Stor-age Property Reit Ltd. · JSE:SSS
Stor-age Property Reit — FY2024 Earnings Presentation
75 slides from Stor-age Property Reit's earnings presentation, June 2024
Slide 1: Annual Results Presentation
STOR-AGE PROPERTY REIT ANNUAL RESULTS PRESENTATION YEAR ENDED 31 MARCH 2024 STOR-AGE PROPERTY REIT LIMITED 1
Slide 2: Presentation Outline
PRESENTATION OUTLINE Page Introduction 4 Financial review 13 Joint venture partnerships 23 Acquisitions and developments 28 Third-party management 32 Environmental, social and governance 35 Outlook 38 STOR-AGE PROPERTY REIT LIMITED 2
Slide 3: Annexures
ANNEXURES Page A: Key financial and operational highlights 40 B: Share price performance 42 C: Investment case 44 D: The market 45 E: Strategy and portfolio 50 F: SA property 55 G: UK property 59 H: Operations 63 I: Environmental, social and governance 71 STOR-AGE PROPERTY REIT LIMITED 3
Slide 4: Introduction
INTRODUCTION STOR-AGE PROPERTY REIT LIMITED 4
Slide 5: Highlights
HIGHLIGHTS Full year dividend 118.17 cents per share Total return of 13.3%¹ Rental income and net property operating income up 14.8% and 14.4% respectively Same-store rental income up 15.4% (SA 12.7%; UK 3.0%) Same-store achieved rental rate up 9.5% SA and 4.7% UK Occupancy up 10 700m² (SA 8 700m²;
Slide 6: Snapshot
SNAPSHOT Listing date November 2015 JSE sector Speciality REITs Profile Highly specialised, low risk, income paying self storage REIT Self storage 11 publicly traded self storage REITs universe (US: 5, UK: 2, EU: 1, Aus: 2, SA: 1) Market R6.4 billion1 capitalisation Total South Africa United Kingdom
Slide 7: Why Self Storage?
WHY SELF STORAGE? Resilient Diversified Stable cash Growth Attractive sector and customer and flows opportunity shareholder increasing asset base returns and demand diversification benefits • Needs-based • No material tenant • Attractive • Development • Self storage – sector and concentration risk o
Slide 8: Why Stor-Age?
WHY STOR-AGE? Experienced Diversified Flexible Operational Solid balance management and growing structure and excellence sheet team portfolio partnerships • Executive team • Consistent • Executing growth • Highly sophisticated • Global credit co-founded growth of our strategy through dual-market pla
Slide 9: Granular and Stable
GRANULAR AND STABLE Properties Customers Markets Revenue 80 / 5% 51 000 + R12.6bn / 103 R1.21bn / 20% With 80 properties classified 51 000+ customers across Portfolio value¹ R12.6 billion Property operating revenue as owned, no property is all demographics (SA 45%; UK 55%) and total of R1.21 billion
Slide 10: Flexible Ownership Structure
FLEXIBLE OWNERSHIP STRUCTURE Country Brand Wholly-owned 54 80 26 Joint venture 5 17 12 Managed 1 6 5 Total properties 60 103 43 STOR-AGE PROPERTY REIT LIMITED 10
Slide 11: Growth Channels
GROWTH CHANNELS Building out / Acquiring Developments in Third-party expanding properties joint venture management properties partnerships • In the past six years, the group has opened 13 new properties (SA 9; UK 4) and acquired 24 trading properties (SA 4; UK 20), collectively adding 200 000m2 GLA
Slide 12: Committed to Sustainability
COMMITTED TO SUSTAINABILITY Social Environmental 12 58% Third year supporting 12 previously disadvantaged 58% of owned properties have solar PV systems installed learners in a 12-month learnership programme 480m² R42 million ‘Community investment’: Approximately 32 R42 million invested in renewable
Slide 13: Financial Review
FINANCIAL REVIEW STOR-AGE PROPERTY REIT LIMITED 13
Slide 14: Financial Metrics
