Stor-Age Property REIT to acquire Competition

Grindrod Asset Management’s chief investment officer, Ian Anderson, said the Storage RSA Investments acquisition signified that Stor-Age was consolidating its position in the self-storage industry.

Stor-Age Property Reit announced last week that its had acquired a smaller competitor, Storage RSA Investments, as the JSE-listed group seeks to expand and consolidate its position in the self-storage industry.

For an undisclosed amount, Stor-Age Property said that it had entered into a memorandum of understanding to acquire 100 percent of the shares in Storage RSA, the third-largest self-storage operator.

Storage RSA was established in 1997 when it opened its first store in Somerset West and now has a portfolio of seven high-quality properties, of which four were located in Cape Town and the rest in Gauteng.

Stor-Age intends to become a R5bn property fund by 2020. Its current market capitalisation is about R1.4bn.

The company is focused on SA’s six major cities of Johannesburg, Cape Town, Pretoria, Durban, Port Elizabeth and Bloemfontein.

“The board is of the view that the proposed acquisition is in line with Stor-Age’s stated strategy of pursuing value-added acquisitions in a fragmented industry, thereby consolidating its position as a dynamic brand in the South African market,” the company said.

“From a sector perspective, concluding the deal would solidify and significantly contribute to Stor-Age’s position as a significant self-storage operator and property fund in the South African market.

“While there is some room for immediate value enhancement of the portfolio through Stor-Age’s sophisticated operations platform, the majority of this value enhancement will occur over time through key initiatives such as digital marketing, revenue management and scale in key markets,” it said.

Grindrod Asset Management’s chief investment officer, Ian Anderson, said the acquisition signified that Stor-Age was consolidating its position in the self-storage industry.

“While it won’t change Stor-Age’s numbers in the short-term, it is an important transaction in terms of the evolution of the selfstorage industry in SA. Stor-Age are consolidating their position in a highly fragmented industry.

“Having fewer, larger players with recognised brands and solid operating platforms will bring better economics to the sector in the long term,” he said.