ANNUAL
REPORT
2024
ABOUT THIS REPORT
Welcome to National Storage REIT’s 2024 Annual Report
which reports our performance for the financial year
1 July 2023 – 30 June 2024.
THE 2024 REPORTING SUITE INCLUDES:
Annual Report – a review of FY24 performance, strategy
and governance.
Financial Report – FY24 financial accounts and detailed
financial performance.
All of NSR’s reporting is available online at
nationalstorageinvest.com.au.
Sustainability Report – outlines NSR’s approach to
sustainability. The 2024 Sustainability Report will be released
prior to National Storage REIT’s AGM and will be available
online at nationalstorageinvest.com.au at that time.
ENTITIES
National Storage Holdings Limited
ACN 166 572 845 (“NSH” or the “Company”)
National Storage Property Trust ARSN 101 227 712 (“NSPT”)
together form the stapled entity National Storage REIT
(“NSR” or the “Consolidated Group”).
RESPONSIBLE ENTITY OF NSPT
National Storage Financial Services Limited (NSFL)
ACN 600 787 246 AFSL 475 228
Level 16, 1 Eagle Street, Brisbane QLD 4000
OUR BUSINESS
5
FY24 PERFORMANCE HIGHLIGHTS
6
NSR STRATEGY
8
NSR PORTFOLIO
10
CHAIRMAN &
MANAGING DIRECTORS’ REPORT
14
INVESTMENT PARTNERS
18
THE YEAR IN REVIEW
20
BOARD OF DIRECTORS
24
CORPORATE GOVERNANCE
28
DIRECTORS’ REPORT
30
FINANCIAL STATEMENTS
63
INVESTOR RELATIONS
132
CORPORATE DIRECTORY
133
DISCLAIMER
This is the Annual Report for National Storage REIT which comprises the
combined assets and operations of National Storage Holdings Limited
(ACN 166 572 845) (“NSH”) and the National Storage Property Trust
(ARSN 101 227 712) (“NSPT”). This report has been prepared by NSH
and NSFL (ACN 600 787 246 AFSL 475 228) as responsible entity for NSPT.
National Storage REIT (ASX: NSR) currently has stapled securities on issue
on the Australian Securities Exchange (“ASX”) each comprising one unit
in NSPT and one ordinary share in NSH (“Stapled Securities”).
The information contained in this report should not be taken as financial
product advice and has been prepared as general information only
without consideration of your particular investment objectives, financial
circumstances or particular needs. This report is not an invitation, offer or
recommendation (express or implied) to apply for or purchase or take
any other action in respect of Stapled Securities.
This report contains forward looking statements and forecasts, including
statements regarding future earnings and distributions. These forward
looking statements and forecasts are not guarantees of future
performance, and involve known and unknown risks, uncertainties
and other factors, many of which are beyond the control of NSH and/
or NSFL, and which may cause actual results or performance to differ
materially from those expressed or implied by the forward looking
statements and forecasts contained in this report.
No representation is made that any of these statements or forecasts
will come to pass or that any forecast result will be achieved. Similarly,
no representation is given that the assumptions upon which forward
looking statements and forecasts may be based are reasonable.
These forward-looking statements and forecasts are based on
information available to NSH and/or NSFL as of the date of this report.
Except as required by law or regulation (including the ASX Listing Rules)
each of NSH and NSFL undertake no obligation to update or revise
these forward-looking statements or forecasts.
Certain financial information in this report is prepared on a different
basis to the Financial Report, which is prepared in accordance with
Australian Accounting Standards. Any additional financial information in
this report which is not included in the Financial Report was not subject
to independent audit or review by Ernst & Young.
TABLE OF
CONTENTS
IMPORTANT
INFORMATION
Annual Report 2024
3
Annual Report 2024
OUR BUSINESS
National Storage is Australasia’s largest self-storage
provider, tailoring self-storage solutions to approximately
97,000 residential and commercial customers at more
than 250 storage centres across Australia and
New Zealand. National Storage REIT is the only
publicly listed, pure play, fully integrated, internally
managed, owner and operator of self-storage centres
in Australasia. The National Storage offering spans
self-storage, business storage, climate-controlled wine
storage and trading, vehicle storage, vehicle and trailer
hire, packaging supplies and insurance. In addition to
the traditional self-storage offering, National Storage
provides valued services for businesses including receipt
and dispatch, corporate account management, forklifts
and pallet jacks, and versatile, adaptable spaces to suit
customers' needs. Each National Storage centre reflects
our commitment to quality, convenience and service.
At National Storage, you can expect secure, clean and
modern premises and a team of professionals trained in
providing efficient storage solutions.
APPROXIMATELY 97,000
RESIDENTIAL AND COMMERCIAL
CUSTOMERS AND MORE THAN
250 STORAGE CENTRES ACROSS
AUSTRALIA AND NEW ZEALAND.
5
Annual Report 2024
3.3yrs
Weighted
Average
Debt Tenor
FY23: 3.5yrs
0.2
$2.52
Net Tangible
Assets per
Stapled Security
FY23: $2.48
1.6%
CAPITAL STRENGTH
$5.2b
Total Asset
Value
FY23: $4.6b
13%
26.6%
Gearing
FY23: 19.8%
6.8%
OPERATIONAL HIGHLIGHTS
254
Number of
Centres
(30 June 2023)
FY23: 234
20
1,391,800
Square Metres
of Net
Lettable Area
FY23: 1,279,800
9%
81.9%
Group2
Occupancy
FY23: 84.8%
-2.9%
$275.4
Group2
Revenue per
Available Metre
FY23: $267
3.1%
66%
Operating
Margin
FY23: 66%
0%
670
Employees
FY23: 660
1.5%
FINANCIAL HIGHLIGHTS
$355.4m
Total Revenue
FY23: $330m
7.7%
$154.2m
Underlying
Earnings1
FY23: $141.8m
8.7%
11.3cps
Underlying
Earnings per
Stapled Security
FY23: 11.5cps
-1.7%
11.0cps
Distribution
per
Stapled Security
FY23: 11.0cps
0%
$4.74b
Investment 3
Properties
FY23: $4.29b
10.5%
$230.3m
IFRS Profit
FY23: $320.4m
-28.1%
1. Underlying earnings is a non-IFRS measure
(unaudited)
2. Group – Australia and New Zealand (206 centres)
n Australia – 176 centres as at 30 June 2022
(excluding Wine Ark, managed centres
and let-up centres)
n New Zealand – 30 centres as at 30 June 2022
(excluding let-up centres)
3. Net of lease liabilities
ROCKVILLE, QLD
FY24
PERFORMANCE
HIGHLIGHTS
7
Annual Report 2024
OUR MISSION:
United as one team, we commit to consistently and
responsibly deliver on our four pillars of strategic growth
Optimising occupancy
and rate growth on an
individual centre basis,
combined with prudent
cost management
OUR VISION:
To be a world leader in the provision of innovative
and sustainable self-storage solutions
NSR
VISION & MISSION
9
Annual Report 2024
1
2
3
4
ORGANIC GROWTH
ACQUISITIONS,
DEVELOPMENTS
& EXPANSIONS
TECHNOLOGY
& AUTOMATION
SUSTAINABILITY
Leadership in
development
and implementation
of innovative
technology
and automation
Instilling trust and
confidence that we
are building a resilient
and sustainable
business for our
stakeholders
Market leading
opportunities
in combination
with delivery
capabilities to drive
sustained growth
NSR
FOUR PILLARS
PERTH
DARWIN
ADELAIDE
GEELONG
MELBOURNE
LATROBE VALLEY
GOLD COAST
BRISBANE
NORTH QUEENSLAND
HAMILTON
WELLINGTON
QUEENSTOWN
CHRISTCHURCH
DUNEDIN
LAUNCESTON
HOBART
SUNSHINE COAST & NOOSA
HERVEY BAY
HUNTER & CENTRAL COAST
SYDNEY & BLUE MOUNTAINS
AUCKLAND
BAY OF PLENTY
WOLLONGONG & ILLAWARRA
WESTERN
AUSTRALIA
NORTHERN
TERRITORY
SOUTH
AUSTRALIA
QUEENSLAND
TASMANIA
CANBERRA
32
73
254
3
The National Storage portfolio
continues to grow across Australia
and New Zealand with storage
centres conveniently located in
capital cities and regional areas that
exhibit drivers of storage demand.
As at 30 June 2024.
*Map not to scale.
NSR
PORTFOLIO
11
Annual Report 2024
VICTORIA43
10
48
48
5
34
34
6
NEW SOUTH WALES
TOTAL CENTRES
ALBURY
ALBURY
REGION
CENTRES
NLA
Brisbane
36
230,850
Melbourne
42
224,600
Perth
32
182,250
Sydney
18
99,400
Gold Coast
15
80,250
Regional QLD
11
61,600
Sunshine Coast
11
60,750
Regional NSW
14
59,000
Central Coast (NSW)
11
54,000
Adelaide
10
49,800
Canberra
5
37,400
Tasmania
6
23,000
Darwin
3
17,000
Geelong
4
16,450
Gippsland
2
8,350
TOTAL
220
1,204,700
AUSTRALIAN PORTFOLIO BY NLA
REGION
CENTRES
NLA
Auckland
8
61,250
Wellington
8
45,100
Christchurch
6
22,750
Hamilton
5
20,050
Dunedin
2
17,400
North Island Regional
4
16,350
Queenstown
1
4,200
TOTAL
34
187,100
NEW ZEALAND PORTFOLIO BY NLA
FY24
FY23
Freehold
242
221
Leasehold
11
12
Managed
1
1
TOTAL
254
234
PORTFOLIO COMPOSITION
* Valuations exclude JVs and assets held for sale Exchange Rate: 1.09494
VALUATION
STATE
CENTRES
NLA
%
$M
%
MONTROSE, TAS
PORTFOLIO
STATISTICS
- JUNE 2024
QLD
73
405,050
29
1,402
30
VIC
48
241,900
17
1,046
22
NSW
43
212,400
15
711
15
WA
32
176,650
13
587
12
NZ
34
187,100
13
526
11
SA
10
49,800
4
194
4
ACT
5
37,400
3
140
3
TAS
6
23,000
2
82
2
NT
3
17,000
1
50
1
Assets Held for Sale
4
26,500
2
-
-
Joint Venture
1
15,000
1
-
-
TOTAL
259
1,391,800
100%
4,739
100%
PORTFOLIO VALUATION
TOTAL VALUATION (AUS $BILLION): $4.74 WEIGHTED AVERAGE PRIMARY CAP RATE: 5.91%
Annual Report 2024
13
FY24 also marked a number of other milestones, with
NSR entering into two significant capital partnership
and development arrangements. The first with MAAS
Group (ASX: MGH) will enable NSR to strengthen its
coverage through important growth areas across
NSW and the ACT. The MAAS Group arrangement has
already delivered five new high performing centres
to NSR in FY24, with more expected to follow on their
completion in FY25.
The new GIC-NSR Ventures Fund (Fund) has been
established to pursue the development and operation
of new self-storage centres in Australia in a cost
effective and capital efficient fashion. NSR will hold
an approximate 25% interest in the Fund, while GIC
will hold the remaining 75%. The Fund has identified
10 foundation assets which have been either recently
completed or are currently under construction by NSR
and these assets will be owned by the Fund. The Fund
plans to deploy an initial amount of $270 million and
the parties have agreed to work together to identify
future potential opportunities. The Fund will assist NSR
in expediting its development activities in a capital
efficient fashion and will enable NSR to recycle
capital currently employed in these developments
into new acquisition and development activities.
From a capital management perspective, NSR’s
gearing stands at a prudent 26.6% with an ICR of
3.2 times. Capital repatriated upon settlement of
the Fund will further strengthen NSR’s balance sheet
capacity in the short term. During the course of
FY24 NSR has again extended and improved the
headroom, scope and tenor of its debt facilities.
NSR has increased its total debt facilities to $1.84
billion with $450 million of FY25 debt maturities
extended. NSR now has an average debt term
to maturity of 3.3 years while having increased its
proportion of debt hedged from 37% in June 23 to
43% in June 24. NSR has approximately $1 billion of
headroom before it reaches the upper end of its
targeted gearing range. As a result, NSR’s capital
management strategy remains conservative, and
the company is very well positioned to execute its
strategic initiatives from an ongoing acquisition and
development perspective.
NSR’s vision statement is aspirational “to be a world
leader in the provision of innovative and sustainable
storage solutions.” Our mission is that “united as one
team, we commit to consistently and responsibly
deliver on our four pillars of strategic growth.”
FY24 marks NSR’s tenth full year of operations post its
Initial Public Offering (IPO) in December 2013. We are
also nearing 30 years since the inception of the business
in 1995 when we built our first storage centre at Oxley in
Brisbane. These milestones allow us to take a moment
to reflect upon the beneficial outcomes delivered to
NSR securityholders over this period. Since the time
of our IPO, we have grown from a modest 62 centres
and market capitalisation of $268 million, to over 250
centres with a market capitalisation approaching $3.5
billion today. Our total assets are valued at in excess
of $5 billion, and total returns to securityholders sit at
more than 300% over this period. This
includes a combined annual growth
rate (CAGR) for both our underlying
earnings and total revenue of over
20% p.a. over the last 10 years,
making us one of the best and most
consistently performing A-REITs over
this period.
Our FY24 earnings have
demonstrated both the resilience
and embedded capacity for
growth of NSR’s business, increasing
by 9% this year to $154 million,
with record total revenue of $355
million. NSR’s NTA increased by
4 cents to $2.52 as the value of
NSR’s portfolio rose by 11% to $4.7
billion, with valuation uplift again driven predominantly
by improved operational performance and an
unchanged weighted average portfolio capitalisation
rate of 5.91% across our property portfolio. NSR
achieving these results in such a challenging economic
environment is a testament to both the strength of our
business, and the relentless pursuit of excellence by
our hardworking team of over 650 dedicated people.
Underpinning this performance outcome has been
NSR’s ability to drive growth in both the average
rate achieved across its centres (up 7% to $339) and
REVPAM (up 3% to $275). Pleasingly, this REVPAM
growth was predominantly achieved through H2 of
FY24 (up 5.1% over this period on an annualised basis).
Our total built capacity has increased significantly in
FY24 to almost 1.4 million square metres – an increase
of over 9% in this financial year alone. This increase has
been achieved through a combination of ongoing
acquisition and development activity, with 12 existing
centre acquisitions accounting for approximately
50,500 square metres, and the delivery of 11 new
developments comprising 73,500 square metres of
additional NLA.
Importantly NSR is well positioned to
continue this growth trajectory into
FY25 and beyond. Our development
pipeline is comprised of 221,600
square metres of NLA across 28
projects, either development
application (DA) approved or
already under construction. Our total
development pipeline stands at an
impressive 46 projects comprising of
over 382,000 square metres of NLA,
including those projects currently
under construction, projects with DA
obtained, and new projects in the
concept design and planning phases.
The importance of this acquisition
and development pipeline cannot
be overstated. Our newly developed storage centres
have evolved to include numerous sustainability
initiatives including solar, LED lighting and highly
efficient building processes such as adaptive reuse
of construction materials. Our centre configurations
are now larger to accommodate upward trends in
long-term growth in utilisation by our ever-expanding
customer demographic. These new acquisitions and
developments, combined with strong organic growth
from our existing portfolio have underpinned our
growth in earnings in the past and will continue to
support our growth well into the future.
CHAIRMAN &
MANAGING DIRECTORS’
REPORT
WE HAVE GROWN
FROM A MODEST
62 CENTRES
AND MARKET
CAPITALISATION OF
$268 MILLION, TO
OVER 250 CENTRES
WITH A MARKET
CAPITALISATION
APPROACHING
$3.5 BILLION TODAY
PENRITH, NSW
Annual Report 2024
15
capabilities to help identify and deal with cyber
threats as well as threats to our physical property.
Machine learning is helping NSR better analyse and
understand its key customer characteristics as well
as to assist in customer demographic analysis and
segmentation. This is designed to better service our
customers’ needs by delivering the right product and
service in the right location, tailored more specifically
to our customers' needs and budget. Ultimately this
process should result in highly efficient storage centres
that are purpose-built, located in areas where they
are most needed.
In summary, NSR enters FY25 as the self-storage
industry leader in the provision of innovative storage
solutions throughout Australia and New Zealand.
Our development and acquisition capabilities are
best of class and unrivalled in this region. We are
well positioned to both consolidate our existing
business through the relentless pursuit of excellence
in our systems and processes, and to accelerate
our growth through our unrivalled pipeline of new
development and acquisition opportunities. Our new
capital partnerships will underpin the acceleration
and implementation of our growth strategies.
NSR’s operational platform is highly scalable and
significantly advantaged by being the largest owner
operated, fully internally managed, storage-specific
REIT in the southern hemisphere.
Our core focus remains to grow and improve
our business in order to maximise the return on
securityholders’ funds invested and earnings
per security.
As always, we remain deeply indebted to and
sincerely grateful for the support of all NSR’s
stakeholders including our securityholders, our hard-
working team members, Executive and Board, as well
as of course, our customers without whom we would
not have a business.
Thank you all.
Our Four Pillars of Growth Strategy include the
following core principles:
n Organic Growth - Optimise occupancy and rate
growth on an individual centre basis combined with
prudent cost management;
n Acquisitions, Developments and Expansions -
Centralised acquisition and development team
with a diversified delivery pipeline to expedite
and simplify the project delivery process and
maximise returns;
n Technology and Automation – Leadership in
development and implementation of innovative
technology and automation; and
n Sustainability - Instilling trust and confidence that
we are building a resilient and sustainable business
for our stakeholders.
NSR remains a people-focused organisation,
committed to attracting, engaging, and retaining
the best team members to optimise both individual
and organisational performance. Our ongoing staff
training and support initiatives include WellNS, which
offers meaningful assistance to employees in both
their personal and professional lives. Additionally,
through our NS Learn program, we provide continuous
learning opportunities that empower our employees
to realise their full potential whilst driving sustained
high-level business outcomes.
Our ‘NS Cares’ program, continues to flourish and
we were proud to be recognised as a nominee for
Corporate Philanthropist of the Year at the 2024
Queensland Philanthropy Awards. We are committed
to supporting the communities in which we operate,
and currently partner with charities across the
important areas of medical research, mental health,
diversity and safety, all housed under the umbrella of
“creating safe spaces” – a cornerstone of our mission
here at National Storage.
From an environmental sustainability perspective, NSR
has committed to reducing and offsetting its scope 1
and scope 2 carbon emissions by 2030. Our strategy
to achieve this goal includes our ongoing program
of solar panel installation, the introduction of smart
energy metering, LED lighting, and an investigation
into the feasibility of battery storage installation at
various centres.
Our efforts to simplify and improve our customers’
experiences when dealing with NSR include the
introduction of digital wayfinding, “no key” Bluetooth
access control systems, and a comprehensive roll-out
of a new digital phone system throughout our centres
and call-centre, designed to significantly improve
customer service and our overall response to servicing
our customers’ requirements.
More details on our ESG initiatives will be included in
our Sustainability Report.
From an innovation and automation perspective, our
key focus areas include AI-led customer interaction
initiatives as well as a 24-hour AI chat service designed
to assist with existing customer needs and new
inquiries outside of normal operating hours. NSR is also
utilising AI to assist with improving its cyber security
Andrew Catsoulis
MANAGING DIRECTOR
Anthony Keane
NON-EXECUTIVE CHAIRMAN
BLUETOOTH ACCESS
Annual Report 2024
17
National Storage has successfully added two new
investment partners, GIC and MASS Group, during
the year and continues to work with its current
investment partners to assess options for future
acquisition, development and redevelopment
opportunities. Engaging with investment partners
is a key focus of National storage as it looks to
source additional capital sources and development
opportunities and deliver mutually beneficial
outcomes to all parties.
GIC
National Storage has entered into binding
agreements with GIC to establish the new National
Storage Ventures Fund (Fund) that will pursue the
development and operation of self-storage centres
across Australia. The Fund will acquire and develop
an initial portfolio of 10 foundation assets sourced
from NSR’s existing development portfolio. NSR and
GIC will hold approximately 25% and 75% equity
interests respectively in the Fund and will deploy
approximately $270 million of total capital over
the initial 12 – 18-month period. Financial close of
the Fund remains subject to satisfaction of certain,
customary, conditions precedent.
MAAS GROUP
The MAAS Group partnership sees National Storage
acquire MAAS Group's existing portfolio of nine high-
quality assets, enhancing NSR’s market position in
NSW and the ACT. The assets are a mix of established
centres plus centres under development and will
add more than 34,000m2 of additional NLA to the
NSR portfolio, providing synergies with existing NSR
centres. The transaction establishes a relationship to
pursue future development opportunities, either by
development (turnkey) or joint venture agreements
with six potential locations initially identified.
PARSONS GROUP
Parsons Group is one of Perth’s leading self-
storage construction companies and this venture
continues to reinforce the National Storage brand
as a prominent player in the Perth market. Various
sites in and around Perth have been identified as
part of the arrangement, whereby Parsons Group
constructs high-quality self-storage centres branded
as National Storage. The partnership to date has
delivered multiple new self-storage centres and
expansions, with additional locations currently under
design and construction. Over the last year, multiple
new sites have been reviewed and added to the
development pipeline and are currently in various
stages of due diligence and planning.
BRYAN FAMILY GROUP (BFG)
National Storage and BFG have undertaken
numerous development projects in recent years
including a site at Moorooka in Brisbane, Biggera
Waters on the Gold Coast, and associated Treasure
Cove Commercial precinct. FY24 saw several
of these projects mature with NSR acquiring the
Moorooka and Biggera Waters developments
and BFG acquiring the Treasure Cove Commercial
precinct. This capital was recycled into a new
self-storage development at Bundamba, west
of Brisbane.
OTHER PARTNERS
National Storage continues to work with numerous
other development partners for the construction
of quality self-storage centres. These partnerships
have delivered multiple new self-storage centres
over recent years, with additional centres currently
under construction across Australia and New
Zealand. In addition, several centres are currently in
various stages of design, planning and construction
which, when delivered, will add further capacity to
the National Storage network.
MOOROOKA, QLD
19
Annual Report 2024
INVESTMENT
PARTNERS
ASSET MANAGEMENT
National Storage achieved positive revenue results
in FY24, through the collaborative efforts of the wider
Revenue Operations team. Their application of
optimised revenue management principles maximised
occupied revenue growth, while also driving key
performance metrics despite some demand-driven
fluctuations in occupancy. By using AI-supported
forecasting and sensitivity modelling, our team ensured
optimised rate per square metre was delivered for
each unit across the portfolio.
The 30 June 2024 REVPAM across the Australia and
New Zealand portfolio (206 centres as at June 2023,
excluding let-up centres) was $275/m2, a 3.1% increase
from the June 2023 result of $267/m2. Occupancy
across the portfolio on this same basis also reduced
slightly to 81.9% (June 2023: 84.8%).
Throughout the year, the National Storage operations
team in Australia and New Zealand delivered strong
results despite prevailing economic challenges.
Emphasising sales training, team development,
enhanced marketing strategies, and technological
advancements bolstered our conversion rates.
Improvements to our internal sales platform
facilitated enhanced customer service through
automation and optimisation, effectively meeting the
evolving needs of the market. The expansion of our
operational leadership teams, through both internal
advancements and external hires, underscores our
commitment to growth.
