The National Storage REIT (ASX: NSR) share price is dropping lower on Friday despite the release of a positive update.
In early afternoon trade the self-storage operator's shares are down almost 2% to $1.95.
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How is National Storage performing?
According to the release, National Storage has been busy with its growth through acquisition strategy and has surpassed 200 self-storage centres.
The company now has 206 centres across Australia and New Zealand following the acquisition of 17 centres and the development of two more so far in FY 2021.
This includes a major portfolio of nine centres in greater Melbourne with over 38,000m2 net leasable area (NLA) and significant opportunities for future expansion. These acquisitions and developments came at a cost of $263 million.
But it doesn't end there. Management advised that five expansion and development projects are recently completed or nearing completion. They will add 31,000m2 NLA to its current portfolio.
Record occupancy growth.
National Storage revealed that it achieved record occupancy growth of 78,000m2 during the period 1 July to 30 November. This represents 8% of its total NLA.
This took its combined Australian and New Zealand same centre occupancy to 85.7%, up from 78.9% at the end of June.
Pleasingly, the company is also seeing further improvements in its same centre revenue per available square metre (REVPAM) metric. At the end of November, its REVPAM was up 6.2% since the end of June to $207.
The company's Managing Director, Andrew Catsoulis, commented: "Despite the significant challenges faced during 2020, including M&A activity and the COVID-19 pandemic, NSR has delivered a very strong half year performance with record occupancy growth of 78,000m2 for the 5 months to 30 November 2020, combined with a 6.2% improvement in same centre REVPAM and an improving rate per square metre. Given NSR's relatively fixed cost base, the majority of this additional revenue should fall to underlying earnings."
FY 2021 Guidance.
Looking ahead, management expects its earnings per share to be at the upper end of the guidance range of 7.7 cents per share to 8.3 cents per share.
It is also expecting an FY 2021 distribution of 90% to 100% of its underlying earning.
Judging by the National Storage share price performance today, some investors may have been expecting stronger guidance.
