Category Archives: Stor-Age Property REIT (SSS)

Research reports on Stor-Age Property REIT (SSS), a self-storage property Real Estate Investment Trust (REIT) listed on the JSE.

Stor-Age Property REIT Limited – 1H 26 Results – Still Steady with Growth Ahead

Share Code: SSS – Market Cap: R8.7bn – P/B: 1.0x – DY: 6.3%

Stor-Age – 1H 26 – Results NoteDownload

1H 26 Results: Well Run, Well Positioned & Globally Competitive

  • Stor-Age REIT owns a well-managed, growing self-storage property portfolio that was built out of a strong SA base (that remains robust & growing) & is increasingly allocating capital towards the UK (offering Rand Hedge benefits) while cleverly leveraging the capital-light JV structures to build what could become a substantial portfolio.
  • The Group’s 1H 26 rental income growth has been strong (+6% annualised) & has historically outpaced inflation; occupancies remain high in owned properties. 1H 26 EBITDA and NPOP grew by 5% and 6% respectively, with distributable earnings increasing by 8% with stable profit margins.
  • From FY 25, the Group adjusted its distribution payout ratio from 100% to 90% of distributable income—retaining some capital for growth.
  • 1H 26’s Net Asset Value (NAV) per share increased by 2% (annualised).
  • The Group remains comfortably geared, though comparable international peers do have somewhat lower average gearing.
  • Stor-Age’s Total Return (in Rands) has outperformed all listed global self-storage companies over 3, 5, & 10 years.

Stor-Age – Total Return of Listed Self-Storage REITs

Source: Koyfin (18/11/2025)

Valuation and 12m TP: Relative Model & Dividend Discount Model

  • Stor-Age’s share price has fallen behind its NAV growth, leading to a Price/Book (“PB”) ratio range of 0.8~0.9x (to 1H 26). The Group’s quality, its potential for Rand Hedge benefits from its UK portfolio, optionality from organic and acquisitive growth, and the fact that the properties are fairly valued (on quite reasonable assumptions), informs our view that the share should (at least) track its historic 1.0x PB over time, if not at a premium to book. The share currently has a PB fractionally higher than 1.0x, having strongly re-rated over the last six months.

Stor-Age – Price/Book (x) History

Source: Koyfin (18/11/2025)

  • We have updated our Relative Valuation Model and Dividend Discount Models to arrive at an equal-weighted average valuation of R18.50 per share (FY 25: R16.71).
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m Target Price—factoring in dividends—of R19.70 (Previously: R17.80); we expect this to generate a 12m (total) return of c.16%.
  • The Group’s next five-year plan (FY 26 to FY 30) sees a 50% growth in number of properties (SA and UK combined) & could drive a re-rating in the Group’s listed size (it is currently a small cap) that could support increasing institutional appetite as self-storage remains an attractive growth market in both SA and the UK and a sought-after property class. See the Group’s recent oversubscribed bookbuild as evidence of this.
Stor-Age – 1H 26 – Results NoteDownload

Stor-Age Property REIT Limited – FY 25 Results – Steady Performance

Share Code: SSS – Market Cap: R7.5bn – P/B: 0.9x – DY: 7%

Stor-Age REIT – FY 25 – Results NoteDownload

FY 25 Results & Thoughts: Well Run, Well Positioned & Globally Competitive

  • Stor-Age owns a well-managed, growing self-storage property portfolio that was built out of a strong SA-base (that remains robust and growing) and is increasingly allocating capital towards the UK (offering Rand Hedge benefits) while cleverly leveraging the capital-light policy of JV funding structures to build out what will likely become a substantial portfolio.
  • FY 25 rental income growth has been strong, historically outpacing inflation; SA achieving +10.2% and the UK +6.5% in the period. FY 25 occupancies remain high in owned properties—exceeding 90% in South Africa and around 84% in the UK—while JV properties are still in their lease-up period with occupancies around 74% in SA (FY24: 65%) and 63% in the UK (FY24: 57%).
  • The Group’s Net Property Operating Income (NPOI) margin has consistently been around 74% since FY19. A 65% EBITDA margin remains strong and underpinned by solid cash flows with a history of distributing nearly all distributable earnings as dividends. The Group did recently shift its distribution policy from 100% to 90~95% of distributable income—retaining some capital for growth—thus, FY 25’s payout ratio is 90%.
  • Distributable income rose 4% in FY25 and management has indicated a 5% to 6% expected increase for FY26, which we think may prove to be slightly conservative (our forecast is fractionally above the high-end of this range).
  • Net Asset Value (NAV) per share increased by 5.6% in FY25 (c. 7% per year for the past four years). We note that the Rand/Pound exchange rate has been very stable over the past two financial years. Theoretically, the Rand should depreciate against the Pound by the annual inflation differential. Should this revert to the theory, there will be upside when and as the Pound assets and earnings are converted to Rand earnings & distributions.
  • We consider the Group’s balance sheet comfortably/lowly geared though comparable international peers do have somewhat lower average gearing.