ACQUISITIONS
National Storage continues its growth strategy to
strengthen and scale its portfolio of high-quality
storage assets. This strategy will enable National
Storage to continue to position itself with an
unrivalled cohesive network of self-storage centres in
targeted markets. The pursuit and execution of this
growth strategy aligns with a key NSR Board pillar of
Acquisitions, Developments and Expansions.
In FY24 National Storage successfully transacted,
acquired and integrated 14 strategically positioned
‘going concerns', 10 new development sites, and
proactively continues to deliberately pursue high-
quality acquisitions across Australia and New Zealand.
National Storage’s ability to integrate new assets
into the existing portfolio, leveraging existing business
operations for centre efficiencies and revenue growth,
continues to deliver a competitive advantage.
Scale, asset quality and performance, and sustainable
growth are the cornerstone of the strategy.
DEVELOPMENT AND EXPANSION
National Storage’s focus on systematically expanding
capacity with the delivery of high-quality new build
assets continues. Its Development and Expansion
pipeline is delivering substantial additional lettable
area into the portfolio in a sustainable structured
manner. In addition, it also proactively undertakes
selected centre optimisations to improve centre
efficiency and add further built capacity where
appropriate redevelopment opportunities exist.
In FY24, National Storage delivered 11 new
Development and Joint Venture projects into the
portfolio. It currently has 20 major projects under
construction and is targeting to complete construction
of 17 of these in FY25.
National Storage’s current development pipeline of
deliverable NLA has increased from 360,000m2 in FY23,
to approximately 380,000m2. National Storage also
currently has 26 active projects in Design Authority
Approval, or early Procurement phase, providing NSR
with the opportunity to selectively continue to break
ground on new sites in both infill locations and new
markets in ensuing years.
21
Annual Report 2024
THE YEAR
IN REVIEW
COBURG, VIC
IN FY24 NATIONAL STORAGE
DELIVERED 11 NEW
DEVELOPMENT & JOINT
VENTURE PROJECTS
INTO THE PORTFOLIO
WINE ARK
Wine Ark is Australia’s largest wine storage
provider and is a part of the National Storage
group. Housing over two million bottles of fine
wine, Wine Ark operations take place across 15
centres for clients located in over 20 countries.
There are few businesses in Australia with more
experience in the exacting task of storing and
managing premium wine. Wine Ark’s wine
storage functions are complemented by a
compelling wine sales offering giving clients the
opportunity to acquire new release wines from
iconic Australian
and overseas
vendors,
coupled with the
opportunity for
existing clients,
restaurants, and
the broader
wine-buying
public to
purchase
surplus wine
in Wine Ark’s
storage.
Wine Ark's
newest cellar in
development
is located
at Coburg,
Melbourne, and is set for completion during Q1
FY25. This brand-new build totals 2,700 sqm and
consists of a 50 percent split between managed
storage and private vault storage.
Throughout FY24, Wine Ark continued to
strengthen its relationship and involvement
in the greater wine trade industry, supporting
the endeavours of The Len Evans Tutorial, The
Wine Communicators of Australia, Sommeliers
Association of Australia and Commanderie de
Bordeaux (Australian Chapter).
HOUSING OVER
TWO MILLION
BOTTLES OF FINE
WINE, WINE ARK
OPERATIONS
TAKE PLACE
ACROSS 15
CENTRES
FOR CLIENTS
LOCATED
IN OVER 20
COUNTRIES.
WINE ARK, NSW
23
Annual Report 2024
MARKETING AND
CUSTOMER EXPERIENCE
The FY24 marketing strategy is focused on enhancing
our advertising through data and machine learning to
ensure National Storage is at the forefront of a rapidly
changing digital landscape. With continued investment
in our key digital channels, National Storage is ensuring
the future success of the customer acquisition strategy.
Our focus on customer acquisition is supported by a
streamlined Contact Centre with an improved focus
on technology and automation, bringing an improved
customer experience.
Our customers have been supported by a new
Centralised Service team who manage various
aspects of the customer experience from arrears to
feedback. In FY24 we also expanded our New Zealand
Contact Centre to further assist in driving business
efficiencies while better supporting our New Zealand
customer base.
Automated centre maps were introduced in FY24
which allows for a customer to be guided to their unit
through an interactive digital experience. Customers
can now book National Storage trailers directly through
the website, providing a total solution experience to
National Storage customers.
Sponsorships continued to play a strong role in the
National Storage marketing portfolio, which has
assisted in broadening the awareness of the brand
across Australia and New Zealand. A digital data
focus across our campaigns continued to drive strong
engagement results.
National Storage has continued its support of four major
charitable partners (Lifeline, the Mater Foundation,
RizeUp, and Youngcare) through the NS Cares
community support initiative, while also supporting a
wide range of organisations through our Community
Units Program. This ongoing community engagement
showcased our commitment to supporting the
communities in which we operate.
Our unwavering commitment to prioritising our
customers and their unique experience with the
National Storage brand remained the cornerstone
of our marketing approach in FY24. By promptly
addressing customer needs and ensuring seamless
interactions with National Storage, we successfully
enhanced convenience and drove growth to achieve
our objectives.
25
Annual Report 2024
BOARD OF
DIRECTORS
Anthony is an experienced finance and business executive with
an extensive background in banking and business management.
Prior to accepting his directorship with National Storage,
Anthony held numerous leadership roles with a major trading
bank principally in business, corporate and institutional banking.
He is actively involved in the business community through
Non-Executive Director and Advisory Board roles, and finance
advisory consultancies.
Anthony is a Director of ASX listed EMvision Medical Devices Ltd
(EMV). Anthony has a Bachelor of Science (Mathematics) from
University of Adelaide and a Graduate Diploma in Corporate
Finance from Swinburne. He is a Fellow of the Financial Services
Institute of Australasia, a Graduate of the Australian Institute of
Company Directors, and a Fellow of the CEO Institute.
Anthony is Chair of the Nomination Committee and is a member
of the Audit and Risk Committee and Remuneration Committee.
Inma brings her financial expertise and diverse range of
commercial experience to the NSR Board. As a senior finance
executive, she has held leadership roles spanning Financial
Control, Internal Audit and Risk Management within top
multinationals in Energy, FMCG and Banking. In addition, she
has governance experience as Chair of Finance, Audit and
Risk Committees across several boards.
Inma is currently a non-executive director of Children's
Health Queensland Hospital and Health Service, UN Women
Australia and Guide Dogs Queensland. She holds a BA Hons
(Economics and Commerce) from the University of Valencia,
Spain, is a Fellow of the Association of Chartered Certified
Accountants, and is a Graduate of the Australian Institute of
Company Directors.
Inma is a member of the Audit and Risk, Nomination, and
Remuneration Committees.
Howard has over 35 years’ involvement in the Australian property
industry, as an analyst, investor and fund manager. Howard
cofounded Property Investment Research Pty Ltd (PIR) in 1989,
which during the 1990s was considered a leading researcher
of both listed and unlisted property funds. In 1998 Howard was
instrumental in establishing the funds management business
of APN Property Group Limited. During this period, he was
responsible for the establishment and operations of several funds
investing both directly and indirectly in real estate.
Since 1998, Howard has been a director (or the director of the
responsible entity) of numerous listed and unlisted real estate
investment vehicles.
Howard is Chair of the Audit and Risk Committee and is a
member of the Nomination and Remuneration Committees.
Scott has over 25 years’ experience in the technology and
telecommunications sector across the Asia Pacific region,
including a breadth of experience gained from working for large
global telecommunication organisations before founding his own
successful managed service provider company. Scott holds a
Bachelor of Business (Marketing) from the Queensland University
of Technology, and has extensive experience in technology and
leadership positions. Having successfully co-founded Comlinx
(Managed Service Provider) in 2006, he went on to sell that
business to ASX listed Telecommunications provider Over the Wire
(ASX: OTW) in 2018 and continued in the senior leadership team,
taking over the role of CEO of OTW in February 2020. OTW has
subsequently been sold to Aussie Broadband (ASX: ABB).
Scott is currently serving on the Advisory Board and as an investor
at Rockfish Data Inc. a San Francisco-based software company
focused on developing synthetic data for AI and machine
learning applications. Additionally, he is a member of the
Advisory Board at HEAL Software Inc. a company specializing in
AI-driven IT operations (AiOps).
Scott is Chair of the Remuneration Committee and is a member
of the Audit and Risk Committee and Nomination Committee.
Independent
Non-Executive Chairman
BSc(Maths), GradDipCorpFin
Independent
Non-Executive Director
BA Hons (Economics and
Commerce), FCCA, GAICD
Independent
Non-Executive Director
BEc
Independent
Non-Executive Director
BBus (Marketing)
Scott
SMITH
Howard
BRENCHLEY
Anthony
KEANE
Inma
BEAUMONT
General Counsel
LLB (Hons) and BintSt
Managing Director
LLB, GradDip Project Mgmt
27
Annual Report 2024
EXECUTIVES &
COMPANY SECRETARY
A founder of the National Storage business, Andrew has over 25
years’ of specific self-storage industry expertise including in the
areas of acquisitions, developments, integration and operation
of ‘greenfield’ and developed self-storage centres.
Andrew is a qualified solicitor who has been admitted to the
Supreme Court of Queensland. He has had extensive experience
in the fields of finance, commercial and property law during his
tenure at major law firms both in Australia and overseas. He is
also a qualified project manager and has considerable property
development experience both within the storage industry and in
broader markets.
Andrew was instrumental in the successful acquisition and
integration of the original pre-existing Group portfolio and led
the Company through the IPO and planned and negotiated the
acquisition of the Southern Cross portfolio in 2016. He has led the
company in its growth from a single centre in 1996 to over 200
centres today and has been primarily responsible for charting its
strategy over that period.
Emily, appointed as Chief Counsel at National Storage in 2020 and
subsequently promoted to General Counsel in 2023, oversees the
legal function of the organisation. Emily holds a Bachelor of Law with
Honours, an International Studies degree and has been admitted to
the Supreme Court of Queensland and South Australia.
Emily has over 17 years’ experience in the legal industry having
spent 14 years in private practice with HopgoodGanim and Piper
Alderman’s Corporate, Mergers and Acquisitions and Commercial
teams prior to her holding a Corporate and Commercial in-house
role with Canstar.
Since joining National Storage, Emily has played a key role in
steering the company’s legal strategy. Her legal acumen, combined
with a sound understanding of the business landscape, positions
her to work closely with the other members of the Executive in
driving the company’s pillars, notably, organic growth, acquisitions,
developments and expansions, technology and innovation,
and sustainability.
Nick has played an integral role in catalysing the growth and
expansion of the company’s asset base since 2017. As a driving force
behind the establishment and continuous management of National
Storage’s Development division, Nick currently leads and oversees all
development and acquisition activities within the organisation with
his expertise that spans public, private, and not-for-profit sectors, in
commercial, industrial, and residential property development.
Nick’s focus remains firmly on identifying and pursuing strategic
expansion opportunities through both development and acquisition
within his executive capacity.
Katherine was appointed Company Secretary on 27 March 2024 on
a part-time interim basis and will join National Storage in a full-time
permanent capacity from October 2024.
Katherine holds a Bachelor of Laws (Hons) and Bachelor of Arts
(majoring in Economics and French) from the University of Queensland,
and is admitted as a solicitor of the Supreme Court of Queensland.
Katherine is a qualified (Chartered) Company Secretary, holding
a Graduate Diploma of Applied Corporate Governance from the
Governance Institute of Australia.
Katherine has 15 years’ of legal and company secretarial experience
advising numerous ASX-listed companies, and specialising in mergers &
acquisitions, equity capital markets, corporate advisory, governance
and risk management. Katherine has previously served as company
secretary and in-house legal counsel for dual listed Michel Hill Jeweller, in
addition to having over a decade of private practice experience with
major law firms in Australia. She joins National Storage from her position
as a Partner of national commercial law firm, Holding Redlich Lawyers.
Stuart joined National Storage in late 2014, with extensive
experience in the energy sector in coal and gas fired power
generation. He has held wide ranging finance and commercial
management roles, including as Commercial Manager for
Energy Developments Limited.
Prior to this, Stuart was Commercial Manager on the delivery of
a multi-site gas fired power generation project and micro-LNG
plant. He has significant experience in project financing, mergers
and acquisitions, and project development. Stuart holds a
Bachelor of Business, is a Certified Practising Accountant and is a
graduate of the Australian Institute of Company Directors.
Chief Financial Officer and
Chief Investment Officer
BBus, CPA, GAICD
Emily
ACKLAND
Head of Acquisitions
and Developments
BPropEcDev
Nick
CRANG
Stuart
OWEN
Andrew
CATSOULIS
Company Secretary
LLB(Hons), BA, GradDipLegPrac
Katherine
HAMMOND
MAIDSTONE, VIC
SUSTAINABILITY
This year will see the release of National Storage’s
eighth stand-alone sustainability report. The report
is expected to be released in October 2024, prior
to National Storage’s AGM and will be published
online at nationalstorageinvest.com.au. The report
will detail National Storage’s progress across its four
sustainability pillars being strategy, people, environment
and governance. Further, the environmental, social
and governance aspects of the organisation will be
considered through our short, medium, and long-term
sustainability targets, including National Storage’s
commitment to reducing and offsetting its Scope 1
and 2 emissions by 2030.
CORPORATE GOVERNANCE
The National Storage Boards are responsible for
ensuring that the organisation has an appropriate
corporate governance framework in place to protect
and enhance the entities' performance and build
sustainable value for securityholders. The corporate
governance framework is based on the ASX Corporate
Governance Council’s Corporate Governance
Principles and Recommendations (4th Edition).
More information is provided in NSR’s Corporate
Governance Statement, which can be viewed online at
nationalstorageinvest.com.au.
29
Annual Report 2024
CORPORATE
GOVERNANCE
Annual Report 2024
31
KEY HIGHLIGHTS
Group
FY24
FY23
Change
Total Revenue
$355.4m
$330.0m
8%
IFRS profit after tax
$230.3m
$320.4m
(28%)
Earnings per stapled security
16.90cps
25.75cps
(34%)
Underlying earnings(1)
$154.2m
$141.8m
9%
Underlying earnings per stapled security(1)
11.3cps
11.5cps
(2%)
Net operating cashflow
$184.4m
$188.3m
(2%)
Distribution per security
11.0cps
11.0cps
0%
-
Portfolio
At June
2024
At June
2023
Change
Number of Centres owned/managed & licenced (Total)
253/1 (254)
233/1 (234)
20/0 (20)
Group occupancy(2)
81.9%
84.8%
(2.9%)
Group REVPAM(2) (Revenue per available metre)
$275
$267
3.1%
Weighted Average Primary Cap Rate
5.91%
5.91%
0%
-
Investment Properties(3)
$4.88b
$4.29b
14%
Portfolio Valuation Uplift
$143m
$213m
(33%)
Acquisitions / Centres(3,4)
$147m / 12
$120m / 11
$27m / 1
Net Lettable Area (NLA) (sqm)
1,391,800
1,279,800
9%
Balance Sheet
At June
2024
At June
2023
Change
Total Assets(5)
$5.17b
$4.58b
13%
Debt drawn(5)
$1,399m
$947m
$452m
Interest Rate Swaps(5)
$596m
$346m
$250m
Gearing
26.6%
19.8%
6.8%
Weighted average cost of debt (Inc swaps)
5.14%
4.94%
20bps
Weighted average debt tenor (years)
3.3
3.5
(0.2)
Net Tangible Assets (NTA)
$2.52
$2.48
2%
PRINCIPAL ACTIVITIES
Listed on the ASX in December 2013, NSR’s Vision is “To be a world leader in the provision of innovative and
sustainable self-storage solutions”. NSR is the largest self-storage owner/operator across Australia and New
Zealand, providing tailored storage solutions to approximately 97,000 customers. NSR’s extensive portfolio of
owned, managed and licenced centres continues to expand, having grown the network from 62 centres at
IPO in December 2013 to 256 centres at the date of this Directors’ Report.
Net Lettable Area (NLA) growth in built capacity is also achieved through development, expansion and
redevelopment with 11 newly constructed and expanded storage centres delivered during the Reporting
Period adding 73,500m2 of NLA and a further 46 projects in various stages of design, construction and delivery.
NSR now manages approximately 130,000 storage units across approximately 1.4 million square metres of NLA
in Australia and New Zealand. NSR’s storage centres have the largest average NLA per centre of its listed
Australian peers at 5,500m2 per centre, providing greater scope for centre profitability and better economies
of scale.
FY24 also marked a number of other milestones, with NSR entering into two significant capital partnership and
development arrangements. The first with MAAS Group will enable NSR to strengthen its coverage through
important growth areas across NSW and the ACT. The arrangement with MAAS Group has already delivered
five new high performing new centres to NSR in FY24, with more expected to follow on their completion in
FY25.
1 Underlying earnings is a non-IFRS measure (unaudited), see table within Operating Results for reconciliation
2 Group – Australia and New Zealand (206 centres)
Australia – 176 centres as at 30 June 2022 (excluding Wine Ark and let-up centres)
New Zealand – 30 centres as at 30 June 2022 (excluding let-up centres)
3 Investment properties (including assets held for sale) net of lease liability
4 Excluding transaction costs
5 NZD/AUD exchange rate of 1.0949
DIRECTORS'
REPORT
Annual Report 2024
33
The impact on operations due to economic uncertainties and higher interest rates remain relatively modest.
The operational result for the full year reflects the highly resilient nature of NSR’s business model and its well-
executed growth strategy, as well as the high level of competency and commitment demonstrated by the
NSR team across all aspects of the business.
$m
FY24
FY23
IFRS Profit after tax
$230.3
$320.4
Plus tax expense
$11.5
$13.8
Plus restructuring costs
$4.9
-
Plus amortisation of interest rate swap reset
$3.5
$5.4
Less fair value adjustments and FX movement
($86.3)
($189.4)
Less lease diminution on leasehold investment properties
($9.7)
($8.4)
Underlying Earnings
$154.2
$141.8
Weighted average securities on issue (refer note 20)
1,361,883,416
1,236,914,113
Underlying earnings per stapled security
11.3cps
11.5cps
CASH MANAGEMENT
Cash and cash equivalents as at 30 June 2024 were $55.2 million compared to $67.3 million at 30 June 2023.
Subsequent to 30 June 2024, the cash balance has been utilised to facilitate further acquisitions and the
upcoming payment of the distribution on 2 September 2024. Net operating cashflow for the year decreased
2% to $184.4 million (2023: $188.3 million).
An interim distribution of 5.5 cents per stapled security ($74.9 million) was paid on 1 March 2024 with an
estimated final distribution of 5.5 cents per stapled security ($75.4 million) declared on 19 June 2024, to be paid
on 2 September 2024. This totals a full year distribution of 11.0 cents per stapled security, against underlying
earnings per security of 11.3 cents, representing a payout ratio of 97%, within the target payout ratio of 90% -
100% of underlying earnings.
During the Reporting Period NSR once again offered a Distribution Reinvestment Plan (DRP) which enables
eligible securityholders to receive part or all of their distribution by way of securities rather than cash.
For the December 2023 interim distribution approximately 28% of eligible securityholders (by number of
securities) elected to receive their distributions as securities totalling approximately $20.9 million. The DRP price
was set at $2.2692 which resulted in 9,223,656 new securities being issued.
The June 2024 final distribution has seen approximately 34% of eligible securityholders (by number of securities)
elect to receive their distributions as securities totalling approximately $25.4 million. The DRP price was set at
$2.3681 which will result in approximately 10,725,000 new securities being issued.
NSR actively manages its debt facilities to ensure it has adequate investment capacity to fund future
acquisitions, developments and working capital requirements. During the year ended 30 June 2024, NSR
extended all facilities maturing in FY25, negotiated an additional $325 million (equivalent) of additional
facilities, and repaid $100m of term loan facilities.
As at the Reporting Date, the Consolidated Group’s borrowing facilities are $1,841 million (2023: $1,617 million),
with approximately $442 million undrawn and available. NSR’s weighted average debt tenor as at the
Reporting Date is 3.3 years (2023: 3.5 years). NSR actively monitors its debt structure with the aim of increasing
diversity of funding sources and extending the average debt tenor. NSR’s gearing level as at 30 June 2024
was 26.6% (2023: 19.8%) against a target gearing range of 25% - 40%, demonstrating a conservative position in
the current debt environment and providing flexibility and the ability to act expeditiously on acquisition and
development opportunities as they arise.
NSR utilises interest rate derivatives in accordance with its hedging policy. This hedging policy is reviewed on a
regular basis. As at the Reporting Date interest rate hedges totalling $596 million were in place (2023: $346
million) with expiry dates ranging from September 2024 to September 2030.
ACQUISITIONS AND INVESTMENTS
NSR considers its ability to acquire and integrate quality self-storage assets to be one of the key drivers of its
growth strategy and best-in-sector success to date. NSR’s dedicated in-house acquisitions team leads the
market in identifying, facilitating and transacting on acquisitions that are considered to be appropriate for
inclusion in the NSR portfolio. NSR critically assesses each potential acquisition against criteria such as:
•
location and surrounding demographics of local catchment area;
•
competition and potential for future competition within the primary (3km) and secondary (5km)
competitive radial areas;
•
exposure to passing traffic – typically a minimum of 30,000 cars per day targeted;
The new GIC-NSR Ventures Fund (Fund) has been established to pursue the development and operation of
new self-storage centres in Australia in a cost effective and capital efficient fashion. NSR will hold an
approximate 25% interest in the Fund, while GIC will hold the remaining 75%. The JV has identified 10
foundation assets which have been either recently completed or are currently under construction by NSR and
these assets will be owned by the Fund. The Fund plans to deploy an initial amount of $270 million and the
parties have agreed to work together to explore future potential opportunities. The Fund will assist NSR in
expediting its development activities in a capital efficient fashion and will enable NSR to recycle capital
currently employed in these developments into new acquisition and development activities.
The value of Investment Properties(3,5) on NSR’s balance sheet has increased by 14% during the Reporting
Period to $4.88 billion as at 30 June 2024.
Of the 256 self-storage properties in the NSR portfolio at the date of this report, ownership is as follows:
•
240 self-storage centres owned by NSPT group (Freehold Centres)
•
4 self-storage centres owned by NSPT group and Held for Sale as at 30 June 2024
•
11 self-storage centres operated as long-term leasehold centres (Leasehold Centres)
•
1 third party managed centre
During the Reporting Period, NSR converted one of its Leasehold Centres to a Freehold Centre by acquiring
the underlying freehold property interest from the former owner in addition to acquiring three leaseholds which
formed part of existing freehold centres. The ownership of both the business and the freehold of this centre
now sits with NSR.
BUSINESS STRATEGY
NSR’s objective is to deliver investors consistent and growing income and distribution streams from a portfolio
of geographically diversified high-quality self-storage assets. NSR strives to drive income and capital growth
through active asset and portfolio management (including the acquisition, development or redevelopment
and portfolio recycling of self-storage centres).
The key drivers of NSR’s business are:
•
Organic Growth - NSR achieves organic growth through a combination of occupancy and rate
increases assessed on an individual centre basis
•
Acquisitions, Development and Expansion - NSR has executed over 175 high-quality acquisitions since its
IPO in December 2013 – a growth rate unmatched in the Australasian market. NSR has proven in-house
expertise which enables it to identify, negotiate and deliver strategic development, expansion and
refurbishment projects in an efficient and effective manner
•
Technology and Innovation - NSR leads the Australasian storage industry with new technology and
innovation projects designed to improve operational efficiency and enhance the customer and
employee experience, providing an important competitive advantage over its peers
•
Sustainability – through NSR’s comprehensive Environmental, Social and Governance framework, NSR
focuses on creating trust and confidence that we are delivering sustainable outcomes for our
stakeholders and the environment.
