U-Haul will continue to seek growth in its self-storage business after 12 months of adding about 3.5 million net rentable square feet—two-thirds from its own developments, one-third from acquisitions—the company reported in results for the third quarter of fiscal year 2017, which ended December 31, 2016.
“Self-storage continues to be a very competitive, very market-specific industry,” said Joe Shoen, chairman of parent company AMERCO (Nasdaq: UHAL).
“We have many projects in development, and plan to continue to bring product online in markets that will support more product,” Shoen said.
Growing footprint, growing revenue
Self-storage revenue rose $10.1 million in Q3 2017 from Q3 2016, and the average monthly amount of occupied square feet jumped by almost 13 percent. AMERCO attributed those improvements to “improved rates per square foot, occupancy gains at existing locations and from the addition of new facilities to the portfolio.”
The overall occupancy rate is at 75 percent.
Shoen said the company will continue its growth strategy for self-storage.
“It’s really a shift between what we’re developing – whether it’s a re-use or ground up—versus what we’re able to acquire. It’s hard to [predict] a dead square foot number because it’s kind of a fluid thing. I‘m attempting to actually step that up. I expect that it will happen.”
He acknowledged the rising number of retail boxes that are becoming more available for self-storage.
“I’m trying to be all over it and not alert all my competitors,” Shoen quipped. “So the less you talk about it, the happier we’ll be.”
Encouraged by Trump
AMERCO reported net earnings of $65.2 million, or $3.33 per share, in the third quarter. That compares with net earnings of $81.8 million, or $44.17 per share, in the year-ago period.
For the nine months ending Dec. 31, 2016, net earnings were $388.9 million, or $19.85 per share, compared with $436.4 million, or $22.27 per share, one year ago.
“Revenue gains in our core rental business were driven by transaction growth,” Schoen said in a news release. “I am greatly encouraged by the Trump administration and since the inauguration have committed to 3,000 additional built-in-America Ford trucks. I expect growth to accelerate and I want U-Haul ready to serve customers moving to a new job or improved living arrangements.”