Valuation and 12m TP: Relative Model and Dividend Discount Model Used

  • Stor-Age’s share price has not kept pace with its NAV growth, leading to a Price/Book (“PB”) ratio of 0.8-0.9x. The Group’s quality, its potential for both Rand Hedge benefits from its UK portfolio, optionality from organic and acquisitive growth informs our view that the share should (at least) track its historic 1.0x PB over time.
  • Stor-Age’s share price has not kept pace with its NAV growth, leading to a Price/Book (“PB”) ratio of 0.8~0.9x. The Group’s quality, its potential for both Rand Hedge benefits from its UK portfolio, optionality from organic and acquisitive growth informs our view that the share should (at least) track its historic 1.0x PB over time.
  • We determined the fair value for Stor-Age by using a Relative Valuation Model and a Dividend Discount Model (31 March 2025):
    • Relative Value: Our fair value is R16.71 per share,
    • Dividend Discount Model: Our fair value is R16.71 per share, &
    • Equal-weighted average valuation: R16.71 per share.
  • Rolling this fair value forward, we arrive at a 12m Target Price—factoring in dividends—of R17.80 (Previously: R17.10); we expect this to generate a 12m return of c.19% at the 30 June 2025 share price of R15.95.
Stor-Age REIT – FY 25 – Results NoteDownload

Stor-Age Property REIT Limited – Valuation Update & Change in Analyst

Share Code: SSS – Market Cap: R7.1bn – PB: 0.9x – DY: 8%

Stor-Age – Change of Analyst Ad Hoc Note – 2 February 2025Download

Reason for this Ad Hoc Note: A change in analyst and resulting review of valuation approach, fair value and 12m TP. Forecasts will be updated following the FY 25E results.

Thoughts: Well-run, Well-positioned & Globally Competitive Self-Storage REIT

  • Stor-Age owns a well-managed, growing self-storage property portfolio that was built out of a strong SA-base (that remains robust and growing) and is increasingly allocating capital towards the UK (Rand Hedge benefits) while cleverly leveraging the somewhat lower balance sheet intensity of JV funding structures to build out what will likely become a substantial portfolio.
  • Rental income growth has been strong, historically outpacing inflation, with SA averaging around 10-11% and the UK around 6-9% over the past 5 years. Occupancy rates are high in owned properties, exceeding 90% in South Africa and around 85% in the UK, while JV properties are still in their lease-up period, with occupancy around 60%.
  • The Group’s Net Property Operating Income (NPOI) margin has been consistently around 74% since FY19.  EBITDA margins are also strong, at 66-67% while financial performance is underpinned by solid cash flows and a history of distributing nearly all Funds From Operations (FFO) as dividends; Note that the company has recently shifted its distribution policy from 100% to 90-95% of FFO, retaining some capital for growth.
  • The Net Asset Value (NAV) per share has steadily increased, providing a solid return and we consider the Group’s balance sheet comfortably/lowly geared.
  • Refer to Annexure A and Annexure B whereby we further review the Group’s history and examine the global self-storage market and Stor-Age’s listed peers around the world.

Valuation and 12m TP: Relative Model and Dividend Discount Model Used

  • Interestingly, Stor-Age’s share price has not kept pace with NAV growth, leading to a current Price/Book (“PB”) ratio of 0.8~0.9x. Given what we consider conservative valuations of its underlying investment properties, the potential for both Rand Hedge benefits from its UK portfolio, optionality for organic and acquisitive growth, we think that the share should (at least) track its historic c.1.0x PB ratio over time.
  • We determined the fair value for Stor-Age by using a Relative Valuation Model and a Dividend Discount Model:
    • Relative Value: Our fair value is R15.90 per share
    • Dividend Discount Model: Our fair value is R14.57 per share.
    • Equal-weighted average valuation: Result is R15.23 per share.
  • Rolling this fair value forward, we arrive at a 12m Target Price of R17.10 (Previously: R16.73); factoring in dividends, we expect this to generate a 12m Expected Return of ca 24% from the current share price.
  • Note that the international peer averages used exclude some USA peers due to differences in accounting practices, namely, that their investment properties are not fair valued on their balance sheet. This distorts their PB ratios and makes PB comparisons difficult.
Stor-Age – Change of Analyst Ad Hoc Note – 2 February 2025Download

