NSR – a good call but where are we a year later?

This time last year Tim Hannon, Chief Investment Officer of Freehold Investment Management, shared his thoughts on National Storage Reit (NSR): (VIEW LINK). Since posting, shares in NSR have added 30%+ and paid distributions of 7.8c. We touched base with Tim for an update. “National Storage continues to execute well on its acquisition based strategy and is now the largest owner-operators of self-storage assets in Australia. Whilst we concede management are delivering well, we are mildly concerned that the operating environment for NSR has deteriorated, crimping earnings growth. This issue has been highlighted by the fact that we have not seen the earnings upgrades expected from the company’s acquisitions. This indicates to us that the benefits of acquisitions for NSR are being offset by increasing vacancy rates. On this basis, we believe that we will see some potential share price volatility over the near term. Nonetheless, these operational headwinds will likely eventually subside, and the company will continue to create value over the medium to long term from consolidating the Australian self-storage sector. Freehold Funds remain long term holders of NSR.”