Shawn was in Melbourne on the weekend, staying near Southbank to be precise and something caught his attention setting off a simple but interesting chain of thought.
- We have been long NSR for yield and the underlying premise that the housing crisis would be solved by higher density living leading to increased demand for storage.
However, on top of an NSR classic facility were two stories of nice-looking apartments, posing the question, could this be the start of a trend for NSR as planning permission becomes easier to obtain for housing? An apartment certainly has more initial value than a simple lock-up; in other words, an NSR land bank could have much higher value. Ownership is the core of the NSR model, although we note there is a meaningful minority of leasehold centres to support network coverage. The numbers talk for themselves:
- In Southbank: A living space (~$55 AUD/m²/month) delivers a far higher yield than self-storage space (~20–25 AUD/m²/month).
We can see NSR adding some cream to its business model moving forward. In the correct areas, selling the apartments could cover a nice chunk of the set-up costs. NSR is currently trading on the cheap side, which we believe will change over time, supported by its ~4.5% yield.
- We can see NSR making multi-year highs into 2026: MM holds NSR in its Active Growth Portfolio and Active Income Portfolio.
MM is long and bullish NSR
Add To Hit List