Further details on these key business drivers can be found elsewhere in the NSR 2024 Annual Report and NSR’s
Sustainability Report.
REVIEW AND RESULTS OF OPERATIONS
The Financial Statements of NSR are prepared in compliance with Australian Accounting Standards and the
requirements of the Corporations Act 2001 (Cth).
OPERATING RESULTS
IFRS Profit after tax for the Reporting Period was $230.3 million delivering IFRS EPS of 16.9 cents per stapled
security. The exceptional operating performance of the portfolio for the Reporting Period saw underlying
earnings increase by 8.7% to $154.2 million.
NSR achieved underlying earnings per stapled security of 11.3cps for the 2024 financial year, a decrease of
1.7% over the previous 12 months. The decrease was driven by a 17.2% increase in finance costs mainly
relating to interest being expensed upon completion of new developments, which was partly offset by strong
revenue growth driven by rate per square metre increases, as well as contributions from acquisitions and new
developments. Occupancy across the Group has reduced by 2.9% to 81.9%, largely through trading in slower
economic conditions. NSR remains well positioned to capitalise on the future growth in the industry and
economy. Strong growth in Group rate of 7.1% to $339/m2 helped deliver Group REVPAM growth of 3.1% to
275/m2. REVPAM growth was strongest across Australia (+3.7%) with New Zealand reducing slightly (1.6%) as a
result of the impact of the tougher New Zealand economic conditions. Let-Up centres (those recently built or
expanded) filled strongly with approximately 11,000m2 of new NLA filled during the Reporting Period and an
additional 73,500m2 of built NLA added to the portfolio.
Annual Report 2024
35
•
organic growth through increases in rate and occupancy at an individual centre level, overlayed with
prudent cost control;
•
growth by acquisition of quality storage centres across Australia and New Zealand, development,
expansion and redevelopment activity focused on high-quality new self-storage developments in key
locations and evaluating its existing portfolio for expansion, development or re-development
opportunities, while exploring portfolio recycling opportunities;
•
technology and innovation – harnessing new technology, innovation and AI to bring further
efficiencies and economies of scale to NSR’s existing business model: and
•
Sustainability through NSR’s comprehensive Environmental, Social and Governance framework, NSR
focuses on delivery outcomes that are sustainable, for investors, employees, partners and the
environment, while maximising returns for its stakeholders.
DIVIDENDS AND DISTRIBUTIONS
NSR has paid or declared distributions totalling 11.0 cents per stapled security for the Reporting Period,
representing 97% of underlying earnings per stapled security of 11.3 cents:
•
An estimated final distribution of 5.5 cents per stapled security for the 6 months to 30 June 2024. The
distribution is expected to be paid on 2 September 2024 and is expected to contain a tax deferred
component.
•
An interim distribution of 5.5 cents per stapled security for the period 1 July 2023 to 31 December 2023
which was paid on 1 March 2024 which included a tax deferred component.
ENVIRONMENTAL REGULATION
NSR’s operations are not regulated by any environmental law of the Commonwealth or a State or Territory
enacted specifically for NSR. However, as part of its operations, NSR must comply with broader environmental
laws. NSH management on behalf of NSR has in place procedures to identify and ensure compliance with
such laws including identifying and obtaining necessary approvals, consents or licences.
There have been no known material breaches during the Reporting Period of any environmental laws to which
NSR is subject.
RISK MANAGEMENT
NSR is committed to maintaining a robust system of risk oversight, management, and internal controls, fostering
an environment where effective risk management practices are deeply ingrained within our business. We
remain committed to proactively and efficiently managing risks throughout the organisation to instil
confidence in our Board and other stakeholders.
The Board of Directors holds the responsibility for ensuring the efficacy of NSR's risk management framework,
which assesses and addresses risks concerning operational, regulatory, reputation, and financial aspects
impacting the business.
This framework establishes the basis and protocols for designing, implementing, monitoring, reviewing, and
continuously improving risk management throughout the organisation, aligning with the principles outlined in
the ASX Corporate Governance Principles and Recommendations (Fourth Edition) and incorporating
guidelines from the Australian Standard AS/NZS ISO 31000:2018 Risk management – Principles and guidelines.
The Audit and Risk Committee supports the Board in overseeing the effectiveness of NSR’s risk management
system by reviewing compliance in areas identified as particularly sensitive to risk. The Committee Charter is
available to view on our investor website: nationalstorageinvest.com.au/governance/.
The Board has entrusted the Managing Director with overall operational responsibility for the risk management
function. The Managing Director receives support from the Executive Management Team, with the Chief
Financial Officer /Chief Investment Officer overseeing financial risks and financial reporting matters, and the
General Counsel in their capacity as the Group’s Risk Officer handling the administration of the risk
management function.
Each department assumes responsibility for identifying and managing their respective risks. To promote
consistency in capturing and reporting risks, NSR operates an enterprise-wide risk management system across
the Group.
During FY24, NSR was met by variable economic conditions, interest rate volatility, and emerging regulatory
and policy changes. We continued to consider both our operational and responsible entity functions in
applying NSR’s risk management principles when communicating, identifying, analysing, evaluating, and
treating risks and opportunities across the business. For further detail on our principles, please refer to our Risk
Management Policy available on our investor website: nationalstorageinvest.com.au/governance/.
•
build quality and opportunities for value adding such as expansion potential, surplus land, occupancy
runway or potential for rate per square metre improvement;
•
proximity to major drivers of storage demand such as retirement villages, new housing development
and / or medium density apartment or townhouse developments and major shopping centres; and
•
environmental, sustainability and climate change risk.
NSR has executed on its focused acquisition strategy with 12 new storage centres, the freeholds of 5 previously
leasehold storage centres, 10 development and 2 commercial sites acquired during the reporting period for a
total of $250 million. Since the Reporting Date to the date of this Directors’ Report, NSR has settled one storage
centre centre, and four development sites, for total consideration of $62.2m.
NSR revalues all assets each Reporting Period through a combined process undertaken by both external
independent valuers and internal valuations. Internal valuations are based on valuations and methodologies
from independent valuers (m3 Property and Cushman & Wakefield). After having undertaken this process,
the weighted average primary capitalisation rate of NSR’s portfolio remained consistent at 5.91% and the
value of the 30 June 2024 portfolio increased by $143 million, with the majority of this uplift driven by improved
operating performance. This contributed to the 2% increase in NTA which now sits at $2.52 per stapled
security, up from $2.48 per stapled security in June 2023.
Acquisitions for the Year Ended 30 June 2024
Region
Number of
Centres
NLA
(m2)
New South Wales
5
15,200
Queensland
2
13,400
Victoria
3
13,300
Australian Capital Territory
1
4,400
New Zealand
1
4,200
Total
12
50,500
Development Sites
10
Acquisition of Freehold
5
Commercial Sites
2
Total
29
INVESTMENT IN JOINT VENTURES AND ASSOCIATES
National Storage and Bryan Family Group (BFG), including The Bryan Foundation, have undertaken numerous
development projects in recent year including a site at Moorooka in Brisbane, Biggera Waters on the Gold
Coast and associated Treasure Cove Commercial precinct. FY24 saw several of these projects mature with
NSR acquiring the Moorooka and Biggera Waters developments and BFG acquiring the Treasure Cove
Commercial precinct. This capital was recycled into a new self-storage development at Bundamba, west of
Brisbane, established within a new joint venture vehicle.
In June 2024 National Storage entered into binding agreements with GIC (GIC) to establish the new National
Storage Ventures Fund (Ventures JV) that will pursue the development and operation of self-storage centres
across Australia. The Ventures JV will acquire and develop an initial portfolio of 10 foundation assets sourced
from NSR’s existing development portfolio. NSR and GIC will hold approximately 25% and 75% equity interests
respectively in the Ventures JV and will deploy approximately $270 million of total capital over the initial 12 – 18
month period. Financial close of the Ventures JV remains subject to satisfaction of certain, customary,
conditions precedent.
NSR has been appointed to manage the above projects and generates income from its provision of a range
of services including design and development, project management, corporate administration and centre
operations.
LIKELY DEVELOPMENTS
NSR utilises its position as Australia's first ASX listed, pure play, internally managed, fully integrated, sector
specific, self-storage REIT in order to execute its stated “Four Pillars” strategy. This embodies:
Annual Report 2024
37
Moving forward, we remain steadfast in our commitment to positioning NSR for enduring success by promptly
addressing risks that could impede the realisation of our strategic objectives.
KEY RISKS AND OPPORTUNITIES
A number of the risks and opportunities faced by NSR and how NSR responds to these risks and opportunities
are set out below. These are not the only risks and opportunities associated with NSR and are not in order of
importance.
Key Risks and Opportunities
How NSR is responding
Strategic and Financial Performance
Strategic and Financial performance
of our business is subject to various
risks including but not limited to
economic conditions and legislative
and regulatory factors.
•
Continual strategy oversight and development by the Board,
Managing Director, and Executive Management Team
•
Diverse centre portfolio located across Australia and New
Zealand, providing a range of storage offerings to different
customer types
•
An acquisitions and development pipeline aimed at
optimising asset returns and upholding asset quality
•
Constant monitoring of the market to ensure pricing and
terms remain competitive
•
A well-structured investment authorisation procedure
•
Considerate management of customer relationships
•
Highly developed marketing and management systems in
place to generate new customer enquiries and maximise
conversion and maintain and build occupancy
•
Active assets life cycle planning, asset management,
refurbishment programs and maintenance activity
•
Methodical valuation process
•
Prudent capital management
•
Continual market analysis and monitoring
•
Active risk management
•
Transparency and communication with securityholders and
stakeholders
•
Sustainable practices and initiatives
•
Comprehensive insurance coverage
Environmental and Climate Change
Unforeseen Environmental and
Climate Change risks as well as risk
arising from legislative changes may
impact NSR’s strategic and
operational business and where
possible are required to be mitigated.
There is opportunity for NSR to
consider and where appropriate
implement ESG initiatives to respond
to securityholder expectation in the
market whilst delivering operational
efficiencies to the business.
•
Announcing and implementing a strategy to reduce and
offset scope one and scope two emissions by 30 June 2030
Re-assessment of sustainability materiality matrix, at least
annually
•
Dedicated ESG Committee implementing environmental and
climate related risk mitigation strategies,
•
Regular review process for centres to ensure such impacts or
their likelihood is mitigated where possible
•
Comprehensive Disaster Recovery and Business Continuity
Plan and procedures
•
Active engagement with stakeholders on ESG matters,
•
Climate related-risks and potential financial impacts assessed
within NSR’s enterprise-wide Risk Management Framework
•
Alignment with the Task Force on Climate-related Financial
Disclosures' recommendations
•
Commitment to combat modern slavery
•
Monitoring changing regulatory environment
Economic and market conditions
Changing rates of economic growth
and market activity can impact
Group performance, as can
changing consumer practices and
trends, including the housing market,
population and migration growth,
unemployment, wage growth, the
rate of inflation, and consumer
sentiment.
•
Maintaining a nimble and proactive business approach
•
Disciplined cost management
•
Proactive monitoring of the economy and industry
•
Ongoing economic and business research
•
Standing strategic consideration in all investment decisions
Capital Management
•
Maintaining an appropriate capital structure commensurate
with an investment grade balance sheet, ensuring the
Key Risks and Opportunities
How NSR is responding
Maintaining a strong and appropriate
capital structure underpins NSR’s
ability to deliver on its strategy and
meet its objectives. The importance of
appropriate and effective capital
management is critical to mitigate
against risks resulting from changing
economic and funding environments.
structure meets the business needs and can withstand
changing economic or financial conditions
•
Managing liquidity and maintaining a debt structure which is
appropriately diversified by counterparty, tenor, funding
sources, and debt instrument
•
Strategic joint venture partnerships to assist in delivery
pipeline and capital management
•
Managing gearing and monitoring financial covenants
•
Proactive monitoring and approach to interest rate risk
management, including hedging
•
Appropriate limits on foreign currency exposure
•
Active management and limits of counterparty credit risk
exposures related to borrowing/funding, derivatives/hedges,
and surplus cash investments
•
Strong compliance program
Acquisitions and Developments
Prevailing micro and macro-
economic environments may impact
NSR’s decisions with respect to
Acquisitions and Developments.
These factors and risks relating to
each transaction are considered at
the time to ensure the expansion of
our portfolio and our development
pipeline continues to provide NSR with
assets that expand our asset and
storage offerings in line with our
Strategic direction.
•
A disciplined and comprehensive due diligence, feasibility,
sensitivity analysis and legal review and approval process
•
Strategic offer, tender, procurement, and consultant
engagement process undertaken
•
Experienced management and sufficiently resourced and
skilled internal team
•
Dedicated acquisition and development teams
•
Thorough systems and processes with regular reviews,
optimisation, and interdepartmental accountability
•
Implementation of a clearly articulated development risk
tolerance framework
Technology, Cyber and Data Security
Data loss, breach or damage, cyber-
attacks, business interruptions and
reputational risk are risks faced by all
businesses in the current environment
including NSR.
•
Appropriately skilled and experienced Board, Audit and Risk
Committee, and Cyber Security Steering Committee with
oversight of cyber and data security strategy
•
Comprehensive Cyber Security Program, including cyber
security risk management and treatments
•
External Chief Information Security Officer (CISO)
•
Regular review and development of policies, guidelines, and
procedures addressing new and emerging cyber risks
•
Disaster Recovery and Business Continuity Plan
•
Monitoring, penetration testing, phishing exercises, additional
security testing and staff education program
•
Regular updates to technology hardware and software
•
Risk assessments and ongoing alignment with ISO 27001
•
Internal and external audits
Health, Safety and Wellbeing
Our alignment with health and safety
standards and regulations safeguards
our employees, our customers and
our contractors from potential health
and safety risks, in accordance with
our safety vision of ‘no harm to
anyone at any time’
•
Comprehensive health and safety management systems.
•
Active monitoring of health and safety best practices and
developing regulations
•
Induction training and ongoing scheduled training of our
employees
•
Continual re-assessment and annual testing of our Disaster
Recovery and Business Continuity Plan
•
Stable, committed, skilled and experienced Executive
Management Team, with ongoing succession and strategic
workforce planning
•
Dedicated People and Culture team conducting
benchmarking to ensure competitive remuneration,
supported by external advisors when required
•
Diversity and inclusion targets
•
Evolving wellness offerings
•
Annual employee engagement survey and team check ins
•
Ongoing monitoring of risk culture and conduct
•
Annual reporting to the Workplace Gender Equality Agency
Annual Report 2024
39
Key Risks and Opportunities
How NSR is responding
Compliance and regulatory
NSR maintains best practice
governance and compliance
practices to mitigate risks of non-
compliance whilst managing
strategic and business continuity in
the event of compliance or regulatory
change.
•
Experienced Executive Management Team, supported by
internal expertise
•
Active management of comprehensive Compliance Plan, in
accordance with the requirements of the Corporations Act
2001 (Cth)
•
Continuous monitoring of developments in regulatory
environment
•
Internal committees to monitor key compliance risks
•
Scheduled annual review and enforcement of all
compliance policies
•
Regular compliance reporting, internal audits and annual
external compliance audit program
•
Ongoing training and continuous professional development
DIRECTORS
NATIONAL STORAGE HOLDINGS LIMITED
The NSH Directors in office during the Reporting Period and at the date of this Directors’ Report:
NAME
APPOINTED
POSITION
Anthony Keane
1 November 2013
Non-Executive Chairman
Andrew Catsoulis
1 November 2013
Managing Director
Howard Brenchley
21 November 2014
Non-Executive Director
Scott Smith
1 July 2022
Non-Executive Director
Inmaculada Beaumont
1 July 2022
Non-Executive Director
Claire Fidler
18 July 2017
Executive Director (Retired 27 March 2024)
NATIONAL STORAGE FINANCIAL SERVICES LIMITED (NSFL)
The Directors of NSFL in office during the Reporting Period and at the date of this Directors’ Report:
NAME
APPOINTED
POSITION
Anthony Keane
18 July 2014
Non-Executive Chairman
Andrew Catsoulis
18 July 2014
Managing Director
Howard Brenchley
8 September 2015
Non-Executive Director
Scott Smith
1 July 2022
Non-Executive Director
Inmaculada Beaumont
1 July 2022
Non-Executive Director
Claire Fidler
18 July 2017
Executive Director (Retired 27 March 2024)
DIRECTORS’ QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES
Boards of National Storage Holdings Limited and National Storage Financial Services Limited
Anthony Keane, Independent Non-Executive Chairman
BSc (Maths), Grad Dip Corp Fin, GAICD
Anthony is an experienced finance and business executive with an extensive background in banking and
business management. Prior to accepting his directorship with National Storage, Anthony held numerous
leadership roles with a major trading bank principally in business, corporate and institutional banking. He is
actively involved in the business community through Non-Executive Director and Advisory Board roles, and
finance advisory consultancies.
Anthony is a Director of ASX listed EMvision Medical Devices Ltd (EMV). Anthony has a Bachelor of Science
(Mathematics) from University of Adelaide and a Graduate Diploma in Corporate Finance from Swinburne. He
is a Fellow of the Financial Services Institute of Australasia, a Graduate of the Australian Institute of Company
Directors, and a Fellow of the CEO Institute.
Anthony is Chair of the Nomination Committee and is a member of the Audit and Risk Committee and
Remuneration Committee.
Andrew Catsoulis, Managing Director
BA, LLB, Grad Dip Proj Mgmt (Hons)
A founder of the National Storage business, Andrew has over 25 years’ of specific self-storage industry
expertise including in the areas of acquisitions, developments, integration and operation of ‘greenfield’ and
developed self-storage centres.
Andrew is a qualified solicitor who has been admitted to the Supreme Court of Queensland. He has had
extensive experience in the fields of finance, commercial and property law during his tenure at major law firms
both in Australia and overseas. He is also a qualified project manager and has considerable property
development experience both within the storage industry and in broader markets.
Andrew was instrumental in the successful acquisition and integration of the original pre-existing Group
portfolio and led the Company through the IPO and planned and negotiated the acquisition of the Southern
Cross portfolio in 2016. He has led the company in its growth from a single centre in 1996 to over 200 centres
today and has been primarily responsible for charting its strategy over that period.
Howard Brenchley, Independent Non-Executive Director
BEc
Howard has over 35 years’ involvement in the Australian property industry, as an analyst, investor and fund
manager. Howard cofounded Property Investment Research Pty Ltd (PIR) in 1989, which during the 1990s was
considered a leading researcher of both listed and unlisted property funds. In 1998 Howard was instrumental in
establishing the funds management business of APN Property Group Limited. During this period, he was
responsible for the establishment and operations of a number of funds investing both directly and indirectly in
real estate.
Since 1998, Howard has been a director (or the director of the responsible entity) of numerous listed and
unlisted real estate investment vehicles.
Howard is Chair of the Audit and Risk Committee and is a member of the Nomination and Remuneration
Committees.
Inmaculada (Inma) Beaumont, Independent Non-Executive Director
BA (Mathematics), BA Hons (Economics and Commerce), FCCA, GAICD
Inma brings her financial expertise and diverse range of commercial experience to the NSR board. As a senior
finance executive, she has had leadership roles spanning Financial Control, Internal Audit and Risk
Management within top multinationals in Energy, FMCG and Banking. In addition, she has governance
experience as Chair of Finance, Audit and Risk Committees across several boards.
Inma is currently a non-executive director of Children's Health Queensland Hospital and Health Service, UN
Women Australia and Guide Dogs Queensland. She holds a BA Hons (Economics and Commerce) from the
University of Valencia, Spain, is a Fellow of the Association of Chartered Certified Accountants, and is a
Graduate of the Australian Institute of Company Directors.
Inma is a member of the Audit and Risk, Nomination, and Remuneration Committees.
Scott Smith, Independent Non-Executive Director
BBus (Marketing)
Scott has over 25 years’ experience in the Technology and Telecommunications sector across the Asia Pacific
region, including a breadth of experience gained from working for large global telecommunication
organisations before founding his own successful managed service provider company. Scott holds a Bachelor
of Business (Marketing) from the Queensland University of Technology and has extensive experience in
technology and leadership positions. Having successfully co-founded Comlinx (Managed Service Provider) in
2006, he went on to sell that business to ASX listed Telecommunications provider Over the Wire (ASX: OTW) in
2018 and continued in the senior leadership team, taking over the role of CEO of OTW in February 2020. OTW
has subsequently been sold to Aussie Broadband (ASX: ABB).
Scott is currently serving on the Advisory Board and as an investor at Rockfish Data Inc. a San Francisco-based
software company focused on developing synthetic data for AI and machine learning applications.
Additionally, he is a member of the Advisory Board at HEAL Software Inc. a company specializing in AI-driven IT
operations (AiOps).
Scott is Chair of the Remuneration Committee and is a member of the Audit and Risk Committee and
Nomination Committee.
Annual Report 2024
41
Katherine Hammond, Company Secretary
LLB(Hons), BA, GradDipLegPrac, FGIA & FCG
Katherine was appointed Company Secretary on 27 March 2024 on a part-time interim basis and will join
National Storage in a full-time permanent capacity from October 2024.
Katherine holds a Bachelor of Laws (Hons) and Bachelor of Arts (majoring in Economics and French) from the
University of Queensland and is admitted as a solicitor of the Supreme Court of Queensland. Katherine is a
qualified (Chartered) Company Secretary, holding a Graduate Diploma of Applied Corporate Governance
from the Governance Institute of Australia.
Katherine has 15 years’ of legal and company secretarial experience advising numerous ASX-listed
companies, and specialising in mergers & acquisitions, equity capital markets, corporate advisory,
governance and risk management. Katherine has previously served as company secretary and in-house legal
counsel for dual listed Michel Hill Jeweller, in addition to having over a decade of private practice experience
with major law firms in Australia. She joins National Storage from her position as a Partner of national
commercial law firm, Holding Redlich Lawyers.
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other listed companies held by current Directors in the three years immediately before the end
of the financial year are as follows:
NAME
COMPANY
PERIOD OF DIRECTORSHIP
Howard Brenchley
APN Property Group (ASX:APD)
1998 – 13/08/2021
Dexus Asset Management Limited previously
known as APN Funds Management Limited,
responsible entity for:
Dexus Industria REIT (ASX:DXI) previously
known as APN Industria REIT (ASX:ADI)
Dexus Convenience Retail REIT (ASX:DXC)
previously known as APN Convenience
Retail REIT (ASX:AQR)
03/12/2013 - 17/10/2022
27/12/2017 - 17/10/2022
Anthony Keane
EMvision Medical Devices Ltd (ASX:EMV)
11/12/2018 – Current
DIRECTORS’ INTERESTS IN NSR SECURITIES
As at the date of this Directors’ Report, the interests of the Directors (including indirect interests) in the stapled
securities of NSR were:
DIRECTOR
DIRECT
INDIRECT
PERFORMANCE
RIGHTS
TOTAL
Anthony Keane
11,595
242,870
-
254,465
Andrew Catsoulis
-
15,782,872
773,900
16,556,772
Howard Brenchley
-
135,200
-
135,200
Scott Smith
-
154,958
-
154,958
Inmaculada Beaumont
37,449
-
-
37,449
No options over issued stapled securities or interests in a Controlled Entity have been granted in NSR during the
Reporting Period. There are no options in stapled securities outstanding as at the date of this report.
