SA’s largest listed personal storage provider, Stor-Age Property, increased its annual payout after reporting larger rental and net property income in its latest year-end results thanks to the ever-present demand for self-storage.
The real estate investment trust (Reit), valued about R6.4bn on the JSE, declared a 5.6% higher year-on-year total dividend of 118.14c, in line with its revised guidance of 5%-6% growth to end-March.
This was in part due to the demand for self-storage being driven by various sources and the need for it in most economic cycles.
“Demand is underpinned by life-changing events and dislocation, whether positive or negative, and customers use our product for various reasons across economic cycles. Positive structural trends accelerated by the pandemic continue to bolster demand,” the company said.
As a result, rental income rose 17.3% to R1.07bn and net property operating income 15.3% to R790.6m as portfolio occupancies improved to 92.2% in SA and 85.4% in the UK.
Stor-Age’s portfolio comprises 93 trading properties, 57 in SA and 36 in the UK, valued at R12.9bn with a gross lettable area (GLA) of 620,000m², about the size of 87 soccer pitches, serving 49,000 customers. Six developments are set to be completed in the new financial year, with three in SA and three in the UK.
The improved performance was despite a year characterised by global economic uncertainty as high inflation, interest rate hikes and ongoing geopolitical tensions led to the threat of a possible recession. Meanwhile in SA, the power crisis has affected many businesses and individuals continues.
“While SA’s socioeconomic circumstances are well documented, the UK also faced its own array of challenges, including persistent double-digit inflation and domestic political drama, which unsettled financial markets,” Stor-Age said.
“Though not immune to economic shocks and volatility, the self-storage sector has displayed remarkable resilience in coping with economic stresses, as evidenced during the global financial crisis and the Covid-19 pandemic,” it added.
The board expects to deliver a dividend of 115-121c in 2024 as it aims to maintain its 100% payout ratio amid a volatile macroeconomic environment if load-shedding remains largely below level 4 and interest rates go up by no more than 50 basis points in SA and 25 basis points in the UK.
“Looking ahead to the 2024 financial year, it becomes even more challenging to predict the economic landscape and the potential macroeconomic and geopolitical outcomes that may affect customer demand and behaviour,” Stor-Age said.
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.