SA's first self-storage REIT to list on JSE

CEO Gavin Lucas is confident that Stor-Age’s differentiators and strong market fundamentals bode well for take-up of the offers.

South Africa’s largest self-storage property fund, Stor-Age Property REIT Limited (Stor-Age), is set to list on the JSE in November as the first REIT of its kind on the exchange.

Founded in 2005 by the Lucas family, the decade-old group will list an initial R1.3 billion portfolio of self-storage properties and is forecasting above-average distribution growth in the medium term. 

South Africa tends to have more generalist property REITs that invest in a mix of segments such as commercial industrial, hotel, office and retail. But one of the trends we have seen internationally is for more focused REITs that invest solely in just one segment of the property market.

The listing of Indluplace Properties in June, the first residential-focused fund on the JSE’s R600 billion real estate sector, was heralded as a diversification play for the property market. The fund paved the way for more specialist property listings, with Balwin Properties set to list this October.

Stor-Age is following in the footsteps of international self-storage peers who have consistently outperformed the listed property sectors of the US, UK and Australia in recent years.  

CEO Gavin Lucas is confident that Stor-Age’s differentiators and strong market fundamentals bode well for take-up of the offers.

“The majority of our listing portfolio assets are considered ‘Mature’, meaning over 80% tenancy.  This stabilises our portfolio, minimises investor risk and provides visibility of earnings,” Lucas said.

The Fund is looking to raise around R700 million from institutional investors and has set aside another R15 million for staff, customers and suppliers. The company is targeting a market capitalisation of around R1.2 billion on listing. The price per share will be finalised post the institutional bookbuild.

Stor-Age would further look to expand its national footprint either through third-party acquisitions or the R1-billion pipeline over which the group had a pre-emptive right of acquisition.

Stanlib’s head of listed property funds, Keillen Ndlovu, says: "We like the quality of the buildings, business model and management. Their properties are perfectly located close to where people live."

"Storage has been a very successful sector globally especially in the US. We believe that there is room for growth in South Africa over time. It's also refreshing as well to have a new sector in the listed property sector which is traditionally retail, office and industrial sectors.” concludes Ndlovu.