Stor-Age picks up another four UK properties
Unlock the Stock: Afrimat and Spear REIT
Afrimat’s track record is spectacular. Spear REIT is a highly respected property fund. On Unlock the Stock, you can learn about both companies.
RCL is far more than just a chicken business
RCL is far more than just a chicken business these days, which isn’t a bad thing.
Bidvest: strong trading profit growth in every division
Bidvest closed 3.8% higher after releasing results for the six months to December 2021.
Liberty Two Degrees: reversions continue to bite
Liberty Two Degrees holds stakes in some of the most iconic properties in the country
Alviva: 20% revenue growth excl. Tarsus
After teasing the market with a trading statement, Alviva has now released all the details of the interim results for the six months ended December 2021.
PSG Group and the Great Value Unlock
This is one of the biggest news stories on the JSE that we’ve seen in a while
JSE Limited: a cash cow in a shrinking field
You may not be aware of this, but the JSE Limited is listed on the JSE. You’re right in thinking that this sounds like the financial version of the movie Inception
Capital Appreciation on the deal train
The company has announced the acquisitions of three technology companies in South Africa and a 20% stake in a company in the Netherlands.
Woolworths won’t miss 2021
as released results for the 26 weeks to 26 December 2021. The share price rallied 6% despite a fair share of negative commentary on Twitter.
Cashbuild’s negative sales momentum continues
Cashbuild released its interim results for the six months ended 26 December 2021
Stor-Age is continuing its expansion in the UK, a market that the company first entered in November 2017. Over that time, the UK brand Storage King has grown from 13 properties to 30.
This time, there’s a deal on the same terms as the existing joint venture arrangement between Stor-Age and Moorfield, which means that the latter will take a 75.1% interest and Stor-Age will take a 24.9% interest in the latest acquisition.
That acquisition is a group of four properties, collectively called Storagebase, for GBP59 million. The properties will be branded and managed by Storage King.
The three mature properties in the portfolio boast an occupancy of more than 90%. They are larger than most properties of this type, which is good for operating margins. These three properties represent a forward yield of around 6.3% and an equity yield of around 13.2%.
The fourth property is only scheduled to open in April 2022. This property is even bigger than the others, so there is significant valuation upside if a mature occupancy level can be achieved.
With this property included, the forward equity yield is 11.6%.
Importantly, Stor-Age has a right of first refusal over any of the properties in case Moorfield wants to exit.
Stor-Age needs to contribute GBP7.5 million in equity to this transaction for its share of the deal. Loan funding will come from Aviva Investors and will be sustainability-linked, so meeting “green” metrics is part of the deal. The debt is for a five-year term and only interest is payable until the eventual maturity date. The loan to value is 55% (so the loan is worth GBP30.8 million) and the cost of a debt is a 225bps margin above the five-year UK gilt rate.
This implies a cost of funding of around 3.53%, which is how a forward yield of 6.3% for the mature properties translates into a much higher equity yield.
This deal is too small to require a shareholder vote or even a detailed terms announcement, so this was a voluntary update to shareholders.
