JOHANNESBURG – Stor-Age Property Reit eased marginally on the JSE on Tuesday despite the group reporting that it would declare a 9.1 percent dividend hike to 51.3c a share on the back of its uncanny ability to acquire and execute its asset management initiatives.
The stock closed 0.24 percent lower at R12.29 as Stor-Age said it managed to enhance its properties in the down cycle during the six months to end September.
The group said South African rental income and net property operating rose 17.4 percent (like-for-like 9.4 percent) and 14.2 percent (like-for-like 9.8 percent.)
Chief executive Gavin Lucas said Stor-Age’s growth trajectory was attributable to persistent focus on out-performance in its key focus areas, including revenue management, developments and acquisitions.
Lucas said the portfolio occupancy closed 72400m² up on September 2017 and total property revenue almost doubled to R225.8 million.
“We successfully completed the acquisition of the managed portfolio in the period, bringing on board an additional R1.12 billion portfolio, while the new Bryanston store was opened R1m under budget – and the Craighall development got underway,” he said.
Lucas said management was confident that its growth strategy and strong operating platforms would continue to drive attractive and sustainable earnings growth.
He said Stor-Age expected a 9 percent to 10 percent distribution growth for the full year to March 2019.
The group reported an 86 percent growth in operating profit to R166m.
It said that on a like-for-like basis – excluding Storage King and other South African acquisitions – rental income increased by 9.4 percent, driven by a 0.7 percent increase in average occupancy levels and an 8.7 percent increase in the average rental rate.
Closing rental rate excluding acquisitions grew by 8.7 percent to R93.5/m².
The group said it concluded the purchase of a R52m property in Cape Town’s northern suburbs in April to add 5 500m2 GLA to Stor-Age’s local portfolio. The managed portfolio, which it previously managed but did not own, added another 86300m² GLA.
The group said nine of the 12 properties were high-quality "big-box" type stores and six operate at mature occupancy levels.
Lucas said that paying particularly close attention to the company's balance sheet structure remained a priority.
He said the group managed to implement significant debt restructuring in South Africa and the UK, and had an oversubscribed R400m equity capital raise.
He said the UK portfolio delivered a strong operational performance, with occupancy increasing by 4 000m² year-on year and like-for-like occupancy by 1 300m².
Storage King contributed R64m to the group’s total net property operating income.