On last week’s investor visit to Stor-Age’s facilities in Gardens and Century City in Cape Town, CEO Gavin Lucas dryly noted: “Once you have seen one self-storage facility, you have pretty much seen them all.”
Maybe. But given that the Gardens facility is around 15 years old and the Century City facility is only two years old, a lot of lessons and business experience have gone into the Century City facility. This has made the development, lease-up and optimisation of its day-to-day operations much more effective and efficient than they were 15 years ago.
Lucas consolidated that message throughout the tour. What sets the specialist self-storage property group apart is that its management has been in the sector for 22 years, and nearly 11 years in the listed environment. Like many things in life, it might look simple from the outside. But there is a lot of nuance involved, particularly in the critical lease-up period, which can take anything from three to five years.
Compare this to a big shopping mall where your anchor tenant moves in on day one of the property opening, and that anchor tenant helps pull in other, smaller tenants that also pay rent from the first day. Or the residential property developer that normally begins construction only once a decent proportion of the properties have been sold off-plan but then has to hope it sells through the rest of the stock as it approaches completion.
One key differentiator is that Stor-Age uses an internally developed marketing and operations platform, Digital First, for its South African and UK operations, all run from its head office in Cape Town.
Stor-Age also licenses the Digital First platform to third-party self-storage operators. This covers about 300 facilities across 20 countries, including Japan, Spain and Australia. It gives Stor-Age unique insights into what other operators are doing in other markets, allowing it to benchmark its business against them, improve its own operations and stay at the forefront of the industry.
Stor-Age’s insights from other markets came into sharp relief when it first entered the much more mature UK market. The ferocious competition and the tempo at which operators worked initially surprised the Stor-Age team members, but they quickly got up to speed. They then brought the lessons from the UK market back home to South Africa to up its game locally and stay ahead of competitors.
Lucas said going to the UK “really helped sharpen our pencil” in terms of what the company does in South Africa.
Today, Stor-Age operates in the UK and South Africa. It plans to grow in both geographies through a mix of strategies that reflect the entrepreneurial nature of the management team, who are also the business’s founders.
Stor-Age is still growing through acquisitions, management contracts, joint venture arrangements and funding developments on its own balance sheet. The group is not only looking to expand the number of properties in its portfolios but is also open to adding another geography to the mix. When and where will depend on opportunities and pricing, with Lucas emphasising that management is not looking for deals or expansion just for the sake of it. So, it’s a case of watch this space.
Lucas also reminded investors about the cyclical nature of markets — pointing out that only a few short years ago the group was urged to offload the South African portfolio and redeploy capital into the UK market, as the rand and South Africa were going to hell in a hand basket.
Fast-forward to today, and the big question is why Stor-Age still wants to expand in the UK, with prime ministers coming and going like London buses and government bond yields being the highest in the G7.
He said the Stor-Age management team has learnt not to get caught up in the noise but to rather use the cyclical nature of markets, economies and the sector itself to deploy capital judiciously.
Where does all this leave Stor-Age? The group has a stated goal of 160 properties by 2030, up from the 110 it now has. This will be no mean feat, but perhaps an acquisition or two would hasten expansion.
Like most stocks listed on the JSE, it has come back from the highs reached in late 2025 and early 2026 before the onset of the US-Israel-Iran crisis. Stor-Age has moved from trading in line with or at a slight premium to NAV to about 12% below the last stated NAV.
Given the nature of the assets, investors might not expect too much change in the NAV at the next results in November. So any further widening of the discount to NAV could give investors an attractive long-term entry point in this specialist property company.
