Stor-Age to acquire 10 Xtraspace properties in R387m deal

JSE-listed self-storage property fund Stor-Age Property Reit Limited has entered into sale of rental enterprise agreements to acquire a portfolio of 10 established, income-producing self-storage assets from Xtraspace Properties (Pty) Ltd for a purchase consideration of R387 million.

Concurrently, the group has secured a management agreement to oversee an additional six Xtraspace self-storage properties, expanding both its direct physical footprint and its third-party fee-earning management platform across South Africa’s key metropolitan regions.

Read: Stor-Age grows earnings as SA portfolio offsets UK slowdown

The 10 acquired properties add 51 878 m² of Gross Lettable Area (GLA) to Stor-Age’s existing operations. The transaction carries an estimated R38 million in capital cost improvements.

Simultaneously, under the terms of the two-year management agreement, Stor-Age will manage a further six Xtraspace properties, which will remain under the Xtraspace brand, with effect from the transfer date of the acquired portfolio.

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Stor-Age noted that the dual-structured deal directly aligns with its dual-track growth model.

“The acquisition is in line with Stor-Age’s disciplined growth strategy of acquiring trading self storage properties that meet its investment criteria and represents an opportunity to expand the company’s portfolio in key metropolitan markets across South Africa on an earnings accretive basis,” it said.

“The management agreement is also in line with the group’s strategy of growing its third-party management platform.

“The management agreement enhances Stor-Age’s recurring fee income and broadens the company’s self storage management capability across South Africa,” it noted.

Geographic reach 

Established in 2007, Xtraspace operates 16 self-storage properties across the Western Cape, Gauteng, and KwaZulu-Natal. Stor-Age confirmed that the geographic spread of the Xtraspace portfolio across these three provinces complements its existing operational footprint, providing further asset diversification across major South African economic centres.

It said that the R387 million purchase price will be funded utilising Stor-Age’s existing senior debt facilities.

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The company confirmed that post-transaction, its loan-to-value (LTV) ratio is expected to remain within its target range, and the acquisition is projected to be earnings accretive on a per-share basis.

However, the transaction remains subject to customary conditions precedent, including unconditional approval, or approval on terms acceptable to the company, from the competition authorities in SA.

The effective date of the transaction is anticipated to take place during the second half of Stor-Age’s 2027 financial year.

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