Our opinion on the current state of SSS

Stor-Age Property REIT Limited stands out on the Johannesburg Stock Exchange (JSE) as the premier real estate investment trust (REIT) dedicated to the self-storage sector, marking its unique position with operations spanning both South Africa and the United Kingdom. The strategic distribution of its portfolio, with a larger share in South Africa but significant and growing interests in the UK, underscores the company's broad vision and international expansion goals. This geographical diversity not only ensures a robust operational footprint but also introduces a rand-hedge component to the investment, enhancing its appeal to investors seeking exposure to international markets while mitigating currency risk.

The resilience of the self-storage industry, with its capacity to thrive across economic cycles, provides Stor-Age with a stable and predictable revenue stream. This sector's performance is often counter-cyclical, seeing demand spikes during both economic booms and downturns, which speaks to the intrinsic need for storage solutions among a broad customer base. The company's strategic expansion through the acquisition of properties and development projects, notably the acquisition of the Easistore portfolio in the UK and the ongoing development pipeline, reflects a proactive approach to growth and market penetration.

For the six months ending on 30th September 2023, Stor-Age demonstrated solid operational progress, evidenced by a 16.9% increase in property revenue. However, the period also saw a significant reduction in headline earnings per share (HEPS), which the company will need to address to reassure investors of its profitability and operational efficiency. Nonetheless, the increased occupancy rates and net asset value (NAV) growth are positive indicators of the company's underlying strength and market position.

The trading update for the four months to 31st January 2024 further reinforces the positive trajectory, with notable improvements in occupancy rates and rental income in South Africa. These operational highlights, coupled with the company's strategic investments and development activities, position Stor-Age as a compelling investment proposition within the JSE's property sector.

Stor-Age's recent performance and strategic initiatives paint a picture of a company with a clear vision for growth, both domestically and internationally. Its focus on the self-storage sector, a niche yet fundamentally robust and resilient market, sets it apart from traditional property investments. The company's ability to navigate economic fluctuations and capitalize on opportunities for expansion and development underscores its potential for sustained growth and value creation for shareholders.

As Stor-Age continues on its growth trajectory, buoyed by strategic acquisitions and development projects, its investment case becomes increasingly compelling. The company's unique market positioning, combined with its proven resilience and strategic expansion, makes it an attractive option for investors seeking stable returns and exposure to a niche property sector with growth potential.