Stor-Age in new self-storage JV with Nedbank

Proposed deal is part of the group’s current R685m SA development pipeline.
The group currently has a self-storage investment property portfolio valued at more than R7.5bn. Image: Supplied.

Self-storage real estate investment trust (Reit) Stor-Age put out a strong business and trading update on the JSE on Tuesday and announced plans to develop new self-storage properties in greater Sandton as part of a joint venture (JV) with Nedbank Corporate and Investment Bank – SA’s largest commercial property financier.

“Stor-Age has agreed terms to enter a JV with Nedbank Corporate and Investment Bank, acting through Nedbank Property Partners, subject to the finalisation of formal contract documentation, to develop two high profile properties in Morningside [7 400m² gross lettable area or GLA] and Bryanston [4 700m²] at a total cost of approximately R200 million,” it noted in a JSE Sens statement.

It said that construction is scheduled to start at both properties in the second half of its 2022 financial year and that the two developments form part of the group’s existing R685 million overall South African development pipeline.

“Nedbank has been a primary debt funder to Stor-Age for more than a decade and has developed an excellent understanding and significant insight into the self-storage asset class,” the group added.

As part of the JV, Stor-Age will own a 50.1% equity stake while Nedbank will hold the balance.

Stor-Age said the JV will be funded by equity and mezzanine funding from both parties of 35% and senior debt of 65% of the total development costs.

The newly developed properties as part of the JV will be branded and managed by Stor-Age, while the group will also earn development and property management fees from the JV.

Read: Safer than houses: Stor-Age Property Reit

“Stor-Age will have a pre-emptive right to acquire all newly developed assets once certain predefined operating criteria have been met,” it noted.

Keith McLachlan, investment officer at Integral Asset Management, tells Moneyweb Stor-Age’s JV with Nedbank will add “high margin management revenues” for the Reit “with a deep pocketed financial partner”.

He notes that the JV could also provide acquisition options.

“A great deal all round and clearly highlights Stor-Age’s quality in this space,” says McLachlan.

In another move, Stor-Age also announced further acquisitions totalling just over R108 million in Cape Town.

It has secured two trading self-storage properties in the northern and southern suburbs of the city, both of which are “complementary” to its existing portfolio.

Silver Park Self Storage in Brackenfell was secured for a purchase consideration of R60.1 million. The double storey property has 7 680m² GLA on a 12 000m² site.

The other acquisition for R48 million is a property with 5 470m² GLA on a land parcel of circa 6 500m² near Ottery.

Neither of the two property acquisitions are categorisable transactions in terms of the JSE listings rules, but were voluntarily announced as part of the trading update.

Stor-Age reported strong operating metrics from its standing portfolio of self-storage properties in SA and the UK for the five-month period to August 31, noting that this was a demonstration of the resilience of its business model.

Read: Stor-Age’s new R1.1bn UK self-storage JV with Moorfield

The group is the country’s largest and only JSE-listed self-storage-focused property counter.

“In South Africa on a same store like-for-like basis … the average rental rate has increased by 7.1% year-on-year, while total occupancy has increased by 9 200m² or 3%,” it said.

Stor-Age added that in the UK the average rental rate had increased by 5.7% year-on-year, while total occupancy increased by 9 800m² or 10.4% in the same period.

Riot damage 

The group also gave an update on the impact of the recent riots in KwaZulu-Natal on its property portfolio.

On July 16 it noted in a Sens statement that its self-storage property in Waterfall, near Hillcrest (west of Durban) had been extensively looted and damaged by fire.

“The full extent of the damage to the properties has now been assessed and insurance claims with Sasria [South African Special Risk Insurance Association] lodged. Approximately 60% of the total 15 100m² GLA suffered significant structural damage and these buildings require full demolition and rebuild,” the group said in its latest update.

“A claim for damages to the value of R83 million plus Vat has been submitted to Sasria …

“Those parts of the property least impacted by the unrest and where the necessary repairs have taken place are scheduled to reopen for trading in October 2021,” it added.

It also noted that it has revenue protection cover in place with Sasria.

Read: The scale of the destruction

“The initial claim submission to Hollard [on behalf of Sasria] has been completed … The Waterfall property had a carrying value at 31 March 2021 of R137.5 million, representing 1.8% of the total group investment property value of R7.57 billion,” Stor-Age pointed out.

Commenting on Stor-Age’s trading update, Chris Logan of Opportune Investments said the group had “good numbers” from an operations side.

“This is not a surprise as the self-storage sector has benefitted from Covid as a demand driver, and globally self-storage has been the best performing sector in the Reit space since the pandemic started,” he added.

“Around 43% of Stor-Age’s revenue is derived from the UK and Stor-Age benchmarks itself against the two big storage plays in the UK – Safe Store and Big Yellow.

“The stock prices of both Safe Store and Big Yellow have done incredibly well, more than doubling from the pandemic lows and in the last six months alone increasing by 40% versus the pedestrian 5% appreciation in [the] Stor-Age share price [on the JSE].”

Read: A closer look at Stor-Age’s FY results

“Stor-Age is on a substantially higher dividend yield of 7.7% than Safe Store of 1.82% and Big Yellow of 2.23% and also only trades at a 6% premium to its NAV [net asset value] versus Safe Store trading at a 103% premium and Big Yellow’s a 77% premium,” added Logan.

“Stor-Age needs to close the gap to its UK peers who it benchmarks itself against with possible strategies being bringing in a bigger non-SA shareholder-base and down the line, once greater scale has been achieved, possibly listing its UK Storage King operations as a separate Reit there.”



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Wouldn’t touch Nedbank or Old Mutual with a bargepole.

These are both useless entities well past their sell by date. Their customer serves is the worst in the world. Their complaints department also. Takes months to even just get a response from them.

End of comments.



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