Resilient Stor-age raises dividend


Resilient Stor-age raises dividend

Published Date: 2019-06-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

Resilient Stor-age raises dividend

The self-storage property group expects next year's dividend to be 7%-9% higher if conditions don't deteriorate.

Stor-age has again credited the defensive nature of its niche property proposition for helping it grow earnings under tough economic conditions in SA and the UK, where it has an increasing footprint.

The real estate investment trust (REIT) says self storage is cyclically resilient so while the property sector might be under pressure, it continues to do well in both markets. The year to end-March was characterised by a severely constrained SA economy with low GDP growth and the continued economic uncertainty in the UK as a result of its protracted withdrawal from the EU. Over the period, it grew organically, while integrating recent acquisitions.

Since its listing in November 2015, the value of its portfolio has increased by 360% to R6 billion and its market capitalisation has increased by 286% to R5.4 billion. Its portfolio comprises 65 self-storage properties across SA and the UK. In the UK, a further 12 trade under the licence of its Storage King Brand and generate licence and management fee revenue, making Stor-age the sixth largest player in the UK market.

Last year, the gross leasable area (GLA) of its property portfolio increased by a third to 423,700m2, which is 83.5% occupied. In addition to completing its new development in Bryanston, it said it successfully closed four acquisitions, including its managed portfolio of 12 properties and three new trading properties. The three new SA properties, acquired for future developments, are in prime locations and will add an additional 20,000m2 in GLA to its portfolio once developed.

Rental income rose by 63.2% to R482 million in the year to end-March and net property operating income came in 65.2% higher at R385 million. It's increased its total dividend for the year by 9.1% to 106.68c per share.

The REIT expects to grow its 2020 dividend by between 7% and 9%, assuming that demand for self-storage remains at current levels, electricity supply remains stable and that it is able to absorb rising utility costs and municipal rate charges.

Its shares rose 0.4% to R13.80 yesterday.

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