DIRECTORS’ MEETINGS
The number of meetings of directors of NSH and NSFSL (including meetings of sub-committees of directors)
held during the Reporting Period and the number of meetings attended by each director were as follows:
DIRECTOR
NSH
BOARD
NSFSL
BOARD
AUDIT & RSIK
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
Anthony Keane
12 (12)
10 (10)
10 (10)
6 (6)
4 (4)
Andrew Catsoulis
12 (12)
10 (10)
10 (10)
5 (6)
4 (4)
Howard Brenchley
12 (12)
10 (10)
10 (10)
6 (6)
4 (4)
Inma Beaumont
12 (12)
10 (10)
10 (10)
6 (6)
4 (4)
Scott Smith
12 (12)
10 (10)
10 (10)
6 (6)
4 (4)
Claire Fidler
6 (8)
5 (6)
7 (8)
3 (4)
2 (3)
Notes:
1.
Figures in brackets indicate the number of meetings held whilst the director was in office or was a
member of the relevant Committee during the Reporting Period. Figures not in brackets indicate the
number of meetings or Committee meetings that the director attended.
2.
Mr. Catsoulis attends Nomination, Remuneration, Risk and Audit, and Risk Committee meetings by
invitation. One Remuneration Committee meeting was held without executive members present and
Mr Catsoulis did not attend.
3.
Ms Fidler resigned as a Director on 27 March 2024.
4.
The Company has an Investment Committee Charter to govern an Investment Committee. The Board
has determined that at this time, the full Board will act as the Investment Committee and therefore
there are no separate Investment Committee meetings noted.
COMPANY SECRETARY
NATIONAL STORAGE HOLDINGS LIMITED
NAME
APPOINTMENT DATE
RESIGNATION DATE
Claire Fidler
26 November 2015
20 May 2024
Katherine Hammond
27 March 2024
NATIONAL STORAGE FINANCIAL SERVICES LIMITED
NAME
APPOINTMENT DATE
RESIGNATION DATE
Claire Fidler
26 November 2015
20 May 2024
Katherine Hammond
27 March 2024
Katherine Hammond
LLB(Hons), BA, GradDipLegPrac, FGIA & FCG Refer to page 27
CORPORATE GOVERNANCE
NSH and the Responsible Entity have their own respective Boards and constitutions. The relationship between
NSH and the Responsible Entity is governed by a Cooperation Deed and Management Agreement that allows
NSH to provide key services to NSFL as Responsible Entity in exchange for a monthly fee. These services include
finance and administrative services, property management, provision of staff and equipment.
The NSH and Responsible Entity Boards and NSH management are committed to achieving and
demonstrating to securityholders high standards of corporate governance and to ensuring NSH acts in the
best interests of its securityholders, balanced with its broader community obligations.
Information on NSR’s corporate governance policies and practices, including the Corporate Governance
Statement disclosing the extent of NSR’s compliance with the ASX Corporate Governance Principles and
Recommendations (Fourth Edition) (the “ASX Recommendations”) can be viewed on the NSR website at
www.nationalstorageinvest.com.au/governance.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has agreed to indemnify all the Directors, Company Secretary and Chief Financial Officer and
Chief Investment Officer (“Indemnified Persons”) of the Company and its group entities to the extent permitted
by law, for the amount of any liability, loss, cost, charge, damage, expense or other liability suffered by the
Indemnified Person as an officer of the Company or group entity or as a result of having been an officer of the
Company or any Group entity. This includes any liability arising out of or in connection with any negligence,
breach of duty, or breach of trust (“Indemnity”).
However, the Indemnity does not extend to a claim in the nature of:
(a)
a challenge to any rejection of an Indemnified Person’s claim by the provider of the Company’s
insurance cover; or
(b)
a cross-claim or a third-party claim for contribution or indemnity in, and results directly from, any
Proceedings in respect of which the Indemnified Person has made a claim under the Indemnity.
Deeds of indemnity to give effect to the above have been formally entered into by the Company and each
of the Indemnified Persons.
The Responsible Entity (as trustee of NSPT) has provided the Company with an indemnity out of the assets of
the NSPT for any liability under the Directors/Officers indemnity to the extent that the Company is not able to
Annual Report 2024
43
meet that obligation. The back-to-back indemnity does not extend to any payment made or due as a result
of a breach by the Company of its obligations under a Director/Officer indemnity or to any payment which
the Company makes voluntarily but is not due and payable under the terms of a Director/Officer indemnity.
The total amount of insurance contract premiums paid for Directors and Officers insurance for NSR (including
subsidiary entities) during the Reporting Period was $1,686,153.
No insurance premiums are paid out of the assets of the NSPT for insurance cover provided to either the
Responsible Entity or the auditors of the NSPT. So long as the officers of the Responsible Entity act in
accordance with the constitution and the law, the officers remain indemnified out of the assets of the NSPT
against losses incurred while acting on behalf of the NSPT. The auditors of the NSPT are in no way indemnified
out of the assets of the NSPT.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made or claim received by NSR to indemnify Ernst & Young
during the Reporting Period or up to the date of this report.
REMUNERATION REPORT (AUDITED) – NSH GROUP
MESSAGE FROM THE BOARD
The NSH Board is committed to ensuring that its executive remuneration arrangements are structured to
support and reinforce NSR’s overall business strategy, are consistent with the requirements of good
governance standards, and meet the reasonable expectations of investors and other stakeholders. By linking
the Short-Term Incentive (“STI”) and Long-Term Incentive arrangements (“LTI”) (both “at risk” remuneration) of
executive remuneration to the drivers that support NSR’s business strategy - including financial, governance,
sustainability, cultural and community measures, the remuneration of NSR’s executives is aligned with the
creation of long-term value for securityholders. The Board believes that the remuneration practices of NSR
should fairly and responsibly reward Key Management Personnel (“KMP”) and the broader executive team
consistently with their individual performance, the performance of NSR, and the broader external environment
as it relates to executive remuneration and incentive arrangements.
For the FY25 year and onwards several changes have been made to the STI and LTI plans, taking on advice
and feedback from investors and advisors as well as in light of the broader market conditions for comparable
roles and responsibilities to those undertaken by NSR’s executive team. These changes are outlined below.
KEY PERFORMANCE INDICATORS
NSR’s performance over the last five years against key financial indicators is illustrated below.
Group
FY20
FY21
FY22
FY23
FY24
Total Revenue
$'m
177.9
217.7
278.9
330.0
355.4
IFRS profit after tax
$'m
121.8
309.7
620.6
320.4
230.3
Earnings per stapled security
cps
14.59
30.21
51.71
25.75
16.90
Underlying earnings(1)
$'m
67.7
86.5
126.5
141.8
154.2
Underlying earnings per stapled
security(1)
cps
8.3
8.5
10.6
11.5
11.3
Net operating cashflow
$'m
89.5
135.2
165.8
188.3
184.4
Distribution per security
cps
8.1
8.2
10
11.0
11.0
Total Assets
$'b
2.64
3.25
4.05
4.58
5.17
Debt drawn
$'m
681
761
975
947
1,399
Gearing
%
25
22
23
19.8
26.6
Weighted average debt tenor
years
2.8
2.8
3.3
3.5
3.3
Net Tangible Assets (NTA)
$
1.65
1.89
2.34
2.48
2.52
1 Underlying earnings is a non-IFRS measure
FY24 PERFORMANCE AND REMUNERATION OUTCOMES
The FY24 year was another year of record performance for NSR with underlying earnings increasing by 9% to
$154.2 million. Despite the ongoing challenging economic and market conditions, NSR delivered underlying
earnings of 11.3cps, in line with its stated guidance. FY24 EPS was impacted by the $340 million capital raise
undertaken in March 2023 which was undertaken to fund NSR’s ongoing acquisition and development
pipeline. Total distributions declared for the year was 11.0cps, consistent with the previous year, with a payout
ratio of 97%, a high level of distribution payout to shareholders compared to the ASX 200 A-REIT index. NSR’s
Total Shareholder Return (TSR) also significantly outperformed the ASX 200 A-REIT index over the 3 years to 30
June 2024, with NSR being ranked number five out of 29 companies, delivering 32% TSR over this period. NSR’s
long term success from both a yield and TSR perspective is closely linked to the high levels of commitment and
overall performance displayed by its executive team.
REMUNERATION REVIEW AND FY25 CHANGES
The remuneration policy also aims to provide a platform for sustainable value creation for securityholders by
attracting, motivating, and retaining its high quality team of executives.
NSR’s remuneration framework has evolved over time and in response to stakeholder feedback and broader
market conditions, and uses the following key objectives as the basis for the executive remuneration:
•
Increase the ‘at-risk’ component of total remuneration across the executive team;
•
Provide an increased alignment between the executive team and securityholders’ interests by utilising
equity-based structures (particularly in respect of LTI) as part of total remuneration arrangements;
•
Structure remuneration in such a way as to enhance executive team retention, given the small team
of key executives, the specialised nature of the business and the increasingly competitive landscape
for high quality executives;
•
Provide greater transparency on the short-term and long-term performance measures to align with
securityholder expectations; and
Annual Report 2024
45
•
Increase NSR’s alignment with the A-REIT direct comparator group
In light of the above factors, and particularly in response to investor and advisor feedback, the Board has
made several changes to the incentives plans that will apply going forward. These changes are:
•
The inclusion of an Environmental component in STI weighted at 10% of the total STI to align executive
remuneration with the delivery of NSR energy efficiency projects;
•
Removal of the “cliff” vesting in the EPS component of the LTI, replacing this with a graduated vesting
scale more aligned with ASX market practice; and
•
The introduction of a distribution equivalent payment on vested Rights in the LTI plan, to compensate
executives for distributions foregone during the performance period.
During the reporting period, the Board engaged external remuneration consultants to conduct benchmarking
on executive remuneration. This benchmarking indicated that the MD’s TFR was below the median of the ASX
peer group. With reference to this benchmarking exercise, increases to fixed remuneration and “at-risk”
remuneration were made for the MD and CFO in recognition of their tenure, continued performance,
expansion of roles and duties as well as the significant growth in NSR’s market capitalisation. The CFO has also
taken on the role of Chief Investment Officer (CIO) during FY24 and the increase in the CFO’s FY25
remuneration is also reflective of these additional duties and responsibilities. Commencing 1 July 2024, fixed
remuneration will increase by 7.5% for the MD and the CFO / CIO by 12.7%. Post this increase the MD’s total
fixed remuneration will sit slightly above the median for the ASX peer group.
Additionally, some minor increases in “at-risk” rewards were made to the executives’ total remuneration
packages to create better alignment with the broader market and comparator peers. The MD’s STI
opportunity was increased to 105% (previously 100% of fixed remuneration) whilst the MD’s LTI has remained
unchanged at 105% of fixed remuneration. The CFO’s STI opportunity remained unchanged at 80% of fixed
remuneration whilst the LTI was increased to 80% (previously 70% of fixed remuneration).
COVERAGE OF THIS REPORT
The following remuneration report has been prepared to provide information to NSR securityholders of the
remuneration details of the KMP of NSH involved in the management of NSH and the NSPT.
Directors of the Responsible Entity do not receive any remuneration from the Responsible Entity in respect to
their roles with the Responsible Entity. However, the director fees paid by NSR take into account the complexity
involved, and additional duties required to be undertaken, in relation to the operation of the Responsible
Entity as a subsidiary of NSH and as part of the consolidated governance group. The Responsible Entity
receives a fee for management services rendered.
This information has been audited as required by section 308(3C) of the Act.
KMP are defined as “those persons having authority and responsibility for planning, directing and controlling
the major activities of NSH, the Consolidated Group and the NSPT, directly or indirectly, including any director
(whether executive or otherwise) of NSH.”
Key management personnel covered in this report are as follows:
NON-EXECUTIVE AND EXECUTIVE DIRECTORS
Anthony Keane
Independent Non-Executive Chairman
Andrew Catsoulis
Executive Managing Director (“MD”)
Howard Brenchley
Independent Non-Executive Director
Inmaculada Beaumont
Independent Non-Executive Director
Scott Smith
Independent Non-Executive Director)
Claire Fidler
Executive Director and Head of Legal & Governance (Retired 20 May 2024)
KEY MANAGEMENT PERSONNEL – SENIOR EXECUTIVES
Stuart Owen
Chief Financial Officer & Chief Investment Officer (“CFO”)
REMUNERATION OVERVIEW
REMUNERATION PRINCIPLES
REMUNERATION STRUCTURE (FY25)
Fixed reward
At-risk reward
TFR
STI
LTI
Delivery
Cash
Cash
(70%)
Scrip
(30%)
Performance rights
(70%)
Cash
(30%)
Details
• Comprised of
base salary and
superannuation
• Paid in a combination of cash
and scrip
• Scrip component
o
Scrip price set as the 30-
day VWAP to 30 June
2024
o
escrowed for 12 months
• Measures:
o
Financial measures (EPS) –
70%
o
Individual and strategic
measures – 30%
•
LTI is subject to a 3-year performance
period
•
Measures:
o
Relative Total Shareholder Return
(rTSR)(ASX 200 A-REIT index
comparator group) – 70%
o
Underlying Earnings per share (EPS) –
30%
Link to
remuneration
principles
Assists attraction
and retention
through
competitive
remuneration
Incentivises group and individual
performance through at-risk
pay against financial and non-
financial targets
Aligns executive remuneration with long-term
securityholder value
PAY MIX
The composition of total annual remuneration (TAR) for the year ending 30 June 2024 for KMP is detailed in the
table below.
KMP
TFR
STI
LTI
STI as %
of TFR
LTI as %
of TFR
Andrew Catsoulis (MD)
32.8%
32.8%
34.4%
100%
105%
Stuart Owen (CFO)
40.0%
32.0%
28.0%
80%
70%
The structure has been adjusted slightly as a result of the remuneration review, with an increased emphasis on
“at-risk” remuneration. The table below reflects the new structure and is consistent with NSR’s policy objectives
for executive TAR for the year commencing 1 July 2024 as outline above.
KMP
TFR
STI
LTI
STI as %
of TFR
LTI as %
of TFR
Andrew Catsoulis (MD)
32.2%
33.9%
33.9%
105%
105%
Stuart Owen (CFO)
38.4%
30.8%
30.8%
80%
80%
NSR PERFORMANCE
NSR has a long and established track record of consistent growth in all of the following key measures -
underlying earnings, net tangible assets (NTA) and value of its Investment Properties. Underlying earnings per
stapled security (“EPS”) for the 12 months to 30 June 2024 was in line with guidance at 11.3cps, with underlying
earnings increasing 9% to $154.2m. Group REVPAM increased 3.1% to $275m2, consolidating previous years’
Securityholder
alignment
Total reward for key
executives is to have a
significant “at risk”
component, including
both short term incentives
(“STI”) and long-term
incentives (“LTI”) which
have a strong focus on
quantitative and non-
quantitative measures.
Provide industry
competitive
rewards linked to
security holder
returns and aligned
with NSR’s
performance in
comparison to it’s
a-REIT comparator
group.
Remuneration
policies and
structures must
be clear and
transparent both to
the executives and
Board of NSR and
to securityholders.
Attract and retain
high quality
executives and to
reward the
capabilities and
experience brought
to NSR by those
executives.
Attraction
and retention
At-risk
Transparency
Annual Report 2024
47
increases, and establishing an opening FY25 REVPAM that provides an exceptional base from which to deliver
FY25 revenue growth. Rate per square metre achieved across the Group increased by 7.1% to $339m2 with 30
June 2024 Group occupancy of 81.9%. This reflects NSR’s careful balancing of rate and occupancy in order to
achieve optimal revenue growth in the challenging market and trading conditions experienced across FY24.
Occupancy across the 14 Let-up centres, being those centres that have been recently developed or
expanded and were operating at the commencement of the period, increased by 10% to 59.1%, with total
occupancy across the portfolio now sitting at 76.7%. This has been impacted by the significant number of new
developments (11) coming on line during FY24 which have added 73,500m2 of new NLA. These new
developments will be an important contributor to NSR’s future growth in FY25 and beyond.
NTA has increased by 2% during the year to $2.52 per stapled security, with the weighted average
capitalisation rate remaining unchanged at 5.91% at 30 June 2024. The uplift in valuation, and resulting NTA, of
NSR’s Investment Properties has been derived from improved operational performance of the assets at an
individual centre level. Capitalisation rates, supported by independent third party valuations, are holding at
similar levels to 30 June 2023 despite the uncertainty in interest rate markets and the increased bond yields,
reflecting the high quality of NSR’s self-storage portfolio in particular as well as the strong position that self-
storage assets in general have within the real estate markets globally.
The value of Investment Properties has increased by $594 million or 14% to $4.9 billion over the 12 months to 30
June 2024, with total assets now exceeding $5.0 billion. These results have been achieved through the
disciplined management of NSR’s operations and the ongoing success of its “Four Pillar” growth strategy.
NSR’s focus on making highly accretive acquisitions, combined with its deeply analytical and process driven
development program has produced consistent results, in assisting NSR to drive strong underlying earnings
growth from both its existing assets and new acquisitions and developments. The consistent and considered
approach to driving underlying earnings through a combination of organic growth from existing assets as well
as acquisitions, developments and expansion activity, overlayed by a focus on technology and innovation,
along with a focus on sustainable business practices has been instrumental in achieving this exceptional result.
8.30
8.50
10.60
11.50
11.30
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
FY20
FY21
FY22
FY23
FY24
cps
Underlying EPS
$19.5
$24.3
$29.1
$45.7
$51.4
$62.4
$67.7
$86.5
$126.5
$141.8
$154.2
$0
$25
$50
$75
$100
$125
$150
$175
CY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
$'m
Underlying Earnings
NSR has executed on its successful growth strategy with a total of 29 acquisitions in FY24, including the
acquisition of 12 freehold operating storage centres, the freehold of 5 previously leasehold storage centres 10
development sites, and 2 commercial sites totalling $250 million. These acquisitions have been funded through
the use of NSR’s strong balance sheet and additional debt facilities which were successfully expanded and
refinanced during the Reporting Period. The successful execution of NSR’s development, expansion and
redevelopment strategy has seen it secure 49 projects in various stages of design and construction. In
addition, NSR has successfully completed 11 new developments and expansion projects during the Reporting
Period adding over 73,000m2 of NLA.
The highly successful $340 million capital raising undertaken in FY23 enabled NSR to utilise its strong balance
sheet in combination with its expanded and refinanced debt facilities to fund its ongoing acquisitions and
development pipeline. This program has been undertaken whilst maintaining a strong balance sheet with
gearing ratio at 30 June 2024 at a conservative at 26.6%. This provides significant balance sheet capacity to
fund NSR’s further growth into FY25 and beyond. NSR has a historically low level of gearing, which it believes to
be a significant advantage and an important consideration in these uncertain times.
On 13 June 2024 NSR entered into binding agreements with GIC (GIC) to establish the new National Storage
Ventures Fund (Ventures JV) that will pursue the development and operation of self-storage centres across
Australia. The Ventures JV will acquire and develop an initial portfolio of 10 foundation assets sourced from
NSR’s existing development portfolio. NSR and GIC will hold approximately 25% and 75% equity interests
respectively in the Ventures JV and will deploy approximately $270 million of total capital over the initial 12 – 18
month period. Financial close of the Ventures JV remains subject to satisfaction of certain, customary,
conditions precedent and is expected to complete prior to 30 September 2024. NSR will be the manager of all
operational and development activities of the Venture JV and receive fees for undertaking various activities
on behalf of the Ventures JV. Post settlement NSR’s pro-forma 30 June 2024 gearing would reduce from 26.6%
to 24.9% with this capital recycling will allow NSR to pursue further redeployment opportunities as a result.
NSR has maintained a distribution policy that targets distribution of 90% - 100% of underlying earnings to
securityholders. During the Reporting Period, NSR declared distributions totalling 11.0 cents per stapled security
consistent with that paid in FY23, representing a payout ratio of 97%.
NSR was ranked in the top quartile (5 out of 23) for Total Shareholder Return “TSR” (a combination of share
price growth and distributions received by securityholders) over the past three years to 30 June 2024,
delivering TSR of 31.6%, significantly outperforming the ASX 200 A-REIT TSR of 19.5%. Generally, the self-storage
sector has demonstrated its highly resilient nature as a business during times of uncertainty and fluctuating
economic conditions.
A combination of factors - including a broad customer base, geographic diversity and short term-tenancy
arrangements providing customers with a high degree of flexibility, plus an increasingly diverse user universe
and high demand from a variety of sources - has underpinned the successful growth of the storage industry.
Annual Report 2024
49
Source: Bloomberg
Note 1: Assumes Dividends are re-invested in underlying security
Note 2: Excludes securities not listed for the entire year
NSR’s share price closed on 28 June 2024 at $2.30, a slight decrease from $2.35 at 30 June 2023 with the
market capitalisation of NSR now exceeding $3.15 billion as at 30 June 2024. Given the difficult trading
conditions and the impacts of macro drivers such as interest rates and geopolitical uncertainty, it is considered
a positive result.
Security price performance over the period 1 July 2021 to 30 June 2024 has shown a 15% increase. This
compares favourably to an increase of 5.2% for the ASX 200 A-REIT index and 6.9% for the broader ASX 200
Index over the same period.
0%
5%
10%
15%
20%
25%
30%
35%
NSR
A-REIT
200
Total Shareholder Return - 3 Years to 30 June 2024
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1.10
1.30
1.50
1.70
1. 0
2.10
2.30
2.50
2.70
2. 0
Jul 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Mar 24
Jun 24
$ m
$
NSR Stapled Security Price
Mkt Cap
Share Price
0.60
0.80
1.00
1.20
1.40
Jul 21
Sep 21 Dec 21 Mar 22
Jun 22
Sep 22 Dec 22 Mar 23
Jun 23
Sep 23 Dec 23 Mar 24
Jun 24
Relative Performance
NSR
S&P/ASX 200 A-REIT
S&P/ASX 200
The KMP were eligible for payment of STI’s and LTI’s for the financial year ended 30 June 2024 in accordance
with the incentive program outlined in the 2023 Annual Report. The assessment criteria for the program and
performance against those criteria are outlined below. Incentives achieved for the year ended 30 June 2024
will be paid through a combination of cash and scrip.
The STI and LTI hurdles are set out below.
The Board has assessed the performance of the Company and the KMP against the performance criteria and
has determined that the following STI and LTI’s have been earned and are payable, inclusive of statutory
Superannuation amounts, for the period 1 July 2023 to 30 June 2024.
STI
LTI
KMP
AMOUNT
%
EARNED
AMOUNT
%
EARNED
TOTAL
Andrew Catsoulis (MD)
$1,285,250
97.0%
$1,050,000
100.0%
$2,335,250
Stuart Owen (CFO)
$568,000
100.0%
$400,000
100.0%
$968,000
Total
$1,853,250
97.9%
$1,450,000
100.0%
$3,303,250
The Board regularly assesses both short-term and long-term incentives against a strict set of criteria and
believes that delivering superior results to securityholders supports the above incentive payments.
Assessment of FY24 Outcomes
The assessment of the FY24 STI outcomes was considered against a predetermined set of assessment criteria.
The criteria utilised for assessing the MD’s FY24 STI were:
Element
Weighting
Metrics
Rationale
Achievement in FY24
Financial
70%
Underlying
Earnings of
11.3cps (10%
out
performance if
Underlying EPS
>11.4cps -
$12.0cps)
Underlying EPS ensures
alignment to the
Consolidated Group’s
financial performance
and securityholders’
experience
Achievement: 100%
Underlying EPS of 11.3cps was
achieved over the 12-month
performance period, in line with
stated guidance.
