PRETORIA – Stor-Age, the only JSE-listed self story property fund, has raised R400 million through a significantly oversubscribed bookbuild.
The equity was raised on Wednesday at a price of R12 a share, which represented a 3.5 percent discount to the 30-day volume weighted average traded price.
Stor-Age was initially seeking to raise R350m but increased the quantum of the capital raise because of demand for the company’s stock.
The company said yesterday (thurs) the capital raised was a strong vote of confidence for management’s strategy, with the capital raised allowing it to take advantage of new opportunities in the pipeline in both South Africa and the UK.
It said these included the recently opened Stor-Age Bryanston and an additional 12 properties located in key locations across South Africa following the acquisition of the managed portfolio announced earlier this month.
The acquisition of the managed portfolio on completion will increase the value of Stor-Age’s property assets to R5bn.
It comprises a combined gross lettable area of 86 300m2 and occupancy levels of 73 percent in self storage properties in locations such as Claremont in Cape Town, Brooklyn and Silver Lakes in Pretoria, Mount Edgecombe in Durban and Sunninghill in Johannesburg.
Gavin Lucas, the chief executive of Stor-Age, one of only nine publicly-traded self storage real estate investment trusts (Reits) globally, said it would be extremely difficult in today’s market to replicate a portfolio of properties like those in the managed portfolio because the barriers to entry were high.
Lucas added it took a total of about eight to 10 years from site identification to trading at a mature occupancy level for just one prime self storage asset.
He said self storage as a sub-sector of the commercial property market continued to trade positively in the UK despite the uncertainty created by Brexit, with their Storage King brand continuing to deliver in line with their forecasts.
“We remain excited about the growth prospects for our UK platform,” he said.
Stor-Age made a strategic entry into the UK self storage market in November last year with the acquisition of Storage King, the sixth largest UK self storage brand.
The company now trades from and manages a combined portfolio of 74 properties across South Africa and the United Kingdom, comprising 64 trading and 10 new developments covering a gross lettable area of more than 413 000m2.
The trading portfolio in South Africa is concentrated in Johannesburg, Cape Town, Pretoria and Durban while the UK portfolio has a bias towards the East and South-East of England.