Morningstar | National Storage REIT’s FVE increases to AUD 1.72 following change of analyst.
Australia and New Zealand’s highly fragmented self-storage industry, dominated by individual owner-operators, provides significant scope for National Storage to continue generating earnings from its acquisition strategy. It is the largest owner-operator of self-storage centres in Australia and New Zealand. This gives it another lever to increase earnings by developing centres in its existing portfolio. Its short lease terms, averaging less than two years over its portfolio, also provide it with levers such as dynamic occupancy and rental price management to generate earnings. However, shorter rental agreements and reliance on its acquisition and development strategy also make it more sensitive than the average passive REIT to macroeconomic factors like a downturn in economic activity, availability of capital, and population growth. Accordingly, we believe it’s at the riskier high-growth end of the REIT spectrum.NNational Storage is an owner and operator of self-storage centres. Co. is engaged in the operation and management of storage centres in Australia and New Zealand. Co.'s portfolio of owned and managed centres comprised of 105 centres, managing 59,200 storage units around Australia and New Zealand as of June 30 2016. Of the 105 self-storage properties in Co.'s portfolio, ownership is as follows: 60 self-storage centres owned by National Storage Property Trust; 16 self-storage centres operated as long-term leasehold centres (Leasehold Centres); 26 self-storage centres managed for the Southern Cross Storage Group (Southern Cross); and three third party managed centres.
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