JSE REIT Stor-Age, South Africa’s leading and largest self storage property fund, has today announced the acquisition of a regionally dominant four-property portfolio in the UK, while also successfully raising R575 million in a significantly oversubscribed accelerated bookbuild.
The bookbuild saw R575 million of equity raised at a price of R14.30 per share, representing a 0.92% discount to the 30-day volume weighted average traded price.
The capital raised will support the finalisation of the UK acquisition, while also enabling the group to continue taking advantage of development and acquisition opportunities in both South Africa and the UK. The acquisition, secured at £37.5 million and consisting of a four-property portfolio offering 12 400m² of gross lettable area (GLA), has the potential to be expanded to approximately 18 900m² on a fully fitted-out basis.
Stor-Age continues to deploy capital strategically, adding quality and scale to its high-quality portfolio of self-storage assets in both markets. Despite the tough trading conditions and the continued impact of the COVID-19 pandemic, as one of only ten publicly-traded self-storage REITs globally, the company continues to demonstrate its resilience by delivering excellent operational and financial results.
The result of the accelerated bookbuild is a strong vote of confidence in the business and its strategy. Comments Stor-Age CEO Gavin Lucas, “We are pleased with the result of today’s capital raise, which once again demonstrates both the high regard in which Stor-Age is held and the significant appetite for the company’s stock. The capital raised will allow us to successfully continue with our strategy of growing our portfolio in both South Africa and the UK, adding quality and scale in both markets.”
The company’s South African pipeline consists of 10 properties, offering an estimated 59 200m² GLA at an approximate total cost of R850 million. In the UK, the pipeline consists of 4 properties offering an estimated 20 500m² GLA at an approximate total cost of £46 million.
Add Lucas, “Stor-Age and the self storage business model have a track record of resilience in constrained economic environments. The primary drivers of demand for our product are life-changing events and / or dislocation, be they positive or negative in nature. Maintaining a strategically well-placed and conservative balance sheet remains a priority for the company. Our LTV target range of 25% to 35% allows for the consistent execution of the strategy in both South Africa and the UK.”
In a trading update for the third quarter ended 31 December 2021, Stor-Age confirmed that total occupancy in the same store portfolio increased by 10 500m² (2.6%), whilst the closing average rental rate increased by 1.6% (annualised 6.3%) and 1.5% (annualised 6.0%) in SA and the UK respectively.
The group continues to be well-positioned to benefit in the medium to long-term from the rapid acceleration of change brought about by the pandemic.
The share closed yesterday at R14.88.