Stor-Age Prroperty Holdings snaps up competitor as it looks to increase scale

Posted On Tuesday, 27 September 2016 14:12 Published by
Rate this item
(0 votes)

Stor-Age Property Reit acquired a smaller competitor as it looks to increase its scale, having grown organically in the past.

 Gavin_Lucas_Stor_Age_Property_REI

Stor-Age Property Reit (real estate investment trust), the only specialised owner of storage assets on the JSE, has acquired a smaller competitor as it looks to increase its scale, having grown organically in the past.

The Reit said on Thursday that it had “entered into a memorandum of understanding” with the shareholders of the third-largest self-storage operator in SA, Storage RSA Investments, in terms of which Stor-Age would acquire 100% of the shares in Storage RSA for an undisclosed amount.

“Shareholders will be advised of the detailed terms and conditions of the proposed acquisition as and when formal agreement has been reached between the parties in this regard,” Stor-Age said.

Storage RSA, an unlisted company, was established in 1997 when it opened its first store in Somerset West in the Western Cape.

The Storage RSA group has a portfolio of seven properties, four of which are located in the Western Cape, with the remaining three 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 StorAge’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.

source: Business Day

Last modified on Tuesday, 27 September 2016 14:23

Most Popular

City of Joburg Housing Development wins UN award

Sep 17, 2019
 MESHACK VAN WYK
The City of Johannesburg’s Housing department has won a Sustainable Cities and Human…

Mall of Africa Celebrates Launch of New Generation Pick n Pay Store

Sep 23, 2019
 MOA PNP  1
Today Mall of Africa welcomed one of South Africa's biggest grocery retailers to the…

Exemplar REITail Acquires Katale Square Shopping Centre

Sep 23, 2019
 JASON MCCORMICK
Real estate investment trust, Exemplar REITail, has acquired Katale Square shopping…

Mixed-use is the key to funding hotel development in Africa

Sep 17, 2019
 XANDER NIJNENS
JLL’s research into global property transactions reveals that in the first half of 2019,…

Reserve Bank keeps repo rate unchanged

Sep 23, 2019
 LESETJA KGANYAGO
 South African Reserve Bank Governor Lesetja Kganyago on Thursday said this is in line…

Please publish modules in offcanvas position.