Strategic
15%
Implementation
of major
projects
Delivering priorities
consistent with the long-
term strategies of the
Consolidated Group
under the “Four Pillars”
strategy. The “Four Pillar”
strategy aims to deliver
securityholders a stable
and growing income
stream from a portfolio
of geographically
diversified high-quality
self-storage assets
Achievement: 100%
The Board considered the
application of the stated strategy
in the assessment:
1.
Organic Growth
•
Delivered same centre
REVPAM growth of 3.1%
•
Centre efficiency
program has reduced
average centre staffing
levels
2.
Acquisitions
•
10 new storage centres,
the freehold of four
previously leasehold
storage centre
•
12 development sites
•
totalling $240 million
3.
Developments
•
Completed 11
developments adding
over 73,000m2 of NLA
•
Added 12 sites to the
development and
expansion pipeline
4.
Technology and Innovation
•
Cyber security and PCI
compliance program
•
Digital wayfinding
technology for
Risk
management
Innovation &
enhancement
of processes
and procedures
FY24 REMUNERATION OUTCOMES
Short-term and long-term incentives in place during reporting period:
Annual Report 2024
51
Element
Weighting
Metrics
Rationale
Achievement in FY24
customers to navigate
to their unit
•
Centralised arrears
management
technology developed
and implemented
•
Comprehensive roll-out
of digital phone system
Individual
15%
Undertaking all
necessary
investor relations
activities
expected of an
ASX:200 listed
entity
Individual KPIs are
designed to foster and
drive high-performance
amongst the key
executive team
members. The KPIs are
intended to cover duties
and responsibilities
relevant to individual
executives across
several key operational
areas including but not
limited to staff
continuity/development,
risk management and
ESG
Achievement: 80%
The Board considered the
following in assessing individual
KPIs for FY24:
•
No significant adverse
feedback from investors
on the quality of investor
briefings or presentations
or other major concerns.
•
All management reports
delivered in accordance
with agreed timeframe
and of the quality
expected for an ASX200
entity
•
No material errors in
management reporting.
•
All key executive team
members retained during
the reporting period (not
achieved)
•
LTIFR – maintaining a
LITFR at or below the
industry benchmark was
achieved
•
No reportable health,
safety or environmental
incidences during the
reporting period
Delivery of
timely and
accurate
management
reports
Maintenance
of a suitable
qualified
executive
team
Maintenance
of best practice
health, safety
environmental
practices
The assessment of the FY24 LTI outcomes was considered against a predetermined set of assessment criteria.
The criteria utilised were:
Metric
Weighting
Vesting Schedule
Relative Total
Shareholder Return
(rTSR)
70%
rTSR when ranked to the comparator
group of ASX 200 A-REIT Index
Payout
<50th percentile
0%
50th percentile
50%
>50th - <75th percentile
Pro-rata from 50%-100%
>=75th percentile
100%
Earnings Per Share
(EPS) Growth
30%
Compound EPS growth of 5% achieved
over the 3 year performance period.
Reference year FY21, EPS 8.5cps,
Target 9.9cps
Target was revised to 10.5cps
Payout
10.5cps
100%
In assessing performance against the criteria above the Board sourced NSR’s TSR ranking (as outlined above)
and determined that NSR ranked number five (80th percentile) for TSR over the 3 year period to 30 June 2024,
delivering 31.6% total return over the 3 year period, resulting in 100% of the TSR component being payable.
The Board also determined that the FY24 Earnings Per Share (EPS) of 11.3cps satisfied that EPS component of
the LTI, resulting in 100% of the EPS component being payable.
The STI will be paid in accordance with the payment structure outlined above with 70% being paid as cash
and 30% paid as scrip which will be restricted for a period of 12 month. The LTI will also be paid in accordance
with the payment structure outlined above with 30% paid as cash and 70% paid through the vesting of
performance rights, with any unvested performance rights lapsing. Any performance rights vesting, given the
three-year assessment period, will be issued free of restrictions. The table below outlines the cash, scrip and
performance rights components of the FY24 STI and LTI. The scrip component will be calculated using the 30-
day VWAP to 30 June 2023 of $2.4044, aligning the outcome with the share price performance for the relevant
year.
STI Payable
KMP
MAX STI
STI EARNED
STI PAYABLE
$
%
$
CASH $
SCRIP $
SCRIP @
$2.4044
Andrew Catsoulis (MD)
1,325,000
97.0%
1,285,250
899,675
385,575
160,363
Stuart Owen (CFO)
568,000
100.0%
568,000
397,600
170,400
70,871
Total
1,893,000
97.9%
1,853,250
1,297,275
555,975
231,234
LTI Payable
KMP
MAX LTI
LTI EARNED
LTI PAYABLE
CASH
($)
RIGHTS
($)
RIGHTS
(No.)
%
CASH $
RIGHTS
VESTED
RIGHTS
LAPSED
Andrew Catsoulis (MD)
315,000
735,000
359,600
100.0%
315,000
359,600
-
Stuart Owen (CFO)
120,000
280,000
137,000
100.0%
120,000
137,000
-
Total
435,000 1,015,000
496,600
100.0%
435,000
496,600
-
Total STI and LTI Payable
KMP
CASH
($)
SCRIP @
$2.4044
RIGHTS
VESTED
RIGHTS
LAPSED
Andrew Catsoulis (MD)
1,214,675
160,363
359,600
-
Stuart Owen (CFO)
517,600
70,871
137,000
-
Total
1,732,275
231,234
496,600
-
The issue of scrip to directors requires shareholder approval under the ASX Listing Rules and as such resolutions
to approve the issues for the MD will be included in the Notice of Meeting for the upcoming Annual General
Meeting. Should shareholder approval not be attained the amounts will be paid as cash.
Annual Report 2024
53
NSR REMUNERATION FRAMEWORK
KEY MANAGEMENT PERSONNEL - EXECUTIVE DIRECTORS AND SENIOR EXECUTIVES
The primary objective of the remuneration arrangements for executive directors and senior executives is to
motivate, incentivise and retain key employees whilst creating maximum alignment with corporate and
stakeholder best interests. All remuneration paid to executive directors and senior executives comprises four
components:
• Base pay and benefits (including superannuation)
• Short-term performance incentives
• Long-term performance incentives
Base salary and benefits
The Managing Director and senior executives are paid a base salary that includes employer contributions to
superannuation funds. Remuneration is reviewed annually and there is no guarantee of base salary increases.
The NSR executive management team has successfully navigated numerous significant micro and macro
challenges, achieving an outcome which is acknowledged to be one of the best performances in the A-REIT
sector from both an operational earnings and security price performance perspective.
The FY25 remuneration increases consider the senior executives’ highly demanding roles, their increasing
tenure, the additional responsibilities taken on by the executives following the restructure of the executive that
took place during FY24, high degree of competency in their respective areas as well as the sector specifics of
their individual roles and the significant increase in the size of the group from both an operational and market
capitalisation perspective. The team assembled is highly competent, cohesive, collaborative and has the
capacity to successfully manage and drive business growth well into the future. This growth involves the
evolution of NSR’s existing strategies as well as NSR embracing new strategies, designed to build on its existing
market and storage sector leadership as well as increasing its competitiveness in all areas of the business
including technological innovation and advancement. The remuneration increases also consider the
increased scope and additional duties assumed by the executives following the departure of two members of
the broader executive team during FY24.The executive team has consistently demonstrated its willingness to
make decisions in the best long-term strategic, corporate and securityholder interests of NSR.
Independent remuneration consultant SW Corporate was engaged during the Reporting Period to provide
benchmarking against the ASX200 A-REIT index and ASX75-150.
The Board has elected to position TFR and TR within the 50th to 60th percentile range of the expanded
comparator group. In general, the SW Corporate review concluded that against the ASX75-150 comparator
group, incentive opportunity levels, particularly the STI component, are generally low against comparable
roles, reducing the overall competitiveness of the total package, despite NSR’s overall performance which is
at the upper end of its comparator group. As a result, TR for all roles is below the desired positioning of the
median. Against NSR’s REIT peers however, TFR and TR is more competitive against this group, however low STI
opportunity persists.
After considering the SW Corporate report which indicated that the MD’s TFR was below the median of the
ASX peer group, and all other internal and external factors, the Board determined that the aggregate fixed
remuneration for the KMP for the year commencing 1 July 2024 will increase as per the table below. Following
this increase the MD’s TRF will sit slightly above the median for the peer group.
KMP
FY24 TFR
FY25 TFR
% CHANGE
Andrew Catsoulis (MD)
$1,325,000
$1,425,000
7.5%
Stuart Owen (CFO)
$710,000
$800,000
12.7%
The increase for the CFO takes into account the additional responsibilities taken on during FY24 associated
with becoming the Chief Investment Officer of NSR in addition to his role as CFO.
Short-term and long-term incentives
KMP senior executives may also be entitled to participate in the STI and LTI programs that are in place from
time to time. The incentive programs are at the discretion of the Board and do not constitute an entitlement
under the executive service agreements of the respective KMP. Total incentive programs are assessed against
a broad comparator group and adjusted to reflect factors such as the criticality of the role, experience,
length of service and NSR’s positioning within the comparator group including the ASX 200 A-REIT index and
ASX 75-150.
The STI and LTI incentive programs are structured such that on achievement of the certain performance
criteria, eligible executives’ total remuneration is aligned with investor interests and incentivises eligible
executives.
The existing structure has been generally well received by investors and proxy advisors, with feedback centred
around two main points, those being the lack of a link between executive remuneration and ESG, namely
climate change initiatives and the cliff vesting of the EPS component of the LTI.
Following on from the adoption of NSR’s carbon target in February 2024, it is deemed appropriate to review
the existing STI and LTI structure and address the feedback that has been received in this regard. Following
the review it was deemed appropriate to include a Sustainability component to the STI and remove the cliff
vesting associated with the EPS component of the LTI from 1 July 2024.
Short-Term Incentive (STI)
The STI contains four separate elements that will be assessed independently of the other elements. The STI is an
annual incentive and will be paid in accordance with the payment structure outlined below.
For FY25 and beyond, the Board has modified the elements of the existing structure to include a link between
executive remuneration and ESG, namely climate change initiatives. The Environmental measure will provide
a direct link between executive remuneration and ESG measures with annual targets being set for increased
installation of solar energy production capacity, LED lighting and smart energy meters across the portfolio. This
strategy and associated link to executive remuneration will assist in NSR reducing its overall energy
consumption as well as increasing the amount of internally generated electricity, both of which will help
reduce NSR’s emissions and carbon footprint. The Social and Governance aspects of ESG are included in
Individual KPI’s.
To account for the new measure the weightings of the Individual and Strategic elements of the STI have both
been reduced.
ELEMENT
PERCENTAGE
OF STI
CRITERIA
Financial
70%
Achieve Underlying Earnings as determined by the Board
Financial – Out
Performance*
10%
Exceeding Underlying Earnings targets
Environmental
10%
Delivery of Energy Efficiency Projects including the installation of
solar energy, smart energy meters and LED lighting
Individual KPI’s –
including social and
governance
10%
Individual performance criteria set in conjunction with MD/Board
Strategic
10%
Assessment in accordance with performance in the following
areas:
•
Implementation of major projects
•
Staff continuity
•
Risk management
•
Innovation and enhancement of processes and procedures
Total
100% (Max)
* The Financial Out-Performance STI is only payable to the extent that the total STI payable does not exceed 100%.
The minimum STI payable is zero and maximum STI payable is $2,136,250 for FY25 in aggregate for all KMP.
KMP
MAX STI
FY24
MAX STI
FY25
$
$
Andrew Catsoulis (MD)
1,325,000
1,496,250
Stuart Owen (CFO)
568,000
640,000
Total
1,893,000
2,136,250
Long-Term Incentive (LTI)
The LTI criteria have been set so as to align the interests of KMP with those of securityholders. The LTI contains
two separate components which are independently tested. The LTI is an annual incentive and will be paid in
accordance with the payment structure outlined below.
For FY25 and beyond, the Board has modified the elements of the existing structure to remove the cliff vesting
associated with the EPS component and introduce a sliding scale for vesting. The sliding scale will use the
existing 5.0% target as the midpoint of the payment band, with payments commencing at 4.0%, being a 50%
payment, and the EPS LTI not being fully paid until 6.0% compound growth is achieved.
Compound EPS Growth
LTI Payable
<4.0%
Nil
>=4.0% – <6.0%
Pro-rata from 50% - 100%
Annual Report 2024
55
There are no changes to the rTSR hurdle.
ELEMENT
PERCENTAGE
OF LTI
CRITERIA
Total Shareholder Return
70%
Minimum total shareholder return above the 50th percentile
in comparison to the ASX 200 A-REIT index. The LTI becomes
payable in accordance with the sliding scale below once
the 50th percentile hurdle is met.
Earnings Per Share Growth
30%
Minimum earnings per share growth of at least 4% per
annum. The LTI becomes payable in accordance with the
sliding scale above once the 4.0% growth hurdle is met.
For the purposes of determining the LTI attributable to Total Shareholder Return in any given period, the
following scale is applied:
NSR TSR v ASX 200 A-REIT INDEX
LTI PAYABLE
<50th percentile
0%
50th percentile
50%
>50th - <75th percentile
Pro-rata from 50% - 100%
>= 75th percentile
100%
The minimum LTI payable is zero and maximum LTI payable is set out below.
KMP
MAX LTI
FY24 ($)
MAX LTI
FY25 ($)
MAX LTI
FY26 ($)
MAX LTI
FY27 ($)
Andrew Catsoulis (MD)
1,050,000
1,187,500
1,391,250
1,496,250
Stuart Owen (CFO)
400,000
462,000
497,000
640,000
Total
1,450,000
1,649,500
1,888,250
2,136,250
As part of the review undertaken into the ongoing structure of the LTI, and in particular the performance rights
attached to the LTI, the Board will introduce a distribution equivalent payment on vested rights at the end of
the performance period to compensate executives for distributions foregone during the performance period.
This approach will apply to any rights issued for the FY25 year and beyond.
Future Incentives
The Board periodically reviews the structure of the incentive plans based on market best practice and
feedback received from both investors and proxy advisors and assesses the structure of forward payments to
be made under these plans and the appropriate combination of cash and scrip, to ensure the alignment of
executive remuneration with current investor expectations and returns.
In assessing the appropriate remuneration structure going forward, the Board considered several factors,
including, independent consultants report on both NSR’s current KMP remuneration levels and structure,
market practice remuneration structures of comparator companies, and investor and proxy advisor feedback.
Following detailed consideration of these factors, the Board has determined that the payment of any STI and
LTI earned will be as follows:
STI payment structure
Any STI earned for the Reporting Period, and future reporting periods, will be paid in the form of 70% cash and
30% scrip. The quantum of scrip will be determined using the 30-day VWAP up to 30 June at the
commencement of the relevant year. As such the value of the scrip component will reflect the relative share
price performance for the relevant year. The scrip will be issued at the end of the assessment period, subject
to satisfaction of the performance criteria, Board approval and any shareholder approvals required. The scrip
component will be restricted for a period of 12 months, meaning that the KMP cannot deal in the scrip for 12
months and that the Board has certain claw back rights over the scrip during the restricted period. The claw
back provisions could be triggered under circumstances such as, but not limited to:
•
Dismissal (termination for cause)
•
Fraud
•
Breach of duties
•
Serious misconduct
•
Resignation
The issue of scrip to directors requires shareholder approval under the ASX Listing Rules and as such, resolutions
to approve the issuance of scrip for the MD will need to be drafted and included in the Notice of Meeting
(NOM) for each year that an issue is required to be made. Should shareholder approval not be attained, the
Board may choose to make the equivalent award in cash.
LTI payment structure
Any LTI earned for the Reporting Period, and future reporting periods, will be paid in the form of 30% cash and
70% equity through the issue of performance rights. The cash component is designed to enable KMP to fund
any tax liability on the equity component and mitigate any need to dispose of NSR securities to fund tax
liabilities. The quantum of equity will be determined using the 30-day VWAP up to 30 June in the relevant year
that the performance rights are issued. The Board will review the use of cash as part of the LTI on a regular
basis.
The equity component is structured through the issue of performance rights at the commencement of the
three-year LTI assessment period. The performance rights will vest and convert into scrip at the end of the
assessment period, based on the performance criteria, with any unvested rights lapsing. The issue of the rights
and the conditions associated with them are contained in the NSR Equity Incentive Plan Rules.
The number of performance rights to be issued for the three-year assessment period commencing on 1 July
2024 and ending 30 June 2027 is based off the approved FY25 LTI using the 30-day VWAP to 30 June 2024 as
the issue price. As such, performance rights will be issued based on a calculation price of $2.3081 with the
number of rights to be issued (rounded up to the nearest 100) included in the table below.
KMP
LTI
AVAILABLE
$
EQUITY
COMPONENT
70%
PERFORMANCE
RIGHTS VESTING
30 JUNE 2027
Andrew Catsoulis (MD)
1,496,250
1,047,375
453,800
Stuart Owen (CFO)
640,000
448,000
194,100
The issue of scrip, including performance rights, to directors requires shareholder approval under the ASX Listing
Rules and as such resolutions to approve the issues for the MD will be included in the Notice of Meeting (NOM)
for the upcoming Annual General Meeting. Should shareholder approval not be attained, the Board may
choose to make the award in cash.
Other Remuneration
There was no other remuneration in relation to FY24.
NON-EXECUTIVE DIRECTORS
Fees and payments to non-executive directors reflect the demands which are made on, and the
responsibilities of, the non-executive directors and their contribution towards the performance of NSR as well
as the complexity of the National Storage Property Trust, National Storage Financial Services Limited and the
operating business. The remuneration policy seeks to ensure that NSR attracts and retains high quality directors
with appropriate experience and qualifications to oversee the operations of NSR on behalf of the
securityholders.
The number of meetings of directors is shown on page 41 of this report.
The Constitution of NSH specifies that the amount of the remuneration of the non-executive directors is a
yearly sum not exceeding the sum from time to time determined by the Company in a general meeting.
Under the ASX Listing Rules, the total amount paid to all NSH non-executive directors for their services must not
exceed in aggregate in any financial year the amount fixed by NSH’s annual general meeting. The amount
approved by securityholders at the 2019 Annual General meeting was $1,200,000.
NSH non-executive directors’ fees and Committee fees currently agreed to be paid by NSH effective from 1
July 2024 are detailed below. The fees have increased by an average of 6.0% and have taken into account
the external independent benchmarking exercise undertaken, the increasing size and complexity of the
company and the increasing regulatory burden imposed on directors. Non-executive directors are not
eligible to participate in NSR’s incentive plan.
NON-EXECUTIVE DIRECTORS
BASE FEE
AUDIT AND RISK
COMMITTEE FEES
REMUNERATION AND
NOMINATION COMMITTEE FEES
TOTAL
Anthony Keanea.
$365,000
Howard Brenchley b.
155,000
$37,500
$16,000
$208,500
lnmaculada Beaumont
155,000
$17,500
$16,000
$188,500
Scott Smith c.
155,000
$17,500
$30,000
$202,500
a. Chairman and Chair of the Nomination Committee and receives a single fee for all roles
b. Chair of the Audit and Risk Committee
c. Chair of the Remuneration Committees
Annual Report 2024
57
Where applicable, NSH non-executive directors’ fees include superannuation at the required statutory rate.
Service agreements
Remuneration and other terms of employment for the KMP senior executives are formalised in service
agreements. The service agreements specify the components of remuneration, benefits and notice periods.
Termination benefits are designed to fall within the limits relevant to the Corporations Act 2001 (Cth) such that
they do not require securityholder approval. However, in addition, all executive contracts make any such
benefits subject to the Corporations Act 2001 (Cth), all other applicable laws and where necessary
securityholder approval. They also contain provisions which allow NSH to reduce any such payments to ensure
compliance with the law.
The terms of employment for the KMP effective from 1 July 2024 period are set out in the table below.
NAME
TERM OF
AGREEMENT AND
NOTICE PERIOD
BASE SALARY*
INCLUDING
SUPERANNUATION
TERMINATION PAYMENTS
Andrew Catsoulis
No fixed term
6 months
$1,425,000
• 6 months in lieu of notice if required by NSH
• 6 months in the event of incapacity or illness
Stuart Owen
No fixed term
6 months
$800,000
• 6 months in lieu of notice if required by NSH.
• 6 months in the event of incapacity or illness
• a redundancy payment in accordance with
the Fair Work Act 2009 (Cth) in the event of
redundancy
* Base salaries are annual salaries for the financial year commencing 1 July 2024. They are reviewed annually
by the Remuneration Committee. Actual salaries paid in the year ended 30 June 2024 are shown on page 58.
On 27 March 2024, Claire Fidler resigned from her role as Executive Director & Company Secretary, Head of
Legal & Governance. She was paid her contractual entitlements, which included a termination payment of
$262,500 as per her contract. She was not eligible to receive an FY24 STI award and all unvested LTI awards
lapsed.
REMUNERATION GOVERNANCE
REMUNERATION COMMITTEE AND USE OF REMUNERATION CONSULTANTS
The Remuneration Committee’s activities are governed by its Charter, a copy of which is available at
www.nationalstorageinvest.com.au/governance.
The responsibilities of the Remuneration Committee include:
•
formulate and recommend remuneration policies to apply to the company’s managing director, senior
executives and non-executive directors;
•
formulate the specific remuneration packages for senior executives (including base salary, short-term
and long-term incentives and other contractual benefits);
•
review contractual rights of termination for senior executives;
•
review the appropriateness of the company’s succession planning policies;
•
review management’s recommendation of the total proposed STI and LTI awards;
•
administer the STI and LTI awards; and
•
review management recommendations regarding the remuneration framework for the company as a
whole.
The deliberations of the Remuneration Committee, including any recommendations made on remuneration
issues, are considered by the full NSH Board. In making its recommendations to the Board, the Remuneration
Committee takes into account advice from independent remuneration advisors on trends in remuneration for
KMP. The independent remuneration advisors consider a range of factors including the specific responsibilities
assumed by KMP. An independent remuneration consultant, SW Corporate, was engaged during the
Reporting Period to assess the directors’ and senior executives’ current remuneration and remuneration
structure. The advice did not constitute a remuneration recommendation as defined in the Corporations Act
Cth 2001.
The Remuneration Committee comprises four independent non-executive directors and is chaired by Scott
Smith. The Remuneration Committee met five times during the Reporting Period.
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
The overall objective of the remuneration policy is to ensure that Group remuneration is competitive, reflects
responsibilities of the officers and ensures that NSR is able to attract and retain highly capable executives and
directors with the appropriate skills and capabilities required to sustainably deliver NSR’s objectives.
The remuneration of directors and senior executives is reviewed at least annually by the Remuneration
Committee and the full NSH Board. External analysis and advice is sought by the Committee, where
considered appropriate, to ensure that the remuneration for directors and senior executives is competitive in
the marketplace and appropriate for the organisation.
