Stor-Age Property, the only JSE-listed personal storage space provider, has raised R250m by issuing new shares as it looks to make more acquisitions in SA and the UK.
CEO Gavin Lucas said the group was experiencing rising demand for storage space as people needed to store goods for longer during the lockdown.
Customers often included those looking to move house soon and people who had bought equipment for holidays and projects but could not use those goods while the lockdown restricted on their movement and work.
Stor-Age raised the R250m of equity through an “accelerated bookbuild” at R11.85 per share, representing a 4.3% discount to the 30-day volume weighted average traded price.
“The capital raised will allow Stor-Age to continue taking advantage of development and acquisition opportunities in both SA and the UK,” Lucas said.
About R4.1bn worth of Stor-Age’s assets are in SA and about R2.7bn are in the UK.
“These are certainly very challenging times for all SA businesses. The local real estate investment trust sector has been under significant pressure for some time. When taking this into consideration, it certainly does put the success of today’s raise into perspective,” he said.
Lucas said that in 2020 Stor-Age was focused on acquiring trading properties from third parties.
The group's next development project would soon start in the UK.
“On March 19, Stor-Age entered into a non-binding heads of terms with a UK-based specialist private equity group to form a joint venture to develop a five- to seven-asset portfolio with a gross asset value of approximately £50m,” Lucas said.
Earlier this week, Stor-Age released a trading statement saying it was in a healthy financial position before and after Covid-19 hitting SA.
The company’s local portfolio closed at 85% occupancy in the first quarter of the year, with the rental rate rising 6% year on year. Occupancy for its UK business was at 78.8%.
Stor-Age expects full-year distributable earnings to rise 13.5% to R440m. It was on track to deliver a full-year dividend to rise 5% to about 112c.
In April, the company collected 92.2% of rental due in SA and 98% in the UK.
“Stor-Age entered the current cycle from a position of strength. We continue to benefit from a high quality property portfolio spread across both SA and the UK, a very well managed balance sheet and deep sector specialisation,” Lucas said.
The group's loan-to-value is sitting at about 30%, before taking account of the R250m equity capital raise.
Lucas said the group had a strong liquidity position, with R246m in cash and R654m of undrawn credit facilities in hand as well.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.