Self Storage specialist, National Storage REIT has tapped capital markets for $300m in equity to support further growth of the platform and replenish investment capacity with further debt repayment of $84m.
So far this financial year, NSR has settled 5 sites for $32 million, with a further 11 sites committed for $81 million. The group has also completed 11,000m2 of development and expansion, with a further 85,000m2 under construction with an anticipated cost of completion of $124 million. These additions take the portfolio of 46 development, expansion and redevelopment projects in place within Australia and New Zealand with approximately 350,000m2 of NLA, to be undertaken in coming years. The significant works requires ongoing equity support.
Managing Director Andrew Catsoulis said “Developments and expansions are a key pillar of our growth strategy. These projects deliver tangible upside for NSR, from both the perspective of long-term enhanced revenue as well as NTA uplift. Our in-house development and acquisition teams reflect our focus on acquisitions, in place developments, expansions and redevelopment projects, which are being implemented along with multiple other projects under active consideration”.
“NSR also continues to deliver strong operational performance. We have focused on maximising REVPAM by carefully balancing rate and occupancy to achieve 5.1% REVPAM growth since June 2022”. said Mr Catsoulis.
Pro forma December 2022 gearing will reduce from 27% to 24% post the Placement. This post Placement gearing assumes $81 million of committed acquisitions and $124 million committed development spend and transaction costs. The Equity Raising strengthens NSR’s liquidity position and provides NSR the funding capacity to act quickly on value accretive acquisition opportunities that may arise.
The Placement is fully underwritten by JP Morgan and Citigroup. The issue price is to be determined via a variable price bookbuild with a range of $2.33 – $2.41 per stapled security, with an underwritten floor price of $2.33 per stapled security. The bookbuild price range of $2.33 – $2.41 represents a:
- 4.0% – 7.2% discount to the last close price of $2.51 on 21 March 2023
- 4.9% – 8.0% discount to the 5-day VWAP of $2.53 up to and including 21 March 2023
New securities issued under the Placement will rank equally with existing securities from the date of issue and will be entitled to the distribution for the six months ending 30 June 2023.
Taking into account the impact of the Placement, NSR reaffirms FY23 underlying EPS guidance of a minimum of 11.5 cps, which provides a yield per share of 4.93%pa on a unit price of $2.33 per share.
More information is available in the attached presentation.
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