JSE-listed real estate investment trust Stor-Age increased its divided by 10% year-on-year to R88.05 in the year ended March 31, and is expecting 9% to 10% dividend growth in the current financial year.

The company noted that its results were driven by a strong trading performance across the portfolio and the successful completion of the Storage RSA acquisition in February.

“Stor-Age’s performance reflects the recession-resilient nature of our self storage product. Demand remains strong as the underlying ‘need’ prevails,” said CEO Gavin Lucas.

He noted that the self storage market was holding steady in contrast to other property subsectors in South Africa.

During the year under review, Stor-Age’s occupancy, excluding Storage RSA, increased by 4 000 m².

Including Storage RSA, the increase in occupancy was 37 700 m², and the closing rental rate grew by 12.7% to R86.

The company achieved a 9.4% increase in the average rental rate achieved for the year.

Meanwhile, the Storage RSA acquisition had extended Stor-Age’s gross lettable area, while also offering a development opportunity in Bryanston for which town planning approvals are in hand.  
 
Further bolstering the group’s geographical footprint, Stor-Age opened three new Stor-Age branded properties in Durban and Johannesburg in its managed portfolio. 
 
Looking ahead, Lucas said the group would focus on driving occupancies, rental rate and cash flow, ensuring that revenue translates into earnings and dividend growth. 

Stor-Age is in the second year of its defined five-year growth plan to 2020 and is currently ahead of growth targets, he noted. 

Acquisition-wise, Lucas stated that the company’s short-term focus was on bedding down recent acquisitions to maintain consistent group standards and unlock maximum value.
 
“In line with our strategy, our healthy balance sheet opens the opportunity for continued organic and acquisitive growth going forward. More than 80% of net debt is hedged and gearing stands at a conservative 12%.”