This article is from the Australian Property Journal archive
IMPROVING revenue and continued valuation uplift of self-storage assets helped National Storage REIT (ASX: NSR) post a strong result, and the trust has forecast higher earnings in the year ahead.
NSR announced IFRS adjusted profit of $230.3 million for FY2024, which is lower than FY2023’s $320.4 million, because property valuation increased by $86.7 million compared to the previous year’s $188 million.
The trust’s underlying earnings $154.2 million, up 9.0 on the previous year’s $141.8 million. The result was driven by a 7% increase in revenue to $323.7 million and group revenue per available metre (REVPAM) grew by 3.1% to $275 per sqm.
Managing director Andrew Catsoulis said the result has demonstrated both the resilience and embedded capacity for growth of NSR’s business.
“NSR’s total assets increased by 13% to $5.2 billion as the total asset value of NSR’s property portfolio rose by 14% to $4.9 billion, with valuation uplift again driven predominantly by improved operational performance. Cap rates remaining steady at 5.91%.
“We have focused on maximising REVPAM by carefully balancing rate and occupancy to achieve 3.1% REVPAM growth across the year, 2.5% of which has been delivered in the second half of FY24 (5.0% annualised growth in 2H).
“Our let-up portfolio of 14 developing centres, operational at 1 July 2023, has grown strongly with occupancy up 10.0% to 59.1% and REVPAM increasing 22.6%. In addition, 11 new developments were completed during FY24 adding 73,500 sqm of NLA which has the potential to generate approximately $23m of potential additional revenue once stabilised, with an initial value of approximately $266m. NSR’s NTA, which increased 2% for the year to $2.52, reflects the high quality of our underlying property portfolio and the strong ongoing performance of the business.” said Catsoulis.
NSR completed 29 acquisitions totalling $250 million. This included 10 additional sites for future developments.
“This affords NSR clear visibility and control over its medium-term growth trajectory. NSR now has 46 active development projects with aggregate NLA pipeline of approximately 382,000 sqm,” he added.
“An important part of NSR’s overall growth strategy is to capitalise on the development and expansion opportunities that exist in Australia and New Zealand in a capital efficient manner. As part of this strategy NSR has entered into agreements with GIC to establish the new National Storage Ventures Fund (Fund) that will pursue the development and operation of self-storage centres across Australia. NSR and GIC hold approximately 25% and 75% equity interests respectively in the Fund and will deploy approximately $270 million of total capital over the initial 12–18 month period.
NSR has forecast an underlying EPS minimum of 11.8cps for FY25 (FY24: 11.3cps) with underlying earnings greater than $163 million (FY24: $154 million).
