Stor-Age sees demand returning

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Stor-Age sees demand returning

Published Date: 2020-05-19 | Source: Stephen Gunnion | Author: Stephen Gunnion

Stor-Age sees demand returning

The specialist storage property fund says strong rental collections are evidence of the defensive and resilient nature of its business model.

Stor-Age says demand for its self-storage units rebounded this month after lockdown restriction in SA and the UK resulted in a drop in activity in March and April. And the specialist property fund says it is well-positioned to benefit in the medium to long term from the rapid acceleration in change brought about by the Covid-19 crisis.

The real estate investment trust believes the greater adoption of technology brought on by Covid-19 will result in an increasingly mobile population, with business models evolving to require less operational space. That should lead to incremental demand for its product.

Throughout the lockdown, its storage properties remained accessible to tenants under strict operating conditions, with a single member of staff per property. However, as of yesterday, all store managers in SA and the UK were expected to have returned to work to help manage the pent-up demand for space at its properties. It collected 92.2% and 98% of rental due for April in SA and the UK respectively and committed extra resources to collections due to the strain that the public was likely to come under as a result of the lockdown. It said the strong collections were evidence of the defensive and resilient nature of its business model.

Its SA portfolio ended the year to end-March at 85% occupancy, while the closing portfolio occupancy in the UK was 78.8%. It expects full-year distributable earnings to be around R440 million, up 13.5% from last year, with its dividend per share likely to be 5% higher at 112c.

Stor-age's shares rose 2.7% to R12.27 yesterday.





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