JSE-listed self-storage real estate investment trust Stor-Age has reported robust financial results for the 2024 financial year ended March 31, showcasing significant growth in rental rates and occupancy.

The company reported a 9.5% boost in rental rates and a 2.9% increase in occupancy rates, while same store rental income rose by 12.7% year-on-year in South Africa.

Occupancy in the Stor-Age portfolio of 54 owned properties grew by 8 700 m² compared to the prior year.

Speaking during the company’s year-end financial results presentation on June 18, Stor-Age CEO Gavin Mark Lucas attributed the growth to heightened consumer spending coupled with increased mobility, which had driven demand for self-storage services.

“We live in an age of capitalism and consumerism, where people are buying goods and services at a faster rate than ever seen before in the history of mankind,” Lucas explained.

“People then become attached to their possessions, and then life-changing events drive a need for people to then put their valued possession somewhere. At the same time, we have the increasing mobility of the population alongside increasing densification in urban areas. Commercial customers, typically small- to medium-sized enterprises like the product because of its flexibility, both in respect of the space requirement as well as the underlying length of the lease. These factors combined drive the underlying need or demand for the product of self-storage,” he explained.

The company’s UK portfolio also performed positively, albeit not to the same degree as the South African business.

“After three years of superb growth in our UK business, the macro environment presented some challenges, with high interest rates and inflationary pressures. In spite of these challenges, our UK trading performance remained resilient, and we grew occupancy in our portfolio of 26 properties by 2 000 m²,” Lucas said.

Average rental rates increased by 4.7% and average occupancy was 1.6% lower, resulting in same store rental income growth of 3% in the UK.

Overall, same store rental income grew by 15.4% year-on-year.

Highlighting strategic advancements, Lucas noted Stor-Age had opened or acquired 12 trading properties under the existing joint venture (JV) structures, adding 72 500 m² of gross level area (GLA) on full fit-out.

Stor-Age also added four new properties to its third party management platform in the UK shortly after the year end.

Meanwhile, management fees increased by 75% to R63.1-million.

“The high interest rate environment saw us absorb a 46% increase in net finance costs, resulting in the full-year dividends of 118.17c being broadly in line with the prior year,” Lucas said.

To date, Stor-Age has committed more than R500-million of capital to its South African and UK JV initiatives, with the majority of this investment taking place over the last two financial years.

The year-end loan-to-value ratio was 31.4%, with 85% of the company’s net debt subject to interest rate hedging. The balance sheet was further enhanced by a R500-million debt auction conducted shortly after year-end.

Stor-Age’s portfolio comprises 103 trading properties, providing storage space to more than 51 000 customers. The combined value of the portfolio, including proxies managed under JVs, amounted to R17.3-billion at year-end, with the maximum lettable area, including the pipeline and ongoing developments, currently at more than 650 000 m².