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STOR-AGE PROPERTY REIT LIMITED - Voluntary announcement: Acquisition of a self storage property in Weybridge, UK and Investor Presentation

Release Date: 11/03/2019 08:35
Code(s): SSS     PDF:  
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Voluntary announcement: Acquisition of a self storage property in Weybridge, UK and Investor Presentation

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”)


           VOLUNTARY ANNOUNCEMENT: ACQUISITION OF A SELF STORAGE
             PROPERTY IN WEYBRIDGE, UNITED KINGDOM AND INVESTOR
                               PRESENTATION


 1. INTRODUCTION

    The board of directors of Stor-Age (the “Board”) is pleased to announce that Stor-Age, through its
    wholly-owned subsidiary, Betterstore Properties UK Limited (“Betterstore”), has concluded an
    agreement with Robert Baigrie, Alexander MacLachlan and Peakpoint Limited (collectively, the
    “Sellers”), in terms of which Betterstore will acquire 100% of the issued share capital of The
    Storage Pod Limited (“Pod”) (the “Acquisition”), for a purchase consideration of £11.49 million
    (R213.4 million at an exchange rate of R18.57 as at 6 March 2019) (“Purchase Price”), plus or
    minus (as the case may be) the net working capital balance as at the effective date (which is
    anticipated to be approximately £100 000, but is limited to a maximum of £300 000).


 2. RATIONALE

    The Acquisition is in line with the stated growth and investment strategy of the Storage King
    business of pursuing value-added acquisitions in the United Kingdom (“UK”) self storage market.
    The Board believes that the Acquisition represents an excellent opportunity to acquire a high-quality
    self storage property in a location which complements the existing UK-based Storage King portfolio,
    providing additional scale from both a balance sheet and trading perspective (the “Property”). The
    Property will be re-branded under the Storage King brand and managed under the existing
    operating infrastructure.

    Located in Weybridge, Surrey, in the South East of England, the Property has a gross lettable area
    (“GLA”) of approximately 42 800 square feet (“sqf”) and a maximum lettable area of 55 000 sqf.
    The Property is well-built, trades into dense residential areas in and around Weybridge and has the
    potential to increase its GLA with the construction of additional mezzanine floors.


 3. TERMS OF THE ACQUISITION

    3.1     The sale and purchase agreement in respect of the Acquisition was signed on
            6 March 2019 and the effective date of the Acquisition is anticipated to be on or about
            26 March 2019.

    3.2     The Sellers have provided warranties and indemnities that are standard for a transaction
            of this nature.




 4. PROPERTY SPECIFIC INFORMATION

    Details of the Property are set out below:

   Property       Geographic                GLA       Weighted                Total      Acquisition
   name           location                  (sqf)      average        consideration            yield
                                                        annual             payable
                                                     rental rate
                                                        per sqf



   Storage Pod Trade City, Avro           42 848         £22.72         £11.49 million          6.51%
               Way, Brooklands,                                    adjusted by the net
               Weybridge, Surrey,                                      working capital
               KT13 OYF                                                       balance


  Notes

      1. The Property is classified as self storage and is held on a freehold basis.

      2. The total consideration payable is considered to be in line with fair market value of the
         property of £11.48 million, subject to the special assumption of zero purchaser’s costs, as
         determined by an external valuation performed by Oliver Close, a Professional Valuer and
         Registered Valuer of The Royal Institution of Chartered Surveyors, of Cushman &
         Wakefield Debenham Tie Leung Limited as at 30 November 2018. The valuation
         methodology adopted for the Property is consistent with the methodology used for the
         valuation of Stor-Age’s properties as at 31 March 2018.

      3. The acquisition yield is based on the forecast GBP net operating income (pre-UK
         corporation tax) for the year ending 31 March 2020 (the “Forecast”) and the total
         consideration payable of £11.49 million. The Forecast, including the assumptions upon
         which it is based and the financial information from which it has been prepared, is the
         responsibility of the Board. The Forecast has not been reviewed or reported on by
         independent reporting accountants.


5. CATEGORISATION

  The Acquisition is not a categorised transaction in terms of the JSE Listings Requirements and is
  therefore not subject to shareholder approval. This announcement is voluntary and for information
  purposes only.


6. AVAILABILITY OF INVESTOR PRESENTATION

  Shareholders are advised that an investor presentation, setting out further details in respect of both
  the Acquisition and the announcement in respect of the acquisition of a self storage property in
  Bedford, UK, published on SENS on 5 March 2018, is available for download on Stor-Age’s website
  at https://investor-relations.stor-age.co.za/Results-Presentations.

7. DIVIDEND GUIDANCE

   The Acquisition has no impact on the Company’s dividend guidance for the year ending
   31 March 2019.


Johannesburg
11 March 2019

Financial Advisor and Transaction Sponsor
Investec Bank Limited

JSE Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 11/03/2019 08:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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