FINANCIAL METRICS 9.5% SA 92.1% SA 13.9% SA 118.17 4.7% UK 83.5% UK 1.1% UK Full year dividend Achieved rental Closing Net property per share rate growth occupancy operating income In line with guidance Same-store year-on-year Occupancy gains in Same-store year-on-year growth FY24 of 8 700m2 SA grow
Slide 15: Trading Results
TRADING RESULTS FY24 FY23 SA UK SA UK SA UK Rm £’000 Rm £’000 +/- +/- Rental income Self storage 575.4 22 335 507.2 21 692 13.5% 3.0% Other 10.9 891 9.4 946 16.3% (5.8)% SA same-store: Ancillary income 23.7 2 295 21.1 2 278 12.1% 0.7% Occupancy +2.9% and rental +9.5% Sundry income 1.7 199 1.9 222 (1
Slide 16: Occupancy Summary
OCCUPANCY SUMMARY 31 Mar 24 31 Mar 23 OWNED PORTFOLIO GLA m2 Occupied m2 % Occupied GLA m2 Occupied m2 % Occupied SA Same-store 388 100 357 300 92.1% 383 800 349 800 91.1% Non same-store 3 800 3 700 97.7% 3 300 2 500 77.3% Total SA 391 900 361 000 92.1% 387 100 352 300 91.0% UK Same-store 111 000 92
Slide 17: Portfolio Analysis and Customer Profile
PORTFOLIO ANALYSIS AND CUSTOMER PROFILE Portfolio analysis (number of properties) SA UK Total Freehold 51 18 69 Leasehold 3 8 11 Total – own properties 54 26 80 Managed properties 6 17 23 Total – trading properties 60 43 103 Under development 2 2 4 Total – including properties under development 62 4
Slide 18: Distribution Analysis
DISTRIBUTION ANALYSIS 31 Mar 24 31 Mar 23 SA UK Total Total +/- +/- Rm £m Rm Rm Rm % Net property operating income (NPOI) 468.6 18.0 893.4 773. 4 120.0 +15.5% NPOI growth: Waterfall – loss of revenue claim 10.5 - 10.5 10.5 - - SA = 14.8% Other income 0.5 - 0.5 6.6 (6.1) -92.4% UK = 1.1% in GBP terms
Slide 19: Balance Sheet – Summarised
BALANCE SHEET – SUMMARISED R million 31 Mar 31 Mar 31 Mar 31 Mar 2024 2023 2024 2023 ASSETS LIABILITIES Non-current assets Non-current liabilities Investment properties 11 310 10 398 Bank debt 3 887 3 390 SA Freehold 5 243 4 994 ZAR 1 426 1 188 SA Leasehold 169 174 GBP 2 461 2 202 UK Freehold 5 449
Slide 20: Property Valuations
PROPERTY VALUATIONS VALUATION BREAKDOWN Average value Rm % of portfolio Discount rate Exit cap rate per m² SA Freehold and long leasehold 5 243.2 96.9% Short leasehold 169.3 3.1% Total 5 412.5 100.0% 13 425 14.29% 8.67% Trading properties 5 302.3 98.0% Held for development 110.2 2.0% Average value p
Slide 21: Net Asset Value per Share
NET ASSET VALUE PER SHARE Rm 31 Mar 24 31 Mar 23 Net assets 7 534.0 7 136.2 Less: Goodwill and intangible assets (160.9) (156.0) Tangible net asset value (TNAV) 7 373.1 6 980.2 Deferred tax relating to UK investment property revaluations 435.7 369.1 Adjusted TNAV 7 808.8 7 349.3 Number of shares in
Slide 22: Capital Structure
CAPITAL STRUCTURE ZAR facilities GBP facilities Total facilities Rm £m Rm Total debt facilities 2 035.0 113.6 4 739.6 R500m debt auction raise Undrawn debt facilities 443.6 9.1 657.6 in April 2024: Gross debt 1 591.4 104.5 4 082.0 R300m 3-year at 3m Cash on hand Jibar + 132bps 223.9 3.5 308.9 Net de
Slide 23: Joint Venture Partnerships
JOINT VENTURE PARTNERSHIPS STOR-AGE PROPERTY REIT LIMITED 23
Slide 24: Joint Ventures – The Model
JOINT VENTURES – THE MODEL Several JV partnerships have been established in SA and the UK in recent years to acquire and develop new properties. Overview • At year end › JV investments value: R705.9 million (FY23: R422.0 million), with R103.3 million in SA and R602.6 million in the UK › Trading prop
Slide 25: Joint Ventures – South Africa
JOINT VENTURES – SOUTH AFRICA JV with Nedbank (NPP) established in FY22 • Four new developments completed in FY24 • Total GLA: 23 800m² upon full fit-out • Estimated development cost: R375 million Nedbank • Equity interest: Stor-Age and NPP each hold 50% Property Partners Kramerville property develo
