JSE-listed self-storage real estate investment trust Stor-Age has reported strong results for the 2025 financial year, ended March 31, demonstrating the resilience of its business, with key operating metrics showing growth despite a challenging environment.

The company reported a 4.1% increase in distributable income per share to 123.01c, with a final dividend declared of 53.56c a share.

“The results for the period once again demonstrate the resilience and strength of our operating model,” CEO Gavin Mark Lucas said during the company’s financial results presentation on June 17.

He explained that the company’s South African portfolio continued to outperform, with rental income and net property operating income having increased by 10.2% and 11.1% year-on-year, respectively.

Average occupancy and rental rates also increased by 2.1% and 7.9%, respectively, with occupancy in the same store portfolio of owned properties having grown by 7 500 m² year-on-year.

After a challenging 2024 financial year, Lucas noted that the company delivered an equally pleasing set of results for the period in the UK, with same-store rental income increasing by 6.5%, and average occupancy and rental rates up 3.5% and 2.9% year-on-year, respectively.

Occupancy in the UK portfolio increased by 1 700 m² year-on-year and net property operating income was up 5% year-on-year.

Net property operating income increased by 8% year-on-year, reflecting both revenue growth and an ongoing focus on controlling costs and improving operating margins, said Lucas.

The company’s loan-to-value ratio was 31.3% at period-end, with 84.2% of net debt subject to interest rate hedging.

Lucas explained that there had been little to any meaningful economic growth in the respective economies over multiple periods.

He noted that, while there were many factors that had contributed to the company’s relatively attractive performance, the strong levels of underlying demand had provided the foundation for the performance over multiple periods and through different economic cycles.

“Self-storage is a growth sector globally in first and developing world economies. Driven by consumption-led economies, consumerism, ever-increasing densification and mobility and underpinned by a powerful need that sustains performance through the economic cycle”.

Over the past two years, Stor-Age has completed 12 new developments, six each in South Africa and the UK.

Each of these developments were completed in joint venture (JV) structures, where Stor-Age partners with institutional or private equity capital, enabling the company to acquire, develop, operate and manage assets across multiple locations.

In the financial year under review, the company opened two new developments in South Africa, one in Century City, Cape Town, and another in Kramerville, Johannesburg, and one development in the UK, located in Leyton in east London.

In addition, Stor-Age added four new third-party-managed properties in the UK and acquired an existing operator in South Africa, Extra Attic, located near Cape Town Airport.

Post year-end, in June, the company opened a new £25-million property in Acton, West London in JV with Moorfield.

Moreover, following Stor-Age entering into a third-party management agreement with Hines earlier in the year to manage the acquisition of a three-property portfolio in the UK, the two companies have now also partnered on five additional development projects.

Hines is a privately owned global real estate investment manager overseeing about $90-billion in assets across multiple property sectors.

Stor-Age’s development pipeline at year-end consisted of 18 active projects at various stages of planning and completion, amounting to over 83 000 m² gross lettable area.

OUTLOOK

Meanwhile, the company said it remains focused on enhancing operational performance and driving growth across both South Africa and the UK, supported by a strong and flexible balance sheet, disciplined capital allocation, moderate leverage and robust operating margins.

In South Africa, Stor-Age expects an improved inflation outlook and a stabilising political climate, adding that recent interest rate cuts have created a favourable environment for further growth.

Additionally, the company expects the UK self-storage sector to remain resilient, with moderate revenue growth supported by operational efficiencies, disciplined cost management and a strong focus on customer retention to protect operating margins.

The company says it is also well-positioned to expand through its third-party management platform, particularly on the development front.

Stor-Age expresses that its proven record in development and operational performance over the past three years has strengthened its credentials, enabling the company to continue growing the portfolio by partnering with institutional and private equity capital.

The board expects DIPS for the 2026 financial year to be about 5% to 6% higher year-on-year. The payout ratio is expected to remain at 90% of distributable income.

“Over the past decade, we have consistently demonstrated our resilience and the ability to deliver robust financial and operational performance despite encountering challenging macroeconomic headwinds in both markets.

“We will continue to deploy capital strategically, adding quality and scale to our high-quality portfolio on a select basis and in line with our strict investment criteria,” said Lucas in a media release.