The policy seeks to align executive reward with the achievement of strategic objectives and the creation of
value for securityholders. The primary tenets of the policy are:
•
Attract and retain high-quality executives and to reward the capabilities and experience brought to
NSR by those executives;
•
Total reward for key executives is to have a significant “at risk” component;
•
The “at risk” component for key executives is to include both short-term incentives (“STI”) and long-term
incentives (“LTI”) that have a strong focus on quantitative and non-quantitative measures;
•
Provide industry competitive rewards linked to securityholder returns;
•
Provide recognition for contribution, complexity of role and responsibilities of the executive and Board;
•
Remuneration policies and structures must be clear and transparent both to the executives and Board
of NSR and to securityholders; and
•
Promote and encourage a strong, responsible and positive culture amongst all NSR employees
•
TARGET MARKET POSITIONING
Total Annual Remuneration (TAR) is assessed against a broad comparator group and adjusted to reflect
factors such as the criticality and complexity of the role, experience, length of service and NSR’s positioning
within the group. The individual components of TAR, comprising Total Fixed Remuneration (TFR), STI and LTI are
individually assessed within this framework and structured to provide both short-term and long-term incentives
to KMP that align with delivery of short-term and long-term value to securityholders.
When selecting the comparator group, the data is collected from a combination of sources including audited
Remuneration Reports of the selected companies and information provided in FY24 by SW Corporate as part
of the review of remuneration and remuneration structures. The NSR Board believes this provides an
appropriate pool of data that is statistically relevant. This data is then assessed against NSR’s current size,
industry positioning and other relevant factors to determine the appropriate information against which to
assess NSR’s remuneration framework.
Annual Report 2024
59
DETAILS OF REMUNERATION
The following tables set out details of the remuneration received by the Company’s KMP for the Reporting Period.
SALARY & FEES
SHORT TERM
INCENTIVE
(CASH)
SHORT TERM
INCENTIVES
(EQUITY
SETTLED)
NON-
MONETARY
BENEFITS
POST-EMPLOYMENT
BENEFITS
SUPERANNUATION
LONG TERM
INCENTIVE
(CASH)
VESTED LONG
TERM
INCENTIVES
(EQUITY
SETTLED)
LONG
SERVICE
LEAVE
TERMINATION
PAYMENT
TOTAL
PERFORMANCE
RELATED
2024
$
$
$
$
$
$
$
$
$
$
%
Non-executive directors
Anthony Keane
322,601
-
-
1,620
27,399
-
-
-
-
351,620
0%
Howard Brenchley
195,000
-
-
-
-
-
-
-
-
195,000
0%
Scott Smith
191,699
-
-
-
-
-
-
-
-
191,699
0%
Inmaculada Beaumont
157,752
-
-
-
17,306
-
-
-
-
175,058
0%
Executive directors
Andrew Catsoulis
1,331,484
899,675
385,575
10,560
27,399
315,000
735,000
29,842
-
3,734,535
63%
Claire Fidler (2)
376,767
-
-
7,869
20,549
-
-
8,787
262,500
676,472
0%
Senior executives
Stuart Owen
721,811
397,600
170,400
10,560
27,399
120,000
280,000
15,991
-
1,743,761
56%
Total
3,297,114
1297,275
555,975
30,609
120,052
435,000
1,015,000
54,620
262,500
7,068,145
SALARY & FEES
SHORT TERM
INCENTIVE
(CASH)
SHORT TERM
INCENTIVES
(EQUITY
SETTLED)
NON-
MONETARY
BENEFITS
POST-EMPLOYMENT
BENEFITS
SUPERANNUATION
LONG TERM
INCENTIVE
(CASH)
VESTED LONG
TERM
INCENTIVES
(EQUITY
SETTLED)
LONG
SERVICE
LEAVE
TERMINATION
PAYMENT
TOTAL
PERFORMANCE
RELATED
2023
$
$
$
$
$
$
$
$
$
$
%
Non-executive directors
Anthony Keane
300,972
-
-
1,881
25,292
-
-
-
-
328,145
0%
Howard Brenchley
186,400
-
-
-
-
-
-
-
-
186,400
0%
Scott Smith
168,033
-
-
-
-
-
-
-
-
168,033
0%
Inmaculada Beaumont
146,035
-
-
-
15,276
-
-
-
-
161,311
0%
Steven Leigh (1)
51,182
-
-
-
5,429
-
-
-
-
56,611
0%
Executive directors
Andrew Catsoulis
1,214,986
833,000
357,000
10,560
25,292
315,000
735,000
28,281
-
3,519,119
64%
Claire Fidler
451,011
182,000
78,000
10,560
25,292
57,000
133,000
10,747
-
947,610
47%
Senior executives
Stuart Owen
674,005
329,000
141,000
10,560
25,292
120,000
280,000
14,932
-
1,594,789
55%
Total
3,192,624
1,344,000
576,000
33,561
121,873
492,000
1,148,000
53,960
-
6,962,018
(1) – Mr Leigh retired from the Board effective 26 October 2022
(2) – Ms Fidler retired from the Board effective 27 March 2024 and her position as Company Secretary effective 20 May 2024
PERFORMANCE RIGHTS AWARDED, VESTED AND LAPSED DURING THE YEAR
Name
Award
Year of
grant
Year in
which
rights
vest
Number of
rights
granted
during the
year
Fair value of
right at grant
date*
Rights vested
during the
year
Rights lapsed
or forfeited
during the
year
Value of
rights
granted
during the
year*
Andrew Catsoulis (MD)
FY24 Performance Rights - TSR
2022
2024
251,720
$1.35
251,720
-
$339,822
FY24 Performance Rights - EPS
2022
2024
107,880
$2.22
107,880
-
$239,494
FY25 Performance Rights - TSR
2023
2025
258,160
$1.35
- -
$348,516
FY25 Performance Rights - EPS
2023
2025
110,640
$2.22
- -
$245,621
FY26 Performance Rights - TSR
2024
2026
283,570
$1.00
- -
$283,570
FY26 Performance Rights - EPS
2024
2026
121,530
$1.76
- -
$213893
Claire Fidler (HoLG)
FY24 Performance Rights - TSR
2022
2024
45,570
$1.35
-
45,570
$0
FY24 Performance Rights - EPS
2022
2024
19,530
$2.22
-
19,530
$0
FY25 Performance Rights - TSR
2023
2025
56,420
$1.35
-
56,420
$0
FY25 Performance Rights - EPS
2023
2025
24,180
$2.22
-
24,180
$0
FY26 Performance Rights - TSR
2024
2026
58,870
$1.00
-
58,870
$0
FY26 Performance Rights - EPS
2024
2026
25,230
$1.76
-
25,230
$0
Stuart Owen (CFO)
FY24 Performance Rights - TSR
2022
2024
95,900
$1.35
95,900
-
$129,465
FY24 Performance Rights - EPS
2022
2024
41,100
$2.22
41,100
-
$91,242
FY25 Performance Rights - TSR
2023
2025
101,990
$1.35
- -
$137,687
FY25 Performance Rights - EPS
2023
2025
43,710
$2.22
- -
$97,036
FY26 Performance Rights - TSR
2024
2026
101,290
$1.00
- -
$101,290
FY26 Performance Rights - EPS
2024
2026
43,410
$1.76
- -
$76,402
* Determined at the time of grant per AASB 2. For details on the valuation of performance rights, including models and assumptions used, please refer to note 21.
There were no alterations to the terms and conditions of performance rights awarded as remuneration since their grant date.
Annual Report 2024
61
SECURITYHOLDINGS OF DIRECTORS AND EXECUTIVES
The movement during the Reporting Period in the number of stapled securities, directly, indirectly or
beneficially held by Directors and KMP senior executives, including parties related to them, is as follows:
BALANCE
30 JUNE
2023
GRANTED AS
REMUNERATION
ON
EXERCISE
OF OPTIONS
ACQUIRED
BALANCE
30 JUNE
2024
Directors of NSH
Anthony Keane
254,465
-
-
-
254,465
Andrew Catsoulis
15,265,230
517,642
-
-
15,782,872
Howard Brenchley
135,200
-
-
-
135,200
Scott Smith
154,958
-
-
-
154,958
Inmaculada Beaumont
37,449
-
-
-
37,449
Claire Fidler(1)
153,519
99,631
-
-
-
Executives of NSH
Stuart Owen
415,301
199,420
-
-
614,721
Total
16,416,122
816,693
-
-
16,979,665
1.
Ms Fidler ceased being a Director effective 27 March 2024
The movement during the Reporting Period in the number of performance rights, directly, indirectly or
beneficially held by Directors and KMP senior executives, including parties related to them, is as follows:
BALANCE
30 JUNE
2023
GRANTED AS
REMUNERATION
VESTED
LAPSED/
FORFIETED
BALANCE
30 JUNE 2024
Directors of NSH
Anthony Keane
-
-
-
-
-
Andrew Catsoulis
1,088,000
405,100
359,600
-
1,133,500
Howard Brenchley
-
-
-
-
-
Scott Smith
-
-
-
-
-
Inmaculada Beaumont
-
-
-
-
-
Claire Fidler*
210,800
84,100
65,100
229,800
-
Executives of NSH
Stuart Owen
419,700
144,700
137,000
-
427,400
Total
1,718,500
633,900
561,700
229,800
1,560,900
* Ms Fidler ceased being a Director effective 27 March 2024
RELATED PARTY TRANSACTIONS
There were no other transactions with KMP and their related parties during the reporting period.
SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE
For the period from 1 July 2024 to the date of this report the Group settled one storage centre investment
property, and four development sites for total consideration of $62.2m.
In July 2024, the Group increased the size of its NZD interest rate derivatives by $25m NZD and extended
the final maturity date to 23 June 2028.
In August 2024, the Group transacted $260m of new interest rate derivatives, comprising of interest rate
swaps and interest rate caps. These commence on 23 December 2024 and mature on 23 December 2026.
The Group also entered into $260m of interest rate swaptions which commence on 23 December 2026 and
mature on 23 December 2029.
ROUNDING
The amounts contained in this Directors’ Report and in the Financial Report have been rounded to the
nearest $1,000 (unless otherwise stated) under the option available under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/1 1. The Consolidated Group and NSPT Group are entities to
which the ASIC Instrument applies.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act
2001 (Cth) is set out on page 63.
Non-audit services
The following non-audit services were provided by the entity's auditor, Ernst & Young Australia. The
Directors of NSH are satisfied that the provision of non-audit services is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001 (Cth). The nature and
scope of each type of non-audit service provided means that auditor independence was not
compromised.
Ernst & Young Australia received or are due to receive $216,761 for the provision of Category 4 fees for
other services conducted during the financial year. Refer note 22 of the financial statements.
FEES PAID TO AND INTERESTS HELD IN NSPT BY THE RESPONSIBLE ENTITY OR ITS ASSOCIATES
Fees paid to the Responsible Entity and its associates out of NSPT property during the year are disclosed in
the Statement of Comprehensive Income and are detailed in Note 18 to the financial statements.
No fees were paid to the Directors of the Responsible Entity during the year out of NSPT.
INTERESTS IN NSPT
The movement in units on issue by NSPT during the year is set out in Note 14 to the financial statements.
This Directors’ Report is made on 21 August 2024 in accordance with a resolution of the Board of Directors
of National Storage Holdings Limited and is signed for and on behalf of the Directors.
Anthony Keane
Andrew Catsoulis
Non-Executive Chairman
Managing Director
National Storage Holdings Limited
National Storage Holdings Limited
Brisbane
Brisbane
FINANCIAL
STATEMENTS
Annual Report 2024
63
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s independence declaration to the directors of National Storage Holdings
Limited and its controlled entities
As lead auditor for the audit of the financial report of National Storage Holdings Limited and its
controlled entities for the financial year ended 30 June 2024, I declare to the best of my knowledge
and belief, there have been:
a.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b.
No contraventions of any applicable code of professional conduct in relation to the audit; and
c.
No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of National Storage Holdings Limited and the entities it controlled during
the financial year.
Ernst & Young
Wade Hansen
Partner
Brisbane
21 August 2024
Annual Report 2024
65
The above Consolidated Statement of Profit or Loss should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2024
2024
2023
Notes
$'000
$'000
Revenue from rental income
333,108
312,735
Revenue from contracts with customers
5
20,041
14,647
Interest income
7
2,221
2,654
Total revenue
355,370
330,036
Employee expenses
6
(59,699)
(58,163)
Premises costs
(43,260)
(37,840)
Advertising and marketing costs
(7,820)
(8,908)
Insurance costs
(7,199)
(6,585)
Information technology and communications
(8,764)
(7,911)
Other operational expenses
6
(17,345)
(17,835)
Finance costs
7
(52,126)
(47,960)
Share of profit / (loss) from joint ventures and associates
13
1,245
(23)
Gain from fair value adjustments
8
86,702
188,011
Restructuring costs
(4,908)
-
Foreign exchange (losses) / gains
(454)
1,395
Profit before income tax
241,742
334,217
Income tax expense
9
(11,471)
(13,817)
Profit after income tax
230,271
320,400
Profit for the year attributable to:
Members of National Storage Holdings Limited
28,934
37,304
Non-controlling interest (unitholders of NSPT)
201,337
283,096
230,271
320,400
Basic earnings per stapled security (cents)
20
16.90
25.75
Diluted earnings per stapled security (cents)
20
16.89
25.71
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
60
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
2024
2023
$'000
$'000
Profit after income tax
230,271
320,400
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
(2,372)
4,357
Net (loss) / gain on cash flow hedges
(5,161)
579
Other comprehensive (loss) / gain for the year, net of tax
(7,533)
4,936
Total comprehensive income for the year
222,738
325,336
Total comprehensive income for the year attributable to:
Members of National Storage Holdings Limited
28,924
37,368
Non-controlling interest (unitholders of NSPT)
193,814
287,968
222,738
325,336
Annual Report 2024
67
The above Consolidated Statement of Financial Position should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
2024
2023
Notes
$'000
$'000
ASSETS
Current assets
Cash and cash equivalents
10.1
55,245
67,330
Trade and other receivables
10.2
18,134
17,308
Inventories
11.1
1,592
2,107
Assets held for sale
11.2
142,673
-
Income tax receivable
159
-
Other current assets
10.3
14,751
11,383
Total current assets
232,554
98,128
Non-current assets
Trade and other receivables
10.2
2,362
181
Property, plant and equipment
11.3
1,466
1,241
Right of use assets
10.7
3,301
4,381
Investment properties
11.4
4,829,600
4,384,736
Investment in joint ventures and associates
13
8,855
8,986
Intangible assets
11.5
47,246
47,024
Deferred tax assets
9
10,995
9,176
Other non-current assets
10.3
30,362
28,183
Total non-current assets
4,934,187
4,483,908
Total assets
5,166,741
4,582,036
LIABILITIES
Current liabilities
Trade and other payables
10.4
40,508
30,117
Lease liabilities
10.7
11,639
11,285
Deferred revenue
11.6
16,372
17,045
Income tax payable
1,501
8,606
Provisions
11.7
5,359
4,947
Distribution payable
17
75,369
74,161
Other liabilities
10.6
519
-
Total current liabilities
151,267
146,161
Non-current liabilities
Trade and other payables
10.4
1,156
1,283
Borrowings
10.5
1,395,531
941,133
Lease liabilities
10.7
82,107
90,086
Provisions
11.7
9,448
9,359
Deferred tax liabilities
9
6,656
6,208
Other liabilities
10.6
13,755
1,289
Total non-current liabilities
1,508,653
1,049,358
Total liabilities
1,659,920
1,195,519
Net assets
3,506,821
3,386,517
EQUITY
Non-controlling interest (unitholders of NSPT)
3,201,542
3,113,954
Contributed equity
14
196,004
191,938
Other reserves
15
2,059
2,343
Retained earnings
107,216
78,282
Total equity
3,506,821
3,386,517
The above Consolidated Statement of Changes in Equity should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Attributable to securityholders of National Storage REIT
Contributed
equity
Retained
earnings
Other
reserves
Non-
controlling
interest
Total
equity
Notes
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2023
191,938
78,282
2,343
3,113,954
3,386,517
Profit for the year
-
28,934
-
201,337
230,271
Other comprehensive loss
15
-
-
(10)
(7,523)
(7,533)
Total comprehensive income
-
28,934
(10)
193,814
222,738
Issue of stapled securities
14
4,070
-
(1,498)
44,074
46,646
Costs associated with issue
of stapled securities
(6)
-
-
(68)
(74)
Deferred tax on issue of stapled
securities
9
2
-
-
-
2
Share-based payments
21
-
-
1,224
-
1,224
Distributions
17
-
-
-
(150,232)
(150,232)
4,066
-
(274)
(106,226)
(102,434)
Balance at 30 June 2024
196,004
107,216
2,059
3,201,542
3,506,821
Balance at 1 July 2022
163,526
40,978
2,415
2,631,973
2,838,892
Profit for the year
-
37,304
-
283,096
320,400
Other comprehensive income
15
-
-
64
4,872
4,936
Total comprehensive income
-
37,304
64
287,968
325,336
Issue of stapled securities
14
28,702
-
(1,640)
338,968
366,030
Costs associated with issue
of stapled securities
(414)
-
-
(4,793)
(5,207)
Deferred tax on issue of stapled
securities
9
124
-
-
-
124
Share-based payments
21
-
-
1,504
-
1,504
Distributions
17
-
-
-
(140,162)
(140,162)
28,412
-
(136)
194,013
222,289
Balance at 30 June 2023
191,938
78,282
2,343
3,113,954
3,386,517
Annual Report 2024
69
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
2024
2023
Notes
$’000
$’000
Operating activities
Receipts from customers
388,448
363,733
Payments to suppliers and employees
(187,403)
(164,427)
Interest received
10.1
3,274
2,330
Income tax paid
10.1
(19,902)
(13,325)
Net cash flows from operating activities
10.1
184,417
188,311
Investing activities
Purchase of investment properties
(204,685)
(131,501)
Development of investment properties under construction
(248,587)
(206,183)
Improvements to investment properties
(11,479)
(6,199)
Purchase of property, plant and equipment
11.3
(830)
(573)
Development of intangible assets
(491)
(998)
Investments in associates and joint ventures
13
(5,572)
(100)
Financing provided to joint venture
(6,550)
-
Repayment of financing from joint ventures
4,625
1,150
Distributions received from joint ventures
13
5,200
1,619
Disposal of shareholding in joint venture
13
1,748
-
Net cash flows used in investing activities
(466,621)
(342,785)
Financing activities
Proceeds from issue of stapled securities
14
-
340,360
Costs associated with issue of stapled securities
(74)
(5,207)
Distributions paid to stapled security holders
16
(102,378)
(104,888)
Proceeds from borrowings
738,373
798,403
Repayment of borrowings
(285,126)
(829,351)
Payment of principal and interest on lease liabilities
(15,944)
(14,624)
Interest and other finance costs paid
(64,721)
(46,603)
Net cash flows from financing activities
270,130
138,090
Net decrease in cash and cash equivalents
(12,074)
(16,384)
Net foreign exchange difference
(11)
63
Cash and cash equivalents at 1 July
67,330
83,651
Cash and cash equivalents at 30 June
10.1
55,245
67,330
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
1.
CORPORATE INFORMATION
National Storage REIT (“the Group” or “NSR”) is a joint quotation of National Storage Holdings Limited
(“NSH” or “the Company”) and its controlled entities (“NSH Group”) and National Storage Property Trust
(“NSPT” or “the Trust”) and its controlled entities (“NSPT Group”) on the Australian Securities Exchange
(“ASX”).
The Constitutions of NSH and NSPT ensure that, for so long as the two entities remain jointly quoted, the
number of shares in the Company and the number of units in the Trust shall be equal and that the
shareholders and unitholders be identical. Both the Company and the Responsible Entity (National
Storage Financial Services Limited) of the Trust must at all times act in the best interest of NSR. The
stapling arrangement will continue until either the winding up of the Company or the Trust, or termination
by either entity.
The financial report of NSR for the year ended 30 June 2024 was approved on 21 August 2024, in
accordance with a resolution of the Board of Directors of NSH.
The nature of the operations and principal activities of the Group are described in the Directors' Report.
2.
SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
(a)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”)
and the Corporations Act 2001. The financial statements have been prepared on a historical cost basis,
except for selected non-current assets, financial assets and financial liabilities for which the fair value
basis of accounting has been applied. NSH is a for-profit entity for the purpose of preparing the financial
statements.
The financial statements are presented in Australian Dollars (“AUD”) and all values are rounded to the
nearest thousand dollars ($’000) unless otherwise stated (refer to note 2(v)).
The accounting policies applied by NSR in these financial statements are the same as the 30 June 2023
financial statements except for the accounting policies impacted by new or amended accounting
standards detailed in this note.
The Group has elected to present only financial information relating to NSR within these financial
statements. A separate financial report for the NSPT Group has also been prepared for the year ended 30
June 2024. This is available at www.nationalstorageinvest.com.au.
Net current asset surplus
As at 30 June 2024, the Group had an excess of current assets over current liabilities of $81.3m. This has
been impacted by the classification of $141.4m of investment properties (non-current assets) to assets
held for sale (current assets).
As at 30 June 2023, the Group had an excess of current liabilities over current assets of $48.0m.
Accounting standards require the lease liability to be split between current and non-current while the
corresponding asset is classed as non-current. This results in $10.4m of lease liabilities being classified as
current (30 June 2023: $10.1m). The excess of the total investment property value over the finance lease
liability reflects a positive position in both the immediate and long-term. Current liabilities also include
deferred revenue of $16.4m associated with prepaid storage rentals which are not expected to result in a
cash outflow (30 June 2023: $17.0m).
Annual Report 2024
71
The Group generated operating cash flows of $184.4m for the year ended 30 June 2024 (30 June 2023:
$188.3). Sufficient cash inflows from operations are expected to enable all liabilities to be paid when due
throughout the next financial year. The Group also has undrawn facilities of $442.1m which have a tenor
of over one year. The Group’s gearing levels remain low at 26.6% as at 30 June 2024 (30 June 2023: 19.8%)
The financial report has been prepared on a going concern basis as the Directors believe the Group will
continue to generate operating cash flows to meet all liability obligations in the ordinary course of
business.
(b)
Compliance with IFRS
The consolidated financial statements of the Group comply with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board.
(c)
Changes in accounting policy, disclosures, standards and interpretations
The Group has adopted all of the new and revised Standards and Interpretations issued by the AASB that
are relevant to its operations and effective for the current year.
Several other amendments and interpretations apply for the first time in the reporting period, but do not
have a material impact on the consolidated financial report of the Group. The Group has not early
adopted any other standards.
Accounting standards and interpretations issued but not yet effective
Australian Accounting Standards and Interpretations relevant to the Group’s operations, that have
recently been issued or amended but are not yet effective or have not been adopted for the annual
reporting year ended 30 June 2024 are outlined in the following table:
Reference
Title
Summary and impact on Group
financial report
Application
date of
standard
Application
date for
Group
AASB 2020-1
Amendments to
AASs –
Classification of
Liabilities as
Current or Non-
current
A liability is classified as current if the entity
has no right at the end of the reporting
period to defer settlement for at least 12
months after the reporting period. The
AASB recently issued amendments to AASB
101 Presentation of Financial Statements to
clarify the requirements for classifying
liabilities as current or non-current.
The amendments specify that the
conditions which exist at the end of the
reporting period are those which will be
used to determine if a right to defer
settlement of a liability exists.
Management intention or expectation
does not affect classification of liabilities.
1 January
2024
1 July 2024
AASB 2014-10 Amendments to
Australian
Accounting
Standards – Sale
or Contribution of
Assets between
an Investor and
its Associate or
Joint Venture
AASB 2014-10 amends AASB 10
Consolidated Financial Statements and
AASB 128 Investments in Associates and
Joint Ventures to address an inconsistency
between the requirements in AASB 10 and
those in AASB 128, in dealing with the sale
or contribution of assets between an
investor and its associate or joint venture.