Stor-Age Property REIT Limited – H1:25 Results – Building on a Solid Foundation

Share Code: SSS – Market Cap: R7.53bn – PE: 8.8x – DY: 7.29%

Stor-Age – H1:25 – Results NoteDownload

H1 FY 24 Results: In-line to better-than-expected

  • Distributable income grew by 3.5% from H1 FY24 (61.36cps) to H1 FY25 (63.51cps). This growth lagged the growth in FFO which rose nicely by 7.0%.
  • Rental income grew 8.1%, predominantly attributable to above inflation same-store rental growth in the SA segment. In the UK, same-store rental rate increases were in line with UK inflation but a good improvement in occupancies contributed to this segment’s growth.
  • Management have guided for FY25E distributable income of 122cps~126cps (the mid-range of this guidance implies a Forward Dividend Yield of c.7.9%).

Thoughts: UK difficulty offset by SA strength

  • Competitive pressures in the UK may result in limiting Storage King’s rental growth to inflation but a solid performance in the SA segment has continued with rental rates growing above inflation whilst still maintaining target occupancies levels (c.92.0%).
  • Shurgard’s acquisition of Lok’nStore is a good proxy for implying a valuation of the Group’s UK segment – we explore this further in the body of this note.

Updated Forecast and Valuation: Valuation & TP Lifted

  • We see Stor-Age’s fair value as R16.16 per share (previously R15.50) based on a blended valuation approach (DCF & relative P/B & EV/EBITDA values).
  • Rolling forward our fair value by 12 months at our Cost of Equity (less our expected dividend) gives us a 12m TP of R16.73 per share (previously R15.97), implying a total return of c.14.1% (price return of +7% and an expected dividend return of +7.14%).
Stor-Age – H1:25 – Results NoteDownload

Stor-Age Property REIT Limited – Initiation of Coverage – Good Stor(e) of Capital

Share Code: JSE: SSS – Market Cap: R7.2b – PE: 17.0x – DY: 7.9%

Stor-Age Property REIT – Initiation of CoverageDownload

Business Overview:

  • Stor-Age is an integrated & internally managed REIT that owns & operates self-storage properties in South Africa and the United Kingdom with a portfolio comprising of 103 properties (60 in SA operate under Stor-Age brand & 43 in the UK operate under the Storage King brand).
  • Stor-Age is the largest, market-dominant self-storage brand in SA whilst ranking 6th in the UK (the UK is an under-penetrated Developed Market based on self-storage space per capita versus other DMs).

Key Upsides & Downsides:

  • The current interest rate-cutting cycle may lower finance costs, boost valuations & increase the attractiveness of the property sector.
  • Furthermore, Stor-Age has a highly defensive product (self-storage), and the share price has been resilient through economic downturns with an excellent track record of operating and dividend growth.
  • Self-storage has high barriers to entry that includes long lease-up periods for newly developed properties and limited available properties in high-density, visible urban nodes.
  • The Group has a fast-growing, high-margin income stream of management fees from third-party property management and digital marketing platform that offer its shareholders exciting optionality.
  • Management has a pipeline of 13 properties that are expected to add 60,000m2 of GLA to its portfolio in the near term.
  • Management has decided to decrease its distributable income payout ratio from 100% to a more sustainable 90~95%, thus resulting in some downward pressure on short-term distributions per share despite expected growth in forecast distributable income.

Forecast, Valuation and Implied Return:

  • We see Stor-age as having a fair value of c.R15.50 per share based on a blended average of a discounted cash flow valuation (R15.92) and relative valuation model (R15.08); the latter is based on the valuation multiples of comparable listed self-storage peer companies.
  • Rolling forward our fair value by 12 months at our Cost of Equity (less our expected dividend) gives us a 12m TP of R15.97 per share, implying a total return of c.14% based on the current share price (R15.02).
  • We see a c.14% total return in the stock as comprising a forecast price return of c.6% and forecast dividend yield of c.8%.
Stor-Age Property REIT – Initiation of CoverageDownload