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Is this stock the best way to profit from Australia’s high property prices?

There are few shares on the ASX that really benefit from house prices being so high. The banks are beneficiaries because they get to write bigger loans for the same number of properties.

Another share to benefit is National Storage REIT (ASX: NSR). It’s the largest self-storage provider in Australia and New Zealand with 130 centres.

The cost of prices per square metre for property around the country have gotten so high that it has become a lot more affordable for people to store item in one of National Storage’s units compared to owning an extra bedroom for storage.

The real estate investment trust (REIT) announced late on Friday that it is making acquisitions in four locations.

In Australia it is spending $33 million on six centres. Five of the centres are in Townsville, which will add 1,565 units and 15,400 square metres of net leasable area (NLA). In Mornington it is acquiring 323 units and 3,600 square metres of NLA. Both acquisitions will be completed in May.

In New Zealand it is spending NZ$21 million on 1,006 units & 6,000 square metres of NLA in Wellington and 174 units & 1,900 square metres of NLA in Hamilton.

National Storage said that these acquisitions would be funded out of the existing debt facility.

Managing Director Andrew Catsoulis said “We are delighted to be expanding our coverage in these regions. The assets individually have significant scope for value accretion, through either growth in occupancy, rate per square metre or expansion potential.”

“These acquisitions reflect our desire to continue to build our presence in major metropolitan and regional markets, generating economies of scale and operational efficiencies from the National Storage operating platform.”

Foolish takeaway

This seems like a decent announcement from National Storage. It makes sense to expand in every major town and city across Australia and New Zealand so that it has national coverage in both countries and it builds the best economies of scale it can.

It could be a decent option for income investors with a yield of 5.8%.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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