Slide 26: Joint Ventures – UK
JOINT VENTURES – UK JV portfolio overview (established 2021) • Focus areas: London (and commuter towns), South East, and key regional towns/cities • Stor-Age equity interest: 24.9% • Total JV commitments: Approximately £125.0 million for acquisitions and new developments Portfolio details Moorfield
Slide 27: Joint Ventures – Portfolio Summary
JOINT VENTURES – PORTFOLIO SUMMARY The table below summarises the JV property portfolio: New New Acquired GLA on full developments developments Pipeline Total Trading fit-out (m²) Trading In progress SA NPP 4 1 - - 5 29 200 Garden Cities 1 - - - 1 6 300 Rabie - 1 - - 1 6 100 Total 5 2 - - 7 41 600 U
Slide 28: Acquisitions and Developments
ACQUISITIONS AND DEVELOPMENTS STOR-AGE PROPERTY REIT LIMITED 28
Slide 29: Acquisitions and Developments
ACQUISITIONS AND DEVELOPMENTS Overview • Organic growth through expanding existing stores, acquisitions, and development opportunities • In-house development expertise, disciplined yet opportunistic approach to meet risk-adjusted yield expectations • Complex, time-consuming town planning and approva
Slide 30: New Developments
NEW DEVELOPMENTS Project Completion Property Region Country Status GLA Cost date Century City Cape Town SA Under construction – Rabie JV R96m 6 100m² June 2024 Kramerville Johannesburg SA Under construction – Nedbank JV R75m 5 400m² July 2024 De Waterkant Cape Town SA In planning TBC 6 600m² TBC San
Slide 31: Extensions and Redevelopments
EXTENSIONS AND REDEVELOPMENTS Project Completion Property Region Country Status GLA Cost date Parklands Cape Town SA Expansion – planning permission received R50.3m 3 200m² Q1 FY26 Huddersfield North East UK Expansion – planning permission received TBC 22 000 sqf TBC Wakefield Yorkshire UK Expansion
Slide 32: Third-Party Management
THIRD-PARTY MANAGEMENT STOR-AGE PROPERTY REIT LIMITED 32
Slide 33: Third-Party Management
THIRD-PARTY MANAGEMENT Overview • Third-party management allows for growth in revenue with minimal capital investment and is key to our growth strategy • In the UK, we provide this through our Management 1st offering, aimed at independent operators, developers and private equity owners • This year w
Slide 34: Kent Space – Third-Party Management Contract
KENT SPACE –THIRD-PARTY MANAGEMENT CONTRACT Portfolio acquisition by Hines (May 2024) • Three high-quality properties in Ebbsfleet, Chatham, and Ashford (Kent) • Hines: A global real estate investment, development, and management firm operating in 30 countries with $94.6 Ebbsfleet billion¹ of assets
Slide 35: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STOR-AGE PROPERTY REIT LIMITED 35
Slide 36: ESG
ESG Strategy and framework • Aligns our Vision and Core Values with relevant UN Sustainable Development Goals (SDGs) • Takes guidance from the Task Force on Climate-related Financial Disclosures (TCFD) • ESG framework: Facilitates monitoring of our impact on the economy, workplace, social environmen
Slide 37: Typical Property
TYPICAL PROPERTY Stor-Age develops environmentally-friendly buildings with low environmental impact. ESG and sustainability remain key areas of focus. Solar PV & battery energy storage systems Properties with solar capacity – 57 Properties with hybrid solar PV systems – 20 Solar power generated to d
Slide 38: Outlook
OUTLOOK • Trading results › SA: Exceptionally strong › UK: Resilient performance despite high interest rates and inflationary pressures • Macro environment › Continued uncertainty with no relief from high interest rates › Persistent geopolitical tensions and conflicts › SA elections leading to coali
