STOR-AGE Property Reit has entered into an exploratory relationship with Picup, a logistics software company that does “last mile” delivery solutions with crowd-sourced drivers. Photo: Supplied.
STOR-AGE Property Reit has entered into an exploratory relationship with Picup, a logistics software company that does “last mile” delivery solutions with crowd-sourced drivers. Photo: Supplied.

Stor-Age in exploratory relationship with ‘last mile’ software firm Picup

By Edward West Time of article published Nov 18, 2020

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CAPE TOWN - STOR-AGE Property Reit, the leading self-storage company in South Africa with operations in the UK, has entered into an exploratory relationship with Picup, a logistics software company that does “last mile” delivery solutions with crowd-sourced drivers.

Chief executive Gavin Lucas said their portfolio of well-located and secure properties in South Africa’s main cities happened to be right in the heart of where a significant majority of e-commerce deliveries are destined for.

Stor-Age’s traditional demand for spaces is driven by life-changing events, such as people wishing to move, people renovating or doing alterations, and small businesses that require additional storage space for various reasons.

Lucas said there were also “green

shoots of demand from entrepreneurs that were requiring space while launching new businesses”.

A pilot last-mile delivery hub had recently been launched at Stor-Age Craighall, in partnership with Picup, with the property able to cater for up to 500 parcels a day.

Picup typically provides its services into third-party logistics service providers, which, in turn, are commissioned to execute on the fulfilment leg of online retailers.

Stor-Age’s share price increased 8.9 percent to R13.31 on the JSE yesterday morning.

Lucas said Stor-Age performed well in the six months to the end of September, with rental and net property operating income surging 21.3 percent and 13.3 percent, respectively, while rental collections were at 96 percent in South Africa and 98 percent in the UK.

The group declared an interim dividend of 52 cents a share, slightly down from 54.89c at the interim stage in 2019.

There was no intention to lower the 100 percent dividend payout ratio at this stage.

The South African portfolio was valued at R4.5 billion and the UK portfolio, under the Storage King Brand, at R2.8bn.

The intention was to grow the UK portfolio to about 50 percent of the group portfolio over the medium term.

The value of Stor-Age’s 71 properties increased during the period by R529 million to R7.6bn at September 30. Occupancy stood at 86.2 percent in South Africa and 85 percent in the UK.

In South Africa, occupancy had increased sharply in the last four months of the period after the easing of lockdown restrictions. A focus on the second half would be “to push hard to fill out the remaining spaces.”

Bad debt as a percent of rental income was at 2.2 percent, which the group hoped to reduce to 1.5 percent by the end of the second half.

In the UK, demand also came back strongly in the last four months, and there had been no deterioration in cash collections.

The strategy to 2025 anticipated growth through acquisitions, new developments and third party managed contracts.

The development pipeline in South Africa comprises about R740 million of new properties, and construction had recommenced at Tyger Valley (Cape Town) and Cresta (Johannesburg) in June, while in the same month the first phase of construction of a second development commenced in Cape Town in Sunningdale.

Last month, Stor-Age finalised a joint venture with UK real estate fund manager Moorfield, to develop self-storage assets with an initial value of approximately £50m (R1.02bn), with potential to increase to more than £100m.

BUSINESS REPORT

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