Stor-Age Property Reit raised R400m in a few hours in an accelerated bookbuild to fuel its acquisition pipeline.
The significantly oversubscribed bookbuild raised the equity at a
price of R12 a share, representing a 3.5% discount to the 30-day,
volume-weighted average traded price.
Initially seeking to raise R350m, demand for Stor-Age stock saw the
quantum of capital raised increase, despite the constrained domestic
environment and subdued JSE real estate investment trust (Reit) sector,
CEO Gavin Lucas said.
He said the capital raised will allow Stor-Age to take advantage of
new opportunities in the pipeline in both SA and the UK. These include
the recently opened Stor-Age Bryanston and an additional 12 properties
in SA, following the acquisition of a managed portfolio announced
earlier in September.
The portfolio includes locations such as Claremont in Cape Town;
Brooklyn and Silver Lakes in Pretoria; Mount Edgecombe in Durban; and
Sunninghill in Johannesburg. With the portfolio offering a combined
gross lettable area (GLA) of 86,300m² and occupancy levels of 73%,
post-acquisition Stor-Age’s property assets will increase to R5bn.
Stor-Age is one of only nine publicly traded self-storage Reits globally.
“Self-storage is a niche, specialised asset class which is not
subject to the same macro-economic factors that drive demand and supply
dynamics for traditional Reits. Self-storage benefits from having a
consistent level of demand throughout the different economic cycles.
It’s this consistent level of demand that sustains the performance of
the assets through the economic cycle,” said Lucas.
In November 2017, the company made a strategic entry into the UK
self-storage market with the acquisition of Storage King, the sixth
largest UK self-storage brand.
“Despite the uncertainty created by Brexit, self-storage as a
sub-sector of the commercial property market continues to trade
positively in the UK,” said Lucas.
The company now trades from and manages a combined portfolio of 74
properties across SA and the UK — 64 trading and 10 new developments —
covering a GLA of more than 413,000 m².
Momentum Investments’ head of property Nessi Chetty
said
Stor-Age was an attractive company among listed real estate groups and
that it was trading at forward yield under 9%. “Stor-Age acquired the
managed portfolio from Growthpoint, Storage Property Holdings and
Fairstore Trust. It is a highly geared portfolio with a loan-to-value of
95%. It includes 12 properties valued at R1.12bn. The bookbuild
proceeds will bring that LTV down to 64%.”
andersona@businesslive.co.za
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