Stor-Age Property REIT, a leading JSE-listed self-storage property fund, said occupancy in its South Africa operation increased by 3.9 percent over the quarter to December 31, and 8 percent compared with the same quarter a year ago.
The group said in an update on Friday that occupancy growth had been fuelled by strong demand from both domestic and commercial customers. Same store occupancy in South Africa amounted to 88.7 percent as at December 31.
Self storage is one of few segments of the property market globally that has been growing robustly due to increased accommodation moves through the pandemic, and downsizing among families. An internet search showed for instance that the four largest storage companies in the US for example reported record occupancy above 95 percent in the third quarter.
Total occupancy at Stor-Age, which combines its UK and South Africa operations, increased by 2.6 percent or by 10 500 square metres in the quarter, the company said in an update.
In the UK, 94.1 percent of gross lettable area was occupied, this was after a 1 700 square metre decline in occupancy, which the company said reflected the impact of seasonality.
“The UK self-storage market experiences a greater degree of seasonality than the SA market, with the autumn and winter months being a traditionally slower trading period. Although the seasonal occupancy loss was expected, it was significantly lower than pre-Covid levels,” the company said.
During the quarter the Silver Park Self Storage acquisition, in Brackenfell in Cape Town’s northern suburbs, was completed for R60.1 million, while Green Cube Self Storage in Ottery in Cape Town’s southern suburbs, was bought for R48m.
Trading also commenced at Cresta in Johannesburg in October, where 7 400 square metres would become available on full fit-out on the completion of the first phase of construction.
Stor-Age has a 24.9 percent equity interest in a joint venture (JV) with Moorfield, a UK real estate fund manager, to develop self-storage properties in the UK.
In October the JV acquired a site in Hounslow, West London, to develop about 5 700 square metres. Final planning consent had been received and construction was imminent.
Contracts had been exchanged for a further two opportunities, both of which were expected to be completed shortly.
In addition, terms had been agreed to acquire another site to develop a 5 700 square metre store.
The JV was more than 90 percent committed in relation to the initial allocation of £50 million (about R1 billion) and it continued to pursue acquisition opportunities.
In September 2021, a JV with Nedbank Property Partners was announced to develop two properties in Morningside and Bryanston, for about R200m.
Stor-Age has a 50 percent equity interest in the JV. Construction started in Morningside with the store scheduled to open in the first half of 2023.
Final planning approval was expected for the Bryanston property by February, after which construction would start on site. The JV planned to develop further properties in South Africa.
BUSINESS REPORT ONLINE