Stor-Age grows earnings as SA portfolio offsets UK slowdown

JSE-listed self-storage sector specialist Stor-Age Property Reit Limited has delivered a resilient full-year financial performance for the period ended 31 March 2026, leveraging an exceptional domestic trading cycle to successfully offset cyclical macroeconomic friction in its United Kingdom portfolio.

The specialised real estate investment trust (Reit) reported a 5.1% increase in distributable income per share to 129.29 cents, matching a 5.1% increase in its total annual dividend per share to 116.36 cents.

The group’s financial metrics were heavily fortified by a R500 million equity capital raise completed in December 2025. Executed at a distinct premium to net asset value (NAV), the capital injection systematically pared down corporate debt and dragged the group’s SA Reit loan-to-value (LTV) ratio down to a conservative 26.7%.

On the back of its fortified balance sheet and an expanding development pipeline, executive leadership provided growth guidance for the financial year ending 31 March 2027 (FY27), targeting a 5% expansion in distributable income per share while maintaining a 90% dividend payout ratio.

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SA anchors group growth

The domestic South African portfolio served as the primary growth catalyst for the group during the financial year. Driven by robust consumer demand, pricing momentum, and a fragmented competitive landscape, local rental income climbed 10.5%, while net property operating income surged 11.1%, closing out the period with a dominant occupancy rate of 93.4%.

On an organic same-store basis, SA rental income expanded by 9.6%, anchored by an 8.6% upward trajectory in average rental rates and a 0.9% tick in average occupancy. Locally, the group’s joint venture (JV) portfolio added an additional 8 100m² of operational occupancy.

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Stor-Age CEO Gavin Lucas emphasised the underlying operational durability of the dual-region platform: “FY26 again demonstrated the resilience of our operating model and the depth of the platform we have built across South Africa and the UK.

“The South African business delivered an excellent performance, our balance sheet remains conservatively positioned, and we made meaningful strategic progress across acquisitions, developments, joint ventures and third-party management.

“While the UK trading environment was tougher, the long-term fundamentals of the market remain attractive,” Lucas added.

Navigating cyclical normalisation in the UK

In sharp contrast to the double-digit domestic expansion, the UK portfolio faced distinct cyclical headwinds following a strong FY25 performance.

UK rental income edged up marginally by 1.1%, while net property operating income fell by 0.8%, pulling owned portfolio occupancy down to 81.6%.

Management clarified that the slower UK performance reflects macroeconomic pressures and an expected cyclical normalisation following the inflated post-pandemic trading boom experienced between 2021 and 2023, rather than structural decay within the region’s self-storage fundamentals.

Conversely, the UK joint venture and managed platforms demonstrated healthier traction, expanding occupancy by 2 000m² across JV assets and 1 200m² across its five managed properties.

Capital-light asset scaling and pipeline expansion

A core pillar of Stor-Age’s ongoing strategy is the expansion of its capital-light growth model through third-party management contracts and joint venture developments.

While total management fees dropped slightly to R61.8 million due to compressed non-recurring development and acquisition fees, recurring management fees jumped 15.6% to R60.7 million, proving a higher quality and predictability of fee-based income.

The group also expanded its physical footprint through R200 million worth of strategic acquisitions, absorbing Lock-Up Storage and Execustore in KwaZulu-Natal, alongside West Coast Storage in the Western Cape to add 24 050m² of gross lettable area.

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Its forward development pipeline includes a new site with premium M5 highway exposure in Maitland, Cape Town, alongside flagship projects in Melrose, Johannesburg and the sought-after De Waterkant precinct bordering the Cape Town CBD and V&A Waterfront.

Looking to the future, Lucas noted that the period was defined by structural positioning just as much as financial expansion: “What is important about FY26 is not only the earnings growth, but the quality of the platform we are building for the next phase of growth.

“We strengthened the balance sheet, advanced our pipeline, continued to mature our third-party management capability and maintained disciplined capital allocation. As a result, Stor-Age is well positioned to continue creating sustainable long-term value.”

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