK. Stor-Age anticipates that its UK business will eventually surpass its South African operations in scale. The company owns a total of 74 properties valued at R4.7 billion in South Africa and R2.9 billion in the UK. The self-storage sector has the unique characteristic of performing well during both economic recessions and booms. The average customer retention is about 2 years, indicating a stable and recurring revenue stream. The customer base is both diverse and statistically stable, which enhances the business's resilience. Stor-Age's expansion into the UK not only demonstrates its capability in identifying and integrating valuable properties into its portfolio but also adds a rand-hedge element to the investment, providing protection against currency volatility for investors. In the results for the six months ending on 30th September 2023, Stor-Age reported a 16.9% increase in property revenue, though headline earnings per share (HEPS) saw a decrease of 30.6%. The occupancy rate stood at 89.1%, and the company's net asset value (NAV) saw a rise of 7.2% to 1558c per share. The loan-to-value (LTV) ratio was reported at 31.9%. During this period, Stor-Age completed significant developments, including the acquisition of the four-property Easistore portfolio in the UK for £82.0 million through a joint venture (JV) with Nuveen Real Estate, where Stor-Age holds a 10% equity interest. Further developments include the completion of six new properties (four in South Africa and two in the UK) within their JV structures, which have commenced trading. The company also reported a robust development pipeline of over 66,000 m² gross leasable area (GLA), with 17 active projects at various stages of completion. A trading update up to 31st January 2024 indicated an improvement in occupancy rates in South Africa to 92.1%, with a significant increase in the owned portfolio by 9700 square meters and an average rental rate increase of 9.4% year-on-year. Stor-Age's performance and strategic initiatives make it a compelling investment option on the JSE. The company's ability to thrive in varying economic conditions, combined with its expansion and management strategies, present minimal risk with steady growth potential. Despite a downward trend in the share price beginning in April 2022 and ending in October 2023, the stock has since shown signs of recovery, marking a potential buying opportunity, especially with the recent announcement on 13th May 2024 about entering into a third-party agreement with Hines to manage their self-storage business in the UK. This move could further bolster Stor-Age's position in the market and enhance its growth trajectory.
JSE:SSS
by PDSnetSA
Our opinion on the current state of SSSStor-Age Property REIT Limited stands out on the Johannesburg Stock Exchange (JSE) as the premier real estate investment trust (REIT) dedicated to the self-storage sector, marking its unique position with operations spanning both South Africa and the United Kingdom. The strategic distribution of its portfolio, with a larger share in South Africa but significant and growing interests in the UK, underscores the company's broad vision and international expansion goals. This geographical diversity not only ensures a robust operational footprint but also introduces a rand-hedge component to the investment, enhancing its appeal to investors seeking exposure to international markets while mitigating currency risk. The resilience of the self-storage industry, with its capacity to thrive across economic cycles, provides Stor-Age with a stable and predictable revenue stream. This sector's performance is often counter-cyclical, seeing demand spikes during both economic booms and downturns, which speaks to the intrinsic need for storage solutions among a broad customer base. The company's strategic expansion through the acquisition of properties and development projects, notably the acquisition of the Easistore portfolio in the UK and the ongoing development pipeline, reflects a proactive approach to growth and market penetration. For the six months ending on 30th September 2023, Stor-Age demonstrated solid operational progress, evidenced by a 16.9% increase in property revenue. However, the period also saw a significant reduction in headline earnings per share (HEPS), which the company will need to address to reassure investors of its profitability and operational efficiency. Nonetheless, the increased occupancy rates and net asset value (NAV) growth are positive indicators of the company's underlying strength and market position. The trading update for the four months to 31st January 2024 further reinforces the positive trajectory, with notable improvements in occupancy rates and rental income in South Africa. These operational highlights, coupled with the company's strategic investments and development activities, position Stor-Age as a compelling investment proposition within the JSE's property sector. Stor-Age's recent performance and strategic initiatives paint a picture of a company with a clear vision for growth, both domestically and internationally. Its focus on the self-storage sector, a niche yet fundamentally robust and resilient market, sets it apart from traditional property investments. The company's ability to navigate economic fluctuations and capitalize on opportunities for expansion and development underscores its potential for sustained growth and value creation for shareholders. As Stor-Age continues on its growth trajectory, buoyed by strategic acquisitions and development projects, its investment case becomes increasingly compelling. The company's unique market positioning, combined with its proven resilience and strategic expansion, makes it an attractive option for investors seeking stable returns and exposure to a niche property sector with growth potential.
JSE:SSS
by PDSnetSA
Our opinion on the current state of SSSStorage (SSS) is the JSE's only real estate investment trust (REIT) which specialises in buying and running domestic storage facilities in all major South African cities and in the UK. Its business is split about 60% in South Africa and 40% in the UK. It expects its UK business to exceed the South African business in due course. The company owns 74 properties worth R4,7bn in SA and R2,9bn in the UK. The business of Stor-age tends to do well in recession as well as in boom periods of the economy. The average client keeps his storage unit for 2 years. The client base is widely diversified and very stable from a statistical point of view. The company's foray into the UK demonstrates its ability to find appropriate properties and add them to its portfolio. It also gives the share a rand-hedge element. In its results for the six months to 30th September 2023 the company reported property revenue up 16,9% and headline earnings per share (HEPS) down 30,6%. The occupancy was at 89,1% and the company's net asset value (NAV) increased 7,2% to 1558c per share. The loan-to-value (LTV) was 31,9% and the company said, "Six new properties (four in SA and two in the UK) completed in our JV structures and commenced trading - Completed the £82.0 million acquisition of the four-property Easistore portfolio in the UK through a JV with Nuveen Real Estate where Stor-Age holds a 10% equity interest - Development pipeline of over 66 000m² GLA, with 17 active projects at various stages of completion". We believe that this is one of the best property investments available on the JSE. It offers a steady growth and minimal risk. Technically the share was rising steadily until April 2022 then it began a downward trend which is still in progress. In our view this represents a potential buying opportunity.
JSE:SSS
by PDSnetSA