National Storage Earnings up 14%

23 February 2021

National Storage results issued this week, revealing total occupancy up 7.7% driving underlying earnings to $39.2m, up 14%.

Managing Director Mr Andrew Catsoulis said, “NSR has again delivered a strong result as we continue to execute our growth strategy.”

NSR continued to execute its acquisition and development strategy with 18 acquisitions settled totalling $258 million, along with seven development and expansion projects completed in 2020 adding almost 40,000m2 of new NLA. NSR’s NTA per security increased to $1.72, while total assets increased by 14% to $2.81 billion.


  • A-IFRS profit after tax of $101.4 million
  • 1H FY21 underlying earnings of $39.2 million, up 14%
  • 1H FY21 underlying EPS of 3.9cps
  • Total assets of $2.81 billion, up 14%
  • Net tangible assets $1.72 per stapled security, up 4.2%
  • 18 acquisitions totalling $258 million settled in 1H FY21
  • 19 active development projects providing NLA pipeline of approximately 130,000m2
  • FY21 underlying earnings guidance range revised to 8.1 – 8.5cps

Combined Australian and New Zealand occupancy increased by 7.8% to 85.4% with all Australian states and New Zealand showing strong growth.

“NSR has continued to demonstrate positive occupancy growth with 96,000m2 of occupancy added since June 2020 and 62% of centres above 85% occupied, with Tasmania and ACT both sitting at over 90% occupied.” said Mr Catsoulis.

As a business, NSR continues to execute its “four pillars” growth strategy. This strategy focuses on achieving organic growth through rate and occupancy increases, maintaining its acquisition pipeline, undertaking high-quality developments and expansions in key markets – all overlayed
by its use of new technology and innovation initiatives.

NSR has significant built capacity within the existing portfolio of approximately 110,000m2 of occupancy “runway” available across Australia and New Zealand before NSR reaches an occupancy level of 90%, which should generate up to $32 million of additional revenue if achieved. Given NSR’s relatively fixed cost base, the majority of this potential revenue should fall to underlying earnings.

NSR announced 19 active projects with nine new projects currently under construction. Upon completion, NSR’s current development pipeline will add an aggregate NLA of approximately 130,000m2, providing important additional built capacity.

Mr Catsoulis said “NSR continues to utilise a combination of greenfield development and expansion projects, turnkey and joint venture arrangements in order to capitalise on its in-house development expertise and provide enhanced revenue and capital outcomes for NSR.”


Subject to no material changes in market conditions or operating environments, including no material deterioration in COVID-19 restrictions, regulations and impact, NSR’s FY21 guidance range for underlying earnings will be 8.1 to 8.5 cents per stapled security.

NSR’s distribution guidance is in line with NSR’s distribution policy of 90% – 100% of underlying earnings.

Our Views

NSR have a good sector specific model which is working well for investors. The forecast distribution of 8.5cps provides a distribution yield of 4.5% which is low, however with a significant development pipeline, there is no doubt some uplift built into the current price.

Earnings per security is closer to 7.7%pa.

NSR are on our recommend list.