STOR-AGE PROPERTY REIT LIMITED – Acquisition of the UK portfolio and withdrawal of the warning – SENS


Acquisition of UK portfolio and withdrawal of Cautionary Announcement

Stor-Age Property REIT Limited
Incorporated in the Republic of South Africa
Registration number 2015/168454/06
Share code: SSS ISIN ZAE000208963
(Approved as a REIT by the JSE)
(“Stor-Age” or the “Company”)



Further to the cautionary announcement published on SENS on Thursday, 20 January 2022
shareholders are advised that the board of directors of Stor-Age (the “Board”) is pleased to
announce that Stor-Age, through its wholly-owned subsidiary, Betterstore Self Storage Properties I
Limited (“Betterstore”), has concluded an agreement with Michael and Margaret McCarthy (the
“Sellers”), in terms of which Betterstore will acquire 100% of the issued share capital of a newly
formed company holding four freehold properties (the “Acquisition”), for a purchase consideration
of £37.5 million (the “Purchase Price”).


2.1 The sale and purchase agreement for the Acquisition was signed on 27 January 2022, with an
effective date of 31 January 2022 and is conditional on the following outstanding conditions

2.1.1 The Sellers’ restructure has been completed in all respects in accordance with the sale
and purchase agreement (“SPA”)

2.1.2 The release of all existing encumbrances registered against the properties and the
Seller’s business, assets and subsidiary (as defined in the SPA)

2.2 The Purchase Price will be settled in cash, using available cash and debt funding.

2.3 The Sellers have provided warranties and indemnities that are customary for a transaction of this


Details of the properties are set out in the table below:

Gross Maximum average Property
Property lettable lettable
Geographic location annual valuation
name area area
(sqf) (sqf) rental rate (£000)
per sqf
Water Lane, York,
Storage World, 33 686 45 686 £18.24 8 970
YO39 6PQ
Ripon Road, Harrogate.
Storage World, 41 789 41 789 £26.88 12 670

Leeds Road,
Storage World, 27 233 77 233 £17.28 9 270
Huddersfield, HD1 6NE

Kirkgate, Wakefield,
Storage World, 29 463 38 763 £17.52 6 730

Total 132 171 203 471 37 640


1. All properties are classified as self storage and are held on a freehold basis.

2. The total Purchase Price is considered to be in line with the fair market value of the properties as
set out above, determined by an external valuation performed by Cushman & Wakefield
(Registered Valuers of The Royal Institution of Chartered Surveyors in the UK), as at 20 January
2022, for the purposes of debt funding relating to the Acquisition.

3. Weighted average rental rate per sqf is quoted on an annual basis

4. sqf – square foot


Set out below is the forecast income, net operating income and earnings after tax in respect of the
Acquisitions (the “Forecast”) for the two months ending 31 March 2022 and the year ending 31 March
2023 (the “Forecast Period”).

The Forecast has been prepared on the assumption that the Acquisition is effective on 1 February 2022.

The Forecast, including the assumptions on which it is based and the financial information from which it
has been prepared, is the responsibility of the directors of the Company. The Forecast has not been
reviewed or reported on by independent reporting accountants.

The Forecast presented in the table below has been prepared in accordance with the Company’s
accounting policies, which are in compliance with International Financial Reporting Standards.

Forecast for the Forecast for the
two months ending year ending
31 March 2022 31 March 2023
R’000 R’000
Rental income – self storage 8 461 54 258
Rental income – other 1 260 7 920
Ancillary income 1 340 8 557
Total income 11 061 70 735
Direct operating costs (2 835) (17 894)
Net operating income 8 226 52 841
Finance costs (2 109) (13 254)
Earnings before UK corporations tax 6 117 39 587
Tax (917) (5 938)
Earnings after tax 5 200 33 649

The Forecast incorporates the following material assumptions in respect of income and operating costs:
1. The Forecast is based on information derived from management accounts, budgets and lease
agreements in respect of the Acquisition.
2. Analysis of contractual nature of rental income:

Forecast for the Forecast for the
two months ending year ending
31 March 2022 31 March 2023
% contracted rental income 56.6 12.9
% near contracted rental income 37.4 75.0
% uncontracted rental income 6.0 12.1
Total 100.0 100.0

3. The self storage lease agreements are month-to-month and may be terminated by a customer on
providing two weeks’ notice. In determining the Forecast, management has assumed that the
properties exhibit similar levels of tenant churn based on historical performance and experience from
similar properties.
4. No fair value adjustments and no depreciation are recognised in the Forecast Period.
5. There are no unforeseen economic factors that will affect the ability of customers to meet their
commitments in terms of existing lease agreements. The Forecast assumes bad debts of 0.5% of
rental income.
6. The Forecast assumes a loan-to-value ratio of 50.0% throughout the Forecast Period. UK debt funding
of GBP19.125 million, and an interest rate of 3.15% has been assumed, being the estimated cost of
debt funding for the Acquisition.
7. A GBP:ZAR exchange rate of ZAR21.00 has been assumed for the two months ending 31 March 2022
and a GBP:ZAR exchange rate of ZAR22.00 has been assumed for the year ending 31 March 2023.


The Acquisition is classified as a category 2 transaction in terms of the JSE Listings Requirements and is
not subject to approval by shareholders.


Following the release of this announcement Stor-Age shareholders are advised that they are no longer
required to exercise caution when dealing in their Stor-Age shares. The rationale for the acquisition and
dividend guidance, as disclosed in the cautionary announcement, remain unchanged.

28 January 2022

Transaction Advisor and Sponsor
Investec Bank Limited

Date: 28-01-2022 08:00:00
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