1 January
2025
1 July 2025
(d)
Basis of consolidation
The Financial Statements of NSR comprises the
consolidated financial statements of the NSH
Group and the NSPT Group.
The financial statements for the Group are
prepared on the basis that NSH was the acquirer
of NSPT. The non-controlling interest, attributable
to stapled securityholders is presented
separately in the consolidated statement of
comprehensive income and within equity in the
consolidated statement of financial position,
separately from parent shareholders’ equity.
Subsidiaries
Subsidiaries are all entities over which the Group
has control. The Group controls an entity when it
is exposed to, or has rights to, variable returns
from its involvement with the entity and has the
ability to affect those returns through the power
to direct the activities of the entity.
Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and
ceases when the Group loses control. The
acquisition method of accounting is used to
account for business combinations (see note
2(h).
Intercompany transactions, balances and
unrealised gains on transactions between group
entities are eliminated. Unrealised losses are also
eliminated unless the transaction provides
evidence of an impairment of the transferred
asset. Accounting policies of all subsidiaries are
consistent with the policies adopted by the
Group.
The Group treats transactions with non-
controlling interests that do not result in a loss of
control as transactions with equity owners of the
Group. A change in ownership interest results in
an adjustment between the carrying amounts of
the controlling and non-controlling interests to
reflect their relative interests in the subsidiary.
Any difference between the amount of the
adjustment to non-controlling interests and any
consideration paid or received is recognised in
a separate reserve within equity attributable to
owners of the parent entity.
Associates
Associates are all entities over which the Group
has significant influence but not control. This is
generally the case where the Group holds
between 20% and 50% of the voting rights.
Investments in associates are accounted for
using the equity method.
Joint arrangements
Under AASB 11 Joint Arrangements, investments
in joint arrangements are classified as either joint
operations or joint ventures. The classification
depends on the contractual rights and
obligations of each investor, rather than the
legal structure of the joint arrangement.
Investments in joint ventures are accounted for
using the equity method.
Reference
Title
Summary and impact on Group
financial report
Application
date of
standard
Application
date for
Group
AASB 18
Presentation and
Disclosure in
Financial
Statements
AASB 18 establishes new presentation and
disclosure requirements. These include the
presentation of newly defined subtotals in
the statement of profit or loss, the
disclosure of management-defined
performance measures and enhanced
requirements for grouping information.
The standard introduces three new
categories for the classification of income
and expenses in the statement of profit
and loss: operating, investing and
financing.
AASB 18 will replace AASB 101 Presentation
of Financial Statements.
1 January
2027
1 July 2027
Annual Report 2024
73
Equity method
Under the equity method, the investment in an
associate or a joint venture is initially recognised
at cost. The carrying amount of the investment is
adjusted to recognise changes in the Group’s
share of net assets since the acquisition date.
Goodwill relating to the associate or joint
venture is included in the carrying amount of the
investment and is neither amortised nor
individually tested for impairment.
The consolidated statement of profit or loss
reflects the Group’s share of the results of
operations of the associate or joint venture. Any
change in other comprehensive income (“OCI”)
of those investees is presented as part of the
Group’s other comprehensive income.
In addition, when there has been a change
recognised directly in the equity of the
associate or joint venture, the Group recognises
its share of any changes, when applicable, in
the statement of changes in equity. Unrealised
gains and losses resulting from transactions
between the Group and the associate or joint
venture are eliminated to the extent of the
interest in the associate or joint venture.
The aggregate of the Group’s share of profit or
loss from associates and joint ventures is shown
on the face of the consolidated statement of
profit or loss. This represents profit or loss after tax
and non-controlling interests in the subsidiaries of
associates or joint ventures.
The financial statements of associates and joint
ventures are prepared for the same reporting
period as the Group. When necessary,
adjustments are made to bring the accounting
policies in line with those of the Group.
After application of the equity method, at each
reporting date the Group determines whether
there is objective evidence that the investment
in the associate or joint venture is impaired. If
there is such evidence, the Group calculates
the amount of impairment as the difference
between the recoverable amount of the
associate or joint venture and its carrying value,
then recognises the loss as ‘Share of profit or loss
of joint ventures and associates’ in the
consolidated statement of profit or loss.
Upon loss of significant influence over an
associate or joint control over the joint venture,
the Group measures and recognises any
retained investment at its fair value. Any
difference between the carrying amount of the
associate or joint venture upon loss of significant
influence or joint control and the fair value of
the retained investment and proceeds from
disposal is recognised in profit or loss.
(e)
Revenue recognition
Revenue is recognised when performance
obligations have been met and is measured at
the fair value of the consideration received or
receivable to the extent it is probable the
economic benefits will flow to the Group and
the revenue can be reliably measured.
The Group’s revenue is disaggregated in the
consolidated statement of profit or loss with the
exception of revenue from contracts with
customers which is disaggregated into
categories in note 5 that depict how the nature,
amount, timing and uncertainty of revenue and
cash flows are affected by economic factors.
The following specific recognition criteria must
also be met before revenue is recognised:
Revenue from rental income
Revenue from rental income relating to the
provision of storage space and commercial
units is recognised over the term of the general
agreement. The value of discounts offered to
customers at the end of an incentive period is
recognised over the expected rental period.
Interest income
Interest income is recognised using the effective
interest method.
Revenue from contracts with customers
Revenue is recognised under AASB 15 Revenue
from Contracts with Customers and applies to all
revenue from contracts with customers, unless
those contracts are in the scope of other
standards.
The Group follows a five-step model to account
for revenue arising from contracts with
customers. Revenue is recognised at an amount
that reflects the consideration to which an entity
expects to be entitled to, in exchange for
transferring goods or services to a customer. The
Group exercises judgement, taking into
consideration all of the relevant facts and
circumstances when applying each step of the
model to contracts with their customers.
Revenue is measured at the expected
consideration received or receivable, taking
into account contractually defined terms of
payment and excluding taxes or duty.
The Group assesses its revenue arrangements
against specific criteria to determine if it is
acting as principal or agent. The specific
recognition criteria described below must also
be met before revenue is recognised.
Sale of goods and services
Revenue from the sale of goods is recognised
on fulfilment of performance obligations. The
Group recognises revenue at the point in time
when control of the asset is transferred to the
customer, generally on delivery of the goods or
service.
Agency fees and commission
The Group acts as an agent in the provision of
insurance services provided by a third party
insurance company to storage rental customers.
The Group’s contracts with customers for
agency fees and commissions consist of one
performance obligation. The Group recognises
revenue at the point in time when the
commission is generated and is receivable.
Design and development fees
The Group’s design and development fees to
customers consist of one performance
obligation. The Group recognises revenue from
design and development fees over the relevant
period of the performance obligations as the
Group’s performance creates or enhances an
asset that the customer controls.
Management fees
The Group’s contracts with customers for
management fees are recognised over the
period of the management agreement, in line
with recurring performance obligations.
(f)
Taxes
The Group comprises taxable and non-taxable
entities. A liability for current and deferred tax
expense is only recognised in respect of taxable
entities that are subject to income tax.
NSPT is a ‘flow through’ entity for Australian
income tax purposes and is an Attribution
Managed Investment Trust, such that the
determined tax components of NSPT will be
taxable in the hands of unitholders on an
attribution basis. NSPT’s subsidiary, National
Storage New Zealand Property Trust (“NSNZPT”),
is an Australian registered trust which owns
investment property in New Zealand. For New
Zealand tax purposes NSNZPT is classed as a unit
trust and is subject to New Zealand income tax.
Current income tax
Current income tax assets and liabilities are
measured at the amount expected to be
recovered or paid to the taxation authorities.
The tax rates and laws used to compute the
amount are those that are enacted or
substantively enacted at the reporting date in
the countries where the Group operates and
generates taxable income.
Current income tax relating to items recognised
directly in equity is recognised in equity and not
in the consolidated statement of profit or loss.
Management periodically evaluates tax
positions where the interpretation of applicable
tax regulations is subjective and establishes
provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability
method, on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax assets and liabilities are recognised
for all deductible or taxable temporary
differences, except:
•
When the deferred tax asset or liability arises
from the initial recognition of goodwill or an
asset or liability in a transaction that is not a
business combination and, at the time of
the transaction, affects neither the
accounting profit nor taxable profit or loss;
•
In respect of deductible or taxable
temporary differences associated with
investments in subsidiaries, associates and
interest in joint arrangements, when the
timing of the reversal of temporary
differences can be controlled and it is
probable that the temporary difference will
not reverse in the foreseeable future, and in
the case of deferred tax assets taxable
profit will be available against which the
temporary differences can be utilised.
The deferred tax liabilities in relation to
investment property is recognised dependent
upon the taxable impact in the relevant
jurisdiction. The Group assumes that the current
measurement at fair value will be recovered
entirely through a sale.
Annual Report 2024
75
In New Zealand, as any capital gain on sale will
generally be exempt from tax, the deferred tax
liability in relation to these assets would
generally be calculated based on the amount
of any tax depreciation recovery.
Deferred tax assets are also recognised relating
to the carry forward of unused tax credits and
unused tax losses to the extent that it is probable
that sufficient taxable profit will be available
against which unused tax credits and unused
tax losses can be utilised.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in
the year when the asset is realised or the liability
is settled, based on the tax rates and laws that
have been enacted or substantially enacted at
the reporting date.
Deferred tax relating to items recognised
outside profit or loss is recognised outside profit
or loss. Deferred tax items are following the
underlying transaction either in OCI or directly in
equity.
Deferred tax assets and liabilities are offset if a
legally enforceable right to offset current tax
assets and liabilities exists and when the
deferred tax balances relate to the same
taxation authority.
Tax consolidation legislation
NSH and its wholly-owned Australian entities are
a tax consolidated group, meaning they are
taxed as a single entity and the deferred tax
assets and liabilities of these entities are set off in
the consolidated financial statements. NSPT
and its wholly owned entities are not eligible to
be part of the NSH tax consolidated group.
Goods and services tax (“GST”)
Revenue, expenses, assets, and liabilities are
recognised net of the amount of GST.
The net amount of GST recoverable from, or
payable to, the taxation authority is included as
part of receivables or payables in the
consolidated statement of financial position.
Commitments and contingencies are disclosed
net of the amount of GST recoverable from, or
payable to, the taxation authority.
Cash flows are included in the consolidated
statement of cash flows on a gross basis. The
GST component of cash flows arising from
investing and financing activities, either
recoverable from, or payable to, the relevant
taxation authority, is classed as part of operating
cash flows.
(g)
Foreign currencies
The Group’s consolidated financial statements
are presented in Australian dollars. For each
entity, the Group determines the functional
currency and items included in the financial
statements of each entity are measured using
that functional currency.
Transactions and balances
Transactions in foreign currencies are initially
recorded by the Group’s entities at their
respective functional currency spot rates at the
date the transaction first qualifies for
recognition. Monetary assets and liabilities
denominated in foreign currencies are
translated at the functional currency spot rates
of exchange at the reporting date.
Differences arising on settlement or translation of
monetary items are recognised in profit or loss
with the exception of monetary items that are
designated as part of the hedge of the Group’s
net investment of a foreign operation.
These are recognised in OCI until the net
investment is disposed of, at which time the
cumulative amount is reclassified to profit or loss.
Tax charges and credits attributable to
exchange differences on those monetary items
are also recorded in other comprehensive
income.
Non-monetary items that are measured at
historical cost in a foreign currency are
translated using the exchange rates at the
dates of the initial transactions. Non-monetary
items measured at fair value in a foreign
currency are translated using the exchange
rates at the date when the fair value is
determined.
The gain or loss arising on translation of non-
monetary items measured at fair value is treated
in line with the recognition of the gain or loss on
the change in fair value of the item (i.e.
translation differences on fair value gain or loss
recognised in OCI or profit or loss are also
recognised in OCI or profit or loss).
Group companies
On consolidation, the assets and liabilities of
foreign operations are translated into Australian
dollars at the exchange rate prevailing at the
reporting date and their statements of profit or
loss are translated at exchange rates prevailing
at the dates of the transactions. The exchange
differences arising on translation for
consolidation are recognised in other
comprehensive income. On disposal of a
foreign operation, the component of OCI
relating to that particular foreign operation is
recognised in profit or loss.
Any goodwill arising on the acquisition of a
foreign operation and any fair value
adjustments to the carrying amounts of assets
and liabilities arising on the acquisition are
treated as assets and liabilities of the foreign
operation and translated at the spot rate of
exchange at the reporting date.
(h)
Business combinations and goodwill
The Group accounts for a transaction as a
business combination if it meets the definition
under AASB 3 Business Combinations, which
requires the assets and liabilities acquired to
constitute a business. A business is defined as an
integrated set of activities and assets that are
capable of being conducted and managed for
the purpose of providing goods or services to
customers, generating investment income (such
as dividends or interest) or generating other
income from ordinary activities.
To determine if there is an integrated set of
activities, the Group conducts an assessment of
minimum business requirements and what
substantive processes have been acquired.
As part of this assessment the Group applies the
amendments to the definition of a business
under AASB 2018-6 including the optional fair
value concentration test. If the concentration
test is passed, the set of activities and assets is
determined not to be a business and therefore,
the transaction is accounted for as an asset
acquisition rather than a business combination.
Business combinations are accounted for using
the acquisition method. The cost of an
acquisition is measured as the aggregate of the
consideration transferred, which is measured at
acquisition date fair value, and the amount of
any non-controlling interests in the acquiree. For
each business combination, the Group elects
whether to measure the non-controlling interests
in the acquiree at fair value or at the
proportionate share of the acquiree’s
identifiable net assets. Acquisition related costs
are expensed as incurred and included in
business combination expenses in the
consolidated statement of profit or loss.
When the Group acquires a business, it assesses
the financial assets and liabilities assumed for
appropriate classification and designation in
accordance with the contractual terms,
economic circumstances and pertinent
conditions as at the acquisition date.
Any contingent consideration to be transferred
by the acquirer will be recognised at fair value
at the acquisition date. Contingent
consideration classified as an asset or liability
that is a financial instrument and within the
scope of AASB 9 Financial Instruments, is
measured at fair value with the changes in fair
value recognised in the consolidated statement
of profit or loss.
Goodwill is initially measured at cost (being the
excess of the aggregate of the consideration
transferred and the amount recognised for non-
controlling interests and any previous interest
held, over the net identifiable assets acquired
and liabilities assumed).
If the fair value of the net assets acquired
exceeds the aggregate consideration
transferred, the Group reassesses whether it has
correctly identified all assets acquired and
liabilities assumed and reviews the procedures
used to measure the amounts to be recognised
at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets
acquired over the aggregate consideration
transferred, then the gain is recognised in profit
or loss.
After initial recognition, goodwill is measured at
cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill
acquired in a business combination is, from the
acquisition date, allocated to each of the
Group’s cash-generating units (“CGUs”) that are
expected to benefit from the combination,
irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU
and part of the operation within that unit is
disposed of, the goodwill associated with the
disposed operation is included in the carrying
amount of the operation when determining the
gain or loss on disposal. Goodwill disposed in
these circumstances is measured based on the
relative values of the disposed operation and
the portion of the CGU retained.
Annual Report 2024
77
(i)
Leases
The Group leases properties which are classified
as investment properties (note 11.4). The Group
also leases office premises and items of plant
and equipment.
The Group assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.
Group as a lessee
The Group applies a single recognition and
measurement approach for all leases, except
for short term leases and leases of low value
assets. The Group recognises lease liabilities
associated with lease payments and right of use
assets representing the right to use the
underlying assets.
Right of use assets
The Group recognises right of use assets at the
commencement date of the lease (i.e. the date
the underlying asset is available for use). Right of
use assets (excluding leasehold investment
properties) are measured at cost, less any
accumulated depreciation and impairment
losses, and adjusted for any remeasurement of
lease liabilities.
The cost of right of use assets includes the
amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made
at or before the commencement date less any
lease incentives received. Right of use assets are
depreciated on a straight line basis over the
shorter of the lease term and the estimated
useful lives of the assets.
Leasehold investment property assets are
measured at fair value as detailed in note 2(p).
If ownership of the leased asset transfers to the
Group at the end of the lease term or the cost
reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset. The right of use assets are
subject to impairment as detailed in note 2(r).
Lease liabilities
At the commencement date of the lease, the
Group recognises lease liabilities measured at
the present value of lease payments to be
made over the lease term. The lease payments
include fixed payments less any lease incentives
receivable, variable lease payments that
depend on an index or a rate, and amounts
expected to be paid under residual value
guarantees.
The lease payments also include the exercise
price of a purchase option reasonably certain
to be exercised by the Group and payments of
penalties for terminating the lease, if the lease
term reflects the Group exercising the option to
terminate.
In calculating the present value of lease
payments, the Group uses its incremental
borrowing rate at the lease commencement
date when the interest rate implicit in the lease
is not readily determinable.
After the commencement date, the amount of
lease liabilities are increased to reflect the
accretion of interest and reduced for the lease
payments made. In addition, the carrying
amount of lease liabilities are remeasured if
there is a modification, a change in the lease
term, a change in the lease payments (e.g.
changes to future payments resulting from a
change in an index or rate used to determine
such lease payments) or a change in the
assessment of an option to purchase the
underlying asset or to extend an existing lease
term.
Short term leases and leases of low value assets
The Group applies the short term lease
recognition exemption to its short term leases of
equipment (i.e. those leases that have a lease
term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease of low
value assets recognition exemption to leases of
office equipment that are considered to be low
value. Lease payments on short term leases and
leases of low value assets are recognised on a
straight line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer
substantially all the risks and rewards incidental
to ownership of an asset are classified as
operating leases. Rental income arising is
accounted for on a straight line basis over the
lease terms and is included in revenue in the
consolidated statement of profit or loss due to its
operating nature.
Initial direct costs incurred in negotiating and
arranging an operating lease are added to the
carrying amount of the leased asset and
recognised over the lease term on the same
basis as rental income. Contingent rents are
recognised as revenue in the period in which
they are earned.
(j)
Cash and cash equivalents
Cash and cash equivalents in the consolidated
statement of financial position comprise cash at
bank, cash on hand and term deposits that are
readily convertible to known amounts of cash
and which are subject to an insignificant risk of
change in value.
For the purposes of the consolidated statement
of cash flows, cash and cash equivalents consist
of cash and term deposits as defined above.
(k)
Financial assets
Initial recognition and measurement
At initial recognition, financial assets are
classified and measured at amortised cost, fair
value through OCI, or fair value through profit or
loss.
The classification of financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics and the
Group’s business model for managing them. The
Group initially measures a financial asset at its
fair value plus transaction costs.
Trade receivables that do not contain a
significant financing component or for which
the Group has applied the practical expedient
are measured at the transaction price
determined under AASB 15 Revenue from
Contracts with Customers.
In order for a financial asset to be classified and
measured at amortised cost or fair value
through OCI, it needs to give rise to cash flows
that are solely payments of principal and
interest on the principal amount outstanding.
This assessment is performed at an instrument
level. Financial assets with cash flows that are
not solely payments of principal and interest
(“SPPI”) are classified and measured at fair
value through profit or loss, irrespective of the
business model.
The Group’s business model for managing
financial assets refers to how it manages its
financial assets in order to generate cash flows.
The model determines whether cash flows will
result from collecting contractual cash flows,
selling the financial assets, or both.
Financial assets classified and measured at
amortised cost are held with the objective of
collecting contractual cash flows while financial
assets classified and measured at fair value
through OCI are held with the objective of both
holding to collect contractual cash flows and
selling the asset.
Subsequent measurement
For purposes of subsequent measurement,
financial assets are classified in three categories:
•
Financial assets at amortised cost (debt
instruments);
•
Financial assets at fair value through OCI
with recycling of cumulative gains and
losses; and
•
Financial assets at fair value through profit or
loss.
Financial assets at amortised cost
Financial assets held at amortised cost are
subsequently measured using the effective
interest method and are subject to impairment.
Gains and losses are recognised in profit or loss
when the asset is derecognised, modified or
impaired. The Group’s financial assets at
amortised cost include trade and other
receivables, and deposits.
Financial assets at fair value through Other
Comprehensive Income
For debt instruments at fair value through OCI,
interest income, foreign exchange revaluation
and impairment losses or reversals are
recognised in the consolidated statement of
profit or loss and computed in the same manner
as financial assets measured at amortised cost.
The remaining fair value changes are
recognised in other comprehensive income.
Upon derecognition, the cumulative fair value
change recognised in OCI is recycled to profit
or loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
are carried in the consolidated statement of
financial position at fair value with net changes
in fair value recognised in the consolidated
statement of profit or loss.
This category includes derivative instruments
which the Group has not designated as a
hedged instrument.
Annual Report 2024
79
A derivative embedded in a hybrid contract,
with a financial liability or non-financial host, is
separated from the host and accounted for as
a separate derivative if:
•
The economic characteristics and risks are
not closely related to the host;
•
A separate instrument with the same terms
as the embedded derivative would meet
the definition of a derivative; and
•
The hybrid contract is not measured at fair
value through profit or loss.
Embedded derivatives are measured at fair
value with changes in fair value recognised in
profit or loss.
Reassessment only occurs if there is either a
change in the terms of the contract that
significantly modifies the cash flows that would
otherwise be required or a reclassification of a
financial asset out of the fair value through profit
or loss category.
Derecognition
Financial assets are primarily derecognised
when:
•
The rights to receive cash flows from the
assets have expired; or
•
The Group has transferred its rights to
receive cash flows from the asset or has
assumed an obligation to pay the received
cash flows in full without material delay to a
third party under a ‘pass-through’
arrangement; and either;
(a) the Group has transferred substantially
all the risks and rewards of the asset; or
(b) the Group has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.
When the Group has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if,
and to what extent, it has retained the risks and
rewards of ownership.
When it has neither transferred nor retained
substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the
Group continues to recognise the transferred
asset to the extent of its continuing involvement.
In that case, the Group also recognises an
associated liability. The transferred asset and the
associated liability are measured on a basis that
reflects the rights and obligations that the Group
has retained.
Impairment
The Group uses AASB 9 Financial Instruments’
expected loss approach with a forward-looking
expected credit loss (“ECL”) methodology to
recognise an ECL provision for all debt
instruments not held at fair value through profit
or loss. ECLs are based on the difference
between the contractual cash flows due in
accordance with the contract and all the cash
flows that the Group expects to receive,
discounted at an approximation of the original
effective interest rate. The expected cash flows
will include cash flows from the sale of collateral
held or other credit enhancements that are
integral to the contractual terms.
ECLs are recognised in two stages. For credit
exposures for which there has not been a
significant increase in credit risk since initial
recognition, ECLs are provided for credit losses
that result from default events that are possible
within the next 12-months. For those credit
exposures for which there has been a significant
increase in credit risk since initial recognition, a
loss allowance is required for credit losses
expected over the remaining life of the
exposure, irrespective of the timing of the
default.
For trade receivables and contract assets, the
Group applies a simplified approach in
calculating ECLs. Therefore, the Group does not
track changes in credit risk, but instead
recognises a loss allowance based on lifetime
ECLs at each reporting date. The Group assesses
this allowance based on its historical credit loss
experience, adjusted for forward-looking factors
specific to the debtors.
The Group considers a financial asset to be at
risk of default when contractual payments are
90 days past due. However, in certain cases, the
Group may also consider a financial asset to be
in default when internal or external information
indicates that the Group is unlikely to receive
the outstanding contractual amounts in full
before taking into account any credit
enhancements held by the Group.
A financial asset is written off when there is no
reasonable expectation of recovering the
contractual cash flows.