Slide 39: Annexures
ANNEXURES A. Key financial and operational highlights B. Share price performance F. SA property G. UK property C. Investment case H. Operations D. The market I. Environmental, social and governance E. Strategy and portfolio STOR-AGE PROPERTY REIT LIMITED 39
Slide 40: Key Financial and Operational Highlights
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS Annexure A 31 March 31 March +/- +/- 2024 2023 CER1 Property operating revenue2 Group (R million) 1 210.8 1 047.5 +15.6 +7.6% SA (R million) 607.3 535.2 +13.6% UK (£ ‘000) 25 634 25 048 +2.3% Net property operating income (NPOI)3 Group (R million) 893.4 773.3
Slide 41: Key Financial and Operational Highlights (continued)
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS (CONTINUED) Annexure A 31 March 31 March +/- 2024 2023 Number of properties – owned portfolio 80 80 - Number of properties – owned and managed 99 87 +12 2 Closing occupancy m – owned portfolio Group 453 700 443 000 +2.4% SA 361 000 352 300 +2.5% UK 92 700 90
Slide 42: Share Price Performance – Relative to SAPY
Indexed price 30 50 70 90 110 130 150 170 Nov-15 Jan-16 Ma r-16 Ma y-16 Jul-16 Sep-16 1. Bloomberg, as at 31 May 2024 Nov-16 Jan-17 Ma r-17 Ma y-17 Jul-17 Sep-17 Nov-17 Jan-18 Ma r-18 Ma y-18 Jul-18 Sep-18 Nov-18 Volume Jan-19 Ma r-19 Ma y-19 Jul-19 Sep-19 Nov-19 Jan-20 Ma r-20 Monthly Ma y-20 Jul-2
Slide 43: Share Price Performance – Relative to UK Peers
SHARE PRICE PERFORMANCE – RELATIVE TO UK PEERS Annexure B Share price performance in GBP since listing in 2015 Stor-Age has a c.50% exposure to GBP assets through Storage King Stor-Age is entrenched in the UK market. This geographic underpin is coupled with an attractive yield spread relative to UK
Slide 44: Investment Case
INVESTMENT CASE Annexure C • Resilient and growing › Niche growth sector driven by societal trends such as consumerism, e-commerce growth, urban Global growth densification, and an increasingly mobile population opportunities in the self › Primary demand drivers include life-changing events and disl
Slide 45: The Market
THE MARKET STOR-AGE PROPERTY REIT LIMITED 45
Slide 46: The Market
THE MARKET Annexure D UK self storage market overview¹ • Less developed: Compared to the United States and Australia 2 050 83.3% 3 375 • Supply: Estimated at 0.89 sqf per head of population in the UK, versus 7 sqf in the US, 2 sqf in Self storage properties, Occupancy on current Self storage propert
Slide 47: The Market (continued)
THE MARKET (continued) Annexure D Institutional interest Increased since 2021, with many changing strategies to enter the fragmented market Market sentiment Positive in the UK due to inflation-linked characteristics, structural undersupply, and sector maturity offering investable assets of suitable
Slide 48: UK and European Self Storage Industry – Overview
Annexure D UK AND EUROPEAN SELF STORAGE INDUSTRY – OVERVIEW UK self storage industry¹ European self storage industry (excluding UK)³ 2 706 77.5% 4 649 Self storage properties, Occupancy on current Self storage properties³ includes 1 012 container lettable area operators 91.1 million sqf Population⁴
Slide 49: UK Self Storage Industry – Rate and Occupancy
UK SELF STORAGE INDUSTRY – RATE AND OCCUPANCY Annexure D Source: The Self Storage Association UK annual industry report, May 2024 STOR-AGE PROPERTY REIT LIMITED 49
Slide 50: Strategy and Portfolio
STRATEGY AND PORTFOLIO STOR-AGE PROPERTY REIT LIMITED 50
Slide 51: Strategy
