JSE-listed self storage property fund Stor-Age has exceeded all of its prelisting forecasts in its maiden financial year-end results, delivering a 4.7% higher distribution than forecast on listing at 30c a share, or R39-million, during the period to March.
Since listing on the Johannesburg bourse in November, the self-storage real estate investment trust (Reit) delivered strong trading results, which saw an increase in occupancy rates, higher average rental rates, reduced borrowings and prudently managed gearing levels.
“On the back of strong demand, evidenced through 11% annualised escalations and growth in portfolio occupancy to 86%, rental income of R54.9-million came in 3% higher than forecast,” CEO Gavin Lucas said on Tuesday.
The Reit’s rental rate increased 11.4% annualised from R72.60 m2 at listing to R76.30 m2 at year-end, while occupancies closed at 155 700 m2 or 86%, which compared favourably with the 151 777 m2 or 82.7% disclosed in the November listing prospectus, with some 14 300 tenants across the portfolio.
“While the global benchmark for a mature portfolio is 80%-plus occupancy, we remain intent on improving our overall portfolio occupancy to 90%, which we believe is optimal,” he said.
Stor-Age’s portfolio of 33 branded and managed properties covered about 245 000 m² of gross lettable area (GLA) – 24 of which were owned and operated representing 181 342 m2 and R1.4-billion in value – concentrated in the four major cities of Johannesburg, Pretoria, Cape Town and Durban.
Now the company planned to embark on a R44-million development plan as it aimed to expand further, with four new high-quality developments under way in Sunninghill, Essexwold and Randburg, in Gauteng, and Berea, in Durban.
A 5 500 m² GLA expansion was also in the works at Stor-Age’s Gardens and Durbanville properties.
During the four-and-a-half months to March 31, the Reit had “prudently managed” its gearing, which now stood at 8.7%.
The company also had access to an additional R521-million in drawdown from Nedbank, while 84% of Stor-Age’s R119-million net debt was fixed for a further two years and eight months.
The group expected dividend growth of 10% for the year ahead to March 2017.