Stor-Age raises interim dividend as self-storage earnings strengthen

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Stor-Age raises interim dividend

Highlights

Stor-Age agrees to acquire 10 Xtraspace properties for R387.0 million, expanding South African gross lettable area by about 12%, pending regulatory approval and scheduled for Q4 FY27 completion.
Interim distributable income per share rises 4% to 69.04 cents and interim dividend increases 4% to 62.14 cents per share for the six months ended 30 September 2026, driven by strong South African and resilient UK trading.
South African rental income rises 9.5% and UK rental income increases 0.9%, with closing occupancy at 91.4% domestically and 81.5% in the UK, while the loan-to-value ratio stands at 27.3% and undrawn borrowing facilities at R1.1 billion.

Acquisition and interim performance

As reported by Moneyweb, Stor-Age Property Reit Limited has agreed to acquire 10 Xtraspace self-storage properties for R387.0 million, lifting its South African-owned gross lettable area by about 12%. The portfolio includes about 51 800m2 of GLA across Gauteng, KwaZulu-Natal and the Western Cape, while Stor-Age will also manage six additional Xtraspace properties under the Xtraspace brand for an initial two-year term.

The deal remains subject to competition authority approval and is scheduled to complete in the fourth quarter of FY27. For the six months ended 30 September 2026, Stor-Age reports a 4% rise in distributable income per share to 69.04 cents and increases its interim dividend by 4% to 62.14 cents per share.

Chief executive Gavin Lucas says strong trading in South Africa and resilient UK performance support the result. The board also reaffirms full-year guidance for about 5% growth in distributable income per share for FY27, while maintaining its 90% dividend payout ratio target.

South African growth and UK resilience

Stor-Age says its South African operations underpin earnings growth through rental rate increases and firm demand. Domestic rental income rises 9.5%, net property operating income gains 9.3%, and same-store rental income increases 8.6%, supported by an 8.4% rise in average rental rates and a slight increase in occupied space.

Closing occupancy in the owned domestic portfolio stands at 91.4%, down from 92.1% a year earlier, reflecting a strategy that favours pricing over maximum space absorption. The South African joint venture portfolio of seven properties adds 7 000m2 of occupied space year on year to close at 84.6% occupancy, while the company says it is entering its seasonally stronger summer trading period.

During the interim period, Stor-Age completes acquisitions in Ballito and Vredenburg, adding 12 700m2 of GLA. Transfer of two Lock-Up Storage properties in KwaZulu-Natal is scheduled for December 2026, while construction continues at developments in De Waterkant, Melrose and the Sunningdale joint venture extension.

In the UK, where the group trades through the Storage King brand, rental income across 26 wholly owned properties rises 0.9% and net property operating income grows 1.7% in sterling terms, with closing occupancy at 81.5%. Stor-Age says tight operating cost control helps offset a softer point in the sector cycle.

The group's third-party management platform increases total management fees by 9.3% to R35.4 million, with recurring fees up 11.6% to R30.9 million. Stor-Age ends the period with a loan-to-value ratio of 27.3%, net asset value per share up 4.7% to R18.12, around R1.1 billion in undrawn borrowing facilities, and a five-year refinancing of its UK club facility that extends debt maturity to 2031.

Previously, we examined Equites interim distribution after the REIT advanced its UK exit and redirected capital toward South Africa.

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