STRATEGY Annexure E Strategic planning to 2025 • Highly strategic in planning – completed in 5-year cycles • Successful track record of executing 5-year strategies to 2015 and 2020 • Business strategy traditionally led by property strategy – now complemented by digital strategy • Multiple research p
Slide 52: Strategy (continued)
STRATEGY (continued) Annexure E Stor-Age is a sector specialist with deep product understanding, significant emerging and first-world market experience, and boasting a successful track-record of managing self storage assets. The business benefits from outstanding real estate expertise, an excellent
Slide 53: Portfolio Overview
PORTFOLIO OVERVIEW Annexure E 103 The portfolio comprises 60 properties in SA and 43 properties in the UK, with 80 properties classified as owned and 23 properties as managed SA PORTFOLIO UK PORTFOLIO² 60¹ properties 43¹ properties R5.7bn³ R6.9 bn³ (£289.4 million) 412 300m² GLA⁴ 164 900m² GLA⁴ 31 7
Slide 54: Portfolio Analysis
PORTFOLIO ANALYSIS Annexure E Total property value¹ Total number of tenants² Total GLA² Total number of properties³ R12.6bn 51 400 577 200m2 103 Value of properties Number of tenants GLA Number of properties 38% 29% 42% 45% 55% 62% 71% 58% South Africa UK 1. Total net investment property value, incl
Slide 55: SA Property
SA PROPERTY STOR-AGE PROPERTY REIT LIMITED 55
Slide 56: Century City – Current Development
CENTURY CITY – CURRENT DEVELOPMENT Annexure F Located prominently on Edison Way just off Bosmansdam Road in Century City, the Montague property enjoys high visibility to passing traffic with good access. Gardens Edgemead The property will comprise an estimated 6 100m² GLA on completion (on full fit-
Slide 57: Kramerville – Current Development
KRAMERVILLE – CURRENT DEVELOPMENT Annexure F Sandton South Road Located in Kramerville (Sandown), the property is situated on the corner of Dartfield Road and Commerce Crescent. The property benefits from having access on grade to all levels and will comprise an Dartfield Bowling Road estimated 5 40
Slide 58: Load Shedding – Impact in SA
LOAD SHEDDING – IMPACT IN SA Annexure F Our properties • Are not crowded environments, have a small onsite staff complement and are typically low-intensity in their use of energy • Electricity costs ~4.0% of direct operating costs and < 1.0% of revenue Current status • Diesel spend FY24 – c. R4.0 mi
Slide 59: UK Property
UK PROPERTY STOR-AGE PROPERTY REIT LIMITED 59
Slide 60: Leyton – Current Development
LEYTON – CURRENT DEVELOPMENT Annexure G Aldi Storage King Leyton is a brownfield development (building conversion) located on Golden Business Park, at the intersection of Orient Way and the A104, which lies 1.5 miles from Leyton and 2 miles from Walthamstow underground stations and is easily ASDA Su
Slide 61: Acton – Current Development
ACTON – CURRENT DEVELOPMENT Annexure G Storage King Acton is a brownfield development (building conversion) located on A2020 The Vale Stanley Gardens just off the The Vale (A4020), a busy main arterial in Acton in West Shepherds London. Acton Bush Acton, which sits in zone 3, is a large residential
Slide 62: Canterbury – Completed Development
CANTERBURY – COMPLETED DEVELOPMENT Annexure G Storage King Canterbury is a greenfield development located to the east of Canterbury Currys Town Centre in Kent, in close proximity to a large ‘big box’ retail corridor. M&S The site forms part of the ‘new to be created’ Canterbury Trade Park which sits
Slide 63: Operations
OPERATIONS STOR-AGE PROPERTY REIT LIMITED 63
Slide 64: The Platform
THE PLATFORM Annexure H Highly scalable platform Can be leveraged into new markets Unique benefit Sophisticated Cost-effective South African head office infrastructure, homogenous product, shared language and similar timelines dual-market platform Experienced, hands-on management teams Highly experi
Slide 65: Platform Driven by Data
PLATFORM DRIVEN BY DATA Annexure H Optimise: • Supply/demand dynamics • Rental escalations • Unit configurations • Rental rates • Discounting Contact Centre Data Tenant Data • Quality control – ongoing call reviews Revenue • Leasing characteristics • Respond to needs Management • Length of stay • Im
Slide 66: Our Customers
OUR CUSTOMERS Annexure H GEOGRAPHIC REPRESENTATION1 RESIDENTIAL / COMMERCIAL TENANT MIX BY GLA2 Gauteng Residential 30 Western Cape 35 33 Commercial Eastern Cape 1 KwaZulu-Natal 6 Free State 67 3 United Kingdom 25 GEOGRAPHIC FOCUS RESIDENTIAL vs COMMERCIAL Primary focus = high profile locations in J
Slide 67: Our Customers (continued)
OUR CUSTOMERS (continued) Annexure H AVERAGE LENGTH OF STAY – SA AVERAGE LENGTH OF STAY – UK < 6 Months 30 < 6 Months 24 29 31 6 - 12 Months 6 - 12 Months 14 1 - 2 years 9 1 - 2 years 12 15 2 - 3 Years 2 - 3 Years 20 16 > 3 Years > 3 Years DEMAND PROFILE – SA DEMAND PROFILE – UK Two significant user
Slide 68: Business Customers – Adding Value to SA Economy
Annexure H BUSINESS CUSTOMERS – ADDING VALUE TO SA ECONOMY Our commercial customers¹ 50% + 18% + 65% + 80% + 40% + SMMEs Entrepreneurs Operational Inventory Within 5kms of requirements and stock their store Contribution to the local economy¹ Considering that we had approximately 8 800 commercial ten
Slide 69: Digital First – Overview
DIGITAL FIRST – OVERVIEW Annexure H Benefits of the model • Opportunity for smaller independent operators to leverage a publicly traded self storage REIT’s digital platform Proven capability Deep industry to capitalise on specific audience • For Stor-Age it provides an avenue to fast-changing knowle
Slide 70: Digital First – Digital Marketing Platform
DIGITAL FIRST – DIGITAL MARKETING PLATFORM Annexure H Key features EUROPEAN CASE STUDY¹ • Full service digital marketing agency, focused on the self storage Sustained impact on enquiry generation sector, launched in July 2020 and significant increase in organic • Stor-Age: Accredited Google and Meta
Slide 71: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE STOR-AGE PROPERTY REIT LIMITED 71
Slide 72: Annual Impact of Renewable Energy
ANNUAL IMPACT OF RENEWABLE ENERGY Annexure I • C02 emissions¹ avoided since 2018 – 3 769 tonnes (FY23 2 771 tonnes) through the consumption of on-site solar PV renewable electricity • While total power demand across the portfolio is increasing, emissions generated through municipal electricity consu
Slide 73: Social
SOCIAL Annexure I Social and economic development initiatives • Commitment: Stor-Age remains dedicated to social and economic development initiatives, utilising operational and marketing resources along with the core self-storage product • Objectives: Initiate and contribute to projects benefiting p
Slide 74: Social (continued)
SOCIAL (continued) Annexure I Stor-Age Business Hub and economic development • Commitment: Stor-Age remains committed to social and economic development initiatives, actively supporting the sustainability of commercial customers' businesses Support for SMMEs • Majority of our commercial customers ar
Slide 75: Disclaimer and Confidentiality
DISCLAIMER AND CONFIDENTIALITY This document does not constitute or form part of any formal proposal or offer or solicitation to sell, or offer for sale or investment, or for the issue or sale of securities. This document does not (and nor does any part of it) constitute any contract, commitment or
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