(l)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified at initial
recognition as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as
hedging instruments in an effective hedge.
All financial liabilities are recognised initially at
fair value and, in the case of borrowings and
payables, net of directly attributable transaction
costs. The Group’s financial liabilities include
trade and other payables, loans and
borrowings, and derivative financial instruments.
Subsequent measurement
Financial liabilities at fair value through profit or
loss
This category includes financial liabilities held for
trading and financial liabilities designated upon
initial recognition at fair value through profit or
loss.
Financial liabilities are classified as held for
trading if they are incurred for the purpose of
repurchasing in the near term. This category also
includes derivative financial instruments entered
into by the Group that are not designated as
hedging instruments in hedge relationships as
defined by AASB 9 Financial Instruments’.
Separated embedded derivatives are also
classified as held for trading unless they are
designated as effective hedging instruments.
Gains or losses on liabilities held for trading are
recognised in the consolidated statement of
profit or loss.
Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated at the initial date of recognition,
and only if the criteria in AASB 9 are satisfied. The
Group has not designated any financial liability
as at fair value through profit or loss.
Loans and borrowings
This is the category most relevant to the Group.
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate
(“EIR”) method. Gains and losses are recognised
in profit or loss when the liabilities are
derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance
costs in the consolidated statement of profit or
loss.
Borrowing costs are recognised as an expense
when incurred unless they relate to the
acquisition, construction or production of a
qualifying asset or to upfront borrowing
establishment and arrangement costs, which
are deferred and amortised as an expense over
the life of the facility. Borrowing costs incurred
for the construction of any qualifying asset are
capitalised during the period of time that is
required to complete the asset for its intended
use or sale.
Derecognition
A financial liability is derecognised when the
obligation under the liability is discharged,
cancelled or expired. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, this is treated as the derecognition of
the original liability and the recognition of a new
liability. The difference in the respective carrying
amounts is recognised in the consolidated
statement of profit or loss.
Borrowings are classified as current liabilities
unless the group has an unconditional right to
defer settlement of the liability for at least 12
months after the reporting period.
(m)
Derivative financial instruments and
hedge accounting
Initial recognition and measurement
The Group uses derivative financial instruments,
such as interest rate swaps, interest rate caps,
interest rate swaptions, and a net investment
hedge to hedge its foreign currency and interest
rate risks.
Derivatives are initially recognised at fair value
on the date a derivative contract is entered into
and are subsequently remeasured to fair value
at the end of each reporting period. Derivatives
are carried as financial assets when the fair
value is positive and as financial liabilities when
the fair value is negative.
Annual Report 2024
81
The accounting for subsequent changes in fair
value depends on whether the derivative is
designated as a hedging instrument, and if so,
the nature of the item being hedged.
For the purpose of hedge accounting, hedges
are classified as:
•
Fair value hedges when hedging the
exposure to changes in the fair value of a
recognised asset or liability or an
unrecognised firm commitment;
•
Cash flow hedges when hedging the
exposure to variability in cash flows that is
either attributable to a particular risk
associated with a recognised asset or
liability or a highly probable forecast
transaction or the foreign currency risk in an
unrecognised firm commitment; or
•
Hedges of a net investment in a foreign
operation.
At the inception of a hedge relationship, the
Group formally designates and documents the
hedge relationship to which it wishes to apply
hedge accounting and the risk management
objective and strategy for undertaking the
hedge.
The documentation includes identification of
the hedging instrument, the hedged item, the
nature of the risk being hedged and how the
Group will assess whether the hedging
relationship meets the hedge effectiveness
requirements (including the analysis of sources
of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship
qualifies for hedge accounting if it meets all of
the following effectiveness requirements:
•
There is ‘an economic relationship’ between
the hedged item and the hedging
instrument;
•
The effect of credit risk does not ‘dominate
the value changes’ that result from that
economic relationship; and
•
The hedge ratio of the hedging relationship
is the same as that resulting from the
quantity of the hedged item that the Group
actually hedges and the quantity of the
hedging instrument that the Group actually
uses to hedge that quantity of hedged item.
Hedges that meet all the qualifying criteria for
hedge accounting are accounted for, as
described below:
Cash flow hedge
The effective portion of the gain or loss on the
hedging instrument is recognised in OCI in the
cash flow hedge reserve, while any ineffective
portion is recognised immediately in the
statement of profit or loss. The cash flow hedge
reserve is adjusted to the lower of the
cumulative gain or loss on the hedging
instrument and the cumulative change in fair
value of the hedged item.
The Group uses interest rate swap contracts as
hedges of its exposure to the risk of changes in
market interest rates. The ineffective portion
relating to these is recognised as other
operating income or expenses.
The Group designates only the spot element of
these contracts as a hedging instrument. The
forward element is recognised in OCI and
accumulated in a separate component of
equity within the hedging reserve.
The amounts accumulated in OCI are
accounted for depending on the nature of the
underlying hedged transaction. These amounts
are reclassified to profit or loss as a
reclassification adjustment in the same period or
periods during which the hedged cash flows
affect profit or loss.
If cash flow hedge accounting is discontinued,
the amount that has been accumulated in OCI
must remain in OCI if the hedged future cash
flows are still expected to occur.
Otherwise, the amount will be immediately
reclassified to profit or loss as a reclassification
adjustment. After discontinuation, once the
hedged cash flow occurs, any accumulated
amount remaining in OCI must be accounted
for depending on the nature of the underlying
transaction.
Hedges of a net investment
Hedges of a net investment in a foreign
operation, including a hedge of a monetary
item that is accounted for as part of the net
investment, are accounted for in a similar way
to cash flow hedges.
Gains or losses on the hedging instrument
relating to the effective portion of the hedge
are recognised as OCI while any gains or losses
relating to the ineffective portion are
recognised in the consolidated statement of
profit or loss. On disposal of the foreign
operation, the cumulative value of any such
gains or losses recorded in equity is transferred
to the consolidated statement of profit or loss.
(n)
Assets held for sale
The Group classifies non-current assets and
disposal groups as held for sale if their carrying
amounts will be recovered principally through a
sale transaction rather than through continuing
use. Non-current assets and disposal groups
classified as held for sale are measured at the
lower of their carrying amount and fair value less
costs to sell. Costs to sell are the incremental
costs directly attributable to the disposal of an
asset (disposal group), excluding finance costs
and income tax expense.
The criteria for held for sale classification is met
only when the sale is highly probable and the
asset or disposal group is available for
immediate sale in its present condition. Actions
required to complete the sale should indicate
that it is unlikely that significant changes to the
sale will be made or that the decision to sell will
be withdrawn. Management must be
committed to the plan to sell the asset and the
sale expected to be completed within one year
from the date of the classification.
Property, plant and equipment and intangible
assets are not depreciated or amortised once
classified as held for sale.
Assets and liabilities classified as held for sale are
presented separately as current items in the
statement of financial position. A disposal group
qualifies as a discontinued operation if it is a
component of an entity that either has been
disposed of, or is classified as held for sale, and:
•
Represents a separate major line of
business or geographical area of
operations;
•
Is part of a single co-ordinated plan to
dispose of a separate major line of
business; or
•
Is a subsidiary acquired exclusively with a
view to resale.
(o)
Investment properties
Freehold investment properties
Investment properties are measured initially at
cost, including transaction costs. Subsequent to
initial recognition, freehold investment properties
are stated at fair value, which reflects market
conditions at the reporting date.
Gains or losses arising from changes in the fair
values of investment properties are included in
profit or loss in the period in which they arise.
Investment properties under construction are
held at cumulative cost of construction as an
estimate for fair value. This serves as the most
appropriate basis to estimate fair value
particularly during the early stages of
development and is adjusted once risks
associated with the completion of development
and ultimate operations of the property are
determined to be insignificant.
Fair values are determined by a combination of
external valuations and internal valuations. The
external valuations are performed by an
accredited independent valuer. Investment
properties are independently valued on a
rotational basis every three years, unless a more
frequent valuation cycle is required.
For properties subject to an external
independent valuation report, management
verify all major inputs to the valuation and
review the results with the independent valuer.
The internal valuations are reviewed by the NSH
Group Board. The valuations are determined
using the same techniques and similar estimates
to those applied by the independent valuer.
In some transactions involving the purchase of a
group of assets, the value assessed by NSR,
being the purchase price paid, may exceed the
sum of the independent property valuations
which are undertaken on a stand-alone
property basis. This excess in value represents a
portfolio premium.
Any portfolio premium attributable to the
investment property assets acquired in
transactions accounted for as an asset
acquisition is allocated to the individual
identifiable assets acquired within each portfolio
on the relative fair value basis at the date of
acquisition.
Investment properties are derecognised either
when they have been disposed of or when they
are permanently withdrawn from use and no
future economic benefit is expected from their
disposal. The difference between the net
disposal proceeds and the carrying amount of
the asset is recognised in the consolidated
statement of profit or loss in the period of
derecognition. Transfers are made to or from
investment property only when there is a
change in use.
Leasehold investment properties
The Group, as lessee, has properties that under
AASB 140 Investment Property, qualify for
Annual Report 2024
83
recognition as investment properties. Under this
treatment, for each property, the present value
of lease payments to be made over the lease
term is determined and carried as a lease
liability and the fair value of the lease to the NSH
Group is recorded each period as investment
property.
Gains or losses arising from changes in the fair
values of investment properties are included in
profit or loss in the period in which they arise,
including the corresponding tax effect. Fair
values are determined using the same valuation
process applied to freehold investment
properties.
Lease payments are accounted for under AASB
16 Leases, see note 2(i). Lease payments are
allocated between the principal component of
the lease liability and interest expense to
achieve a constant rate of interest on the
remaining balance of the liability. Interest
expense is recognised in finance costs in the
consolidated statement of profit or loss and in
payment of lease liabilities within the
consolidated statement of cash flows.
(p)
Intangible assets
Intangible assets acquired separately are
measured on initial recognition at cost. The cost
of intangible assets acquired in a business
combination is their fair value at the date of
acquisition. Following initial recognition,
intangible assets are carried at cost less any
accumulated amortisation and impairment
losses. Internally generated intangibles,
excluding capitalised development costs, are
not capitalised and the related expenditure is
reflected in profit or loss in the period in which
the expenditure is incurred.
The useful lives of intangible assets are assessed
as either finite or indefinite. Intangible assets with
finite lives are amortised over the useful
economic life and assessed for impairment
whenever there is an indication that the
intangible asset may be impaired. The
amortisation period and the amortisation
method for an intangible asset with a finite
useful life are reviewed at the end of each
reporting period.
Changes in the expected useful life or the
expected pattern of consumption of future
economic benefits embodied in the asset are
considered to modify the amortisation period or
method, as appropriate. These are treated as
changes in accounting estimates and adjusted
on a prospective basis. The amortisation
expense on intangible assets with finite lives is
recognised in the consolidated statement of
profit or loss in other operational expenses.
Intangible assets with indefinite useful lives, such
as goodwill, are not amortised but are tested for
impairment at each reporting period, either
individually or at the CGU level. The assessment
of indefinite life is reviewed at each reporting
period to determine whether the indefinite life
continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are
recognised in the consolidated statement of
profit or loss when the asset is derecognised.
Research costs are expensed as incurred.
Development expenditure on an individual
project is recognised as an intangible asset
when the Group can demonstrate:
•
The technical feasibility of completing the
intangible asset so that the asset will be
available for use or sale;
•
Its intention to complete and its ability and
intention to use or sell the asset;
•
How the asset will generate future
economic benefits;
•
The availability of resources to complete the
asset; and
•
The ability to measure reliably the
expenditure during development.
Following initial recognition of the development
expenditure as an asset, the asset is carried at
cost less any accumulated amortisation and
impairment losses. Amortisation of the asset
begins when development is complete and the
asset is available for use. It is amortised over the
period of expected future benefit. Amortisation
is recorded in other operational expenses.
During the period of development, the asset is
tested annually for impairment.
(q)
Impairment of assets
Goodwill and intangible assets that have an
indefinite useful life are not subject to
amortisation and are tested annually for
impairment or more frequently if events or
changes in circumstances indicate that they
might be impaired. Other assets are tested for
impairment whenever events or changes in
circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less
costs of disposal and value in use.
For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there
are separately identifiable cash inflows which
are largely independent of the cash inflows from
other assets or groups of assets (CGU’s). Non-
financial assets other than goodwill that have
been impaired in previous periods are reviewed
for possible reversal of the impairment at the
end of each reporting period.
(r)
Provisions
Provisions are recognised when the Group has a
present obligation (legal or constructive) as a
result of a past event, it is probable that an
outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of the
amount of the obligation.
When the Group expects some or all of a
provision to be reimbursed, the reimbursement is
recognised as a separate asset, but only when
the reimbursement is virtually certain.
Provisions are measured at the present value of
management’s best estimate of the
expenditure required to settle the present
obligation at the end of the reporting period.
The discount rate used to determine the present
value is a pre-tax rate that reflects current
market assessments of the time value of money
and the risks specific to the liability. The increase
in the provision due to the passage of time is
recognised as interest expense.
In accordance with its lease agreements, the
Group must restore the leased premises in a
number of leasehold premises to their original
condition at lease expiry. A provision has been
recognised for the obligation to remove
leasehold improvements from the leased
premises (note 11.7).
(s)
Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-
monetary benefits, and accumulating annual
leave which are expected to be settled within
12 months of the reporting date are recognised
in respect of employees' services up to the
reporting date. They are measured at the
amounts expected to be paid when the
liabilities are settled.
Other long-term employee benefits obligations
The Group does not expect its long service
leave benefits to be settled wholly within 12
months of each reporting date. The Group
recognises a liability for long service leave
measured as the present value of expected
future payments to be made in respect of
services provided by employees up to the
reporting date using the projected unit credit
method. Consideration is given to previous
experience of employee departures, and
periods of service.
Expected future payments are discounted using
market yields at the reporting date on the
applicable corporate bonds with terms to
maturity and currencies that match, as closely
as possible, the estimated future cash outflows.
Retirement benefit obligations
All employees can direct the Group to make
contributions to a defined contribution plan of
their choice. Contributions to defined
contribution superannuation funds are
recognised as an expense as they become
payable.
Equity-settled transactions
The cost of equity-settled transactions is
determined by the fair value at the date when
the grant is made using an appropriate
valuation model, further details of which are
provided in note 21.
That cost is recognised in employee expenses,
together with a corresponding increase in equity
(share-based payment reserve within other
reserves), over the period in which the service
and, where applicable, the performance
conditions are fulfilled (the vesting period).
The cumulative expense recognised for equity-
settled transactions at each reporting date until
the vesting date reflects the extent to which the
vesting period has expired and the Group’s best
estimate of the number of equity instruments
that will ultimately vest. The expense or credit in
the consolidated statement of profit or loss for a
Annual Report 2024
85
period represents the movement in cumulative
expense recognised as at the beginning and
end of that period.
Service and non-market performance
conditions are not taken into account when
determining the fair value of awards at grant
date, but the likelihood of the conditions being
met is assessed as part of the Group’s best
estimate of the number of equity instruments
that will ultimately vest. Market performance
conditions are reflected within the grant date
fair value.
Any other conditions attached to an award, but
without an associated service requirement, are
considered to be non-vesting conditions. Non-
vesting conditions are reflected in the fair value
of an award and lead to an immediate
expensing of an award unless there are also
service and/or performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market
performance and/or service conditions have
not been met. Where awards include a market
or non-vesting condition, the transactions are
treated as vested irrespective of whether the
market or non-vesting condition is satisfied,
provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are
modified, the minimum expense recognised is
the grant date fair value of the unmodified
award, provided the original vesting terms of the
award are met.
An additional expense, measured as at the
date of modification, is recognised for any
modification that increases the total fair value of
the share-based payment transaction, or is
otherwise beneficial to the employee.
Where an award is cancelled by the entity or by
the counterparty, any remaining element of the
fair value of the award is expensed immediately
through profit or loss. The dilutive effect of
outstanding performance rights is reflected as
additional share dilution in the computation of
diluted earnings per share (see note 20).
(t)
Contributed equity
Stapled securities are classified as equity. Issued
and paid up capital is recognised at the fair
value of the consideration received by the
Group. Incremental costs directly attributable to
the issue of securities are shown in equity as a
deduction, net of tax, from the proceeds.
(u)
Dividends and distributions to
securityholders
The Group recognises a liability to make cash or
non-cash distributions to equity holders when
the distribution is authorised and is no longer at
the discretion of the Company or the
Responsible Entity. A corresponding amount is
recognised directly in equity.
Non-cash distributions are measured at the fair
value of the assets to be distributed with fair
value remeasurement recognised directly in
equity. Any difference between the carrying
amount of the liability and the carrying amount
of the assets distributed is recognised in the
consolidated statement of profit or loss.
(v)
Rounding of amounts
The Group is of a kind referred to in ASIC
Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191, relating to the
‘rounding off’ of amounts in the financial
statements. Amounts in the financial statements
have been rounded off to the nearest thousand
dollars, or in certain cases, the nearest dollar.
(w)
Parent entity financial information
The financial information for the parent entity,
NSH, disclosed in note 23 has been prepared on
the same basis as the consolidated financial
statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at
cost in the financial statements of NSH.
Tax consolidation legislation
NSH, the head entity, and its wholly-owned
subsidiaries are a tax consolidated group. This
results in them being taxed as a single entity.
NSH recognises the current tax liabilities or assets
and the deferred tax assets and liabilities arising
from all tax consolidated group members. This
includes any unused tax losses and unused tax
credits arising from members of the tax
consolidated group.
(x)
Fair value measurement
The Group measures financial instruments, such
as derivatives, and non-financial assets such as
investment properties, at fair value at each
balance sheet date. Fair value is the price that
would be received to sell an asset or paid to
transfer a liability in an orderly transaction
between market participants at the
measurement date. The fair value measurement
is based on the presumption that the transaction
to sell the asset or transfer the liability takes
place either:
•
In the principal market for the asset or
liability; or
•
In the absence of a principal market, in the
most advantageous market for the asset or
liability.
The principal or the most advantageous market
must be accessible by the group.
The fair value of an asset or liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest. A fair value
measurement of a non-financial asset takes into
account a market participant's ability to
generate economic benefits by using the asset
in its highest and best use or by selling it to
another market participant.
The Group uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data is available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial
statements are categorised within the fair value
hierarchy, based on the lowest level input that is
significant to the fair value measurement as a
whole:
•
Level 1 — Quoted (unadjusted) market
prices in active markets for identical assets
or liabilities
•
Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable
•
Level 3 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is unobservable
For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Group determines whether transfers have
occurred between levels in the hierarchy by
reassessing categorisation (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.
For further details on fair value measurement
refer to notes 8 and notes 10.8.
3.
SIGNIFICANT ACCOUNTING
JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
The preparation of the Group’s consolidated
financial statements requires management to
make judgements, estimates and assumptions
that affect the reported amounts of revenues,
expenses, assets and liabilities, and the
accompanying disclosures. Uncertainty about
these assumptions and estimates could result in
outcomes that require a material adjustment to
the carrying amount of the affected assets or
liabilities in future periods.
Other disclosures relating to the Group’s
exposure to risks and uncertainties include:
•
Capital management (note 17)
•
Financial instruments risk management and
policies (notes 10.8, 16)
•
Sensitivity analyses disclosures (notes 11.8,
16).
Judgements
In the process of applying the Group’s
accounting policies, management has made
the following judgements which have a
significant effect on the amounts recognised in
the consolidated financial statements.
Significant judgements
Acquisition of storage centre assets
For the acquisition of storage centres, the
Group’s policy is to review the nature of the
transaction and assess if the transaction should
be accounted for under AASB 3 Business
Combinations or AASB 140 Investment Properties
as a purchase of investment property.
The key assessment is whether the transaction
constitutes a purchase of a ‘business’, and if so,
it will be accounted for under AASB 3. If it is
determined that the transaction does not meet
this definition, the transaction is accounted for
as a purchase of an asset under AASB 140, as an
acquisition of a storage centre(s) held for rental
return and capital appreciation.
For the years ended 30 June 2024 and 30 June
2023, the Group has assessed that all of its
storage centre acquisitions do not meet the
definitions set out in AASB 3 and are therefore
Annual Report 2024
87
accounted for as purchases of investment
property per AASB 140.
Determining the lease term of contracts with
renewal and termination options – Group as
lessee
The Group determines the lease term as the
non-cancellable term of the lease, together with
any periods covered by an option to extend the
lease if it is reasonably certain to be exercised,
or any periods covered by an option to
terminate the lease, if it is reasonably certain not
to be exercised.
The Group has several lease contracts that
include extension and termination options. The
Group applies judgement in evaluating whether
it is reasonably certain to exercise the option to
renew or terminate the lease considering factors
that create an economic incentive to exercise
either the renewal or termination clause.
The Group has included the extension period as
part of the lease term for leases of investment
property where the option is expected to be
exercised at the next renewal period. The
renewal periods for leases with non-cancellable
periods in excess of three years are not included
as part of the lease term as these are not
certain to be exercised.
The Group also has the option to extend its lease
of head office premises. The renewal period for
this lease is not included as part of the lease
term as there is no reasonable certainty that this
will be exercised at the end of the initial
contractual term.
Estimates and assumptions
The key assumptions at the reporting date
concerning the future, and other key sources of
estimation uncertainty, that have significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are described below.
Assumptions and estimates are based on
parameters available when the consolidated
financial statements were prepared. Existing
circumstances and assumptions about the
future developments may change due to
market changes or circumstances arising
beyond the Group’s control. Such changes are
reflected in the assumptions when they occur.
Revaluation of investment properties
The Group carries its investment properties at fair
value, with changes in fair value being
recognised in the consolidated statement of
profit or loss under fair value adjustments. Fair
values of individual properties are determined
by a combination of external independent
valuations assessed on a rotational basis and
internal valuations, determined using the same
techniques and similar estimates to those
applied by the independent valuer.
The capitalisation of net operating income
approach to investment property valuations is
applied by both the external and internal
valuations. This is a commonly applied valuation
method for storage facilities within Australia and
New Zealand. This methodology is generally
used in sectors where revenue is earned from
short term rentals or an operating activity as
opposed to a fixed long-term rental lease.
The Group calculates net operating income
before depreciation, amortisation, interest, tax,
and capital expenditure deductions for both
passive income (current trading income) and
potential income (additional income at
sustainable occupancy).
Potential income is subject to a higher degree
of risk, reflected in a higher secondary
capitalisation rate. The approach of
disaggregating a property’s net operating
income between current passive income and
future potential income allows appropriate risk
adjusted capitalisation rates to be applied to
each income stream.
The Group disaggregates primary and
secondary capitalisation rates to provide more
transparency to the valuation process. This gives
visibility over the separate rates applied to
passive income from current trading and
potential income, and the resultant differing risk
profile which exists between these income
categories.
The key assumptions used to determine the fair
value of the properties and the sensitivity
analyses are provided in note 11.8.
Impairment of non-financial assets – goodwill
An impairment exists when the carrying value of
an asset or CGU exceeds its recoverable
amount, which is the higher of its fair value less
costs to sell and its value in use.
82
The goodwill on the Group’s balance sheet is
allocated to the NSR listed group as one single
CGU. This reflects the fact that as a portfolio of
storage centre investment properties, the whole
of NSR is considered to be one business segment
and that goodwill is beneficial to the entire
Group. This aligns with how NSR’s chief
operating decision maker monitors and
structures the performance of the Group and is
consistent with the Group’s assessment of
operating segments under AASB 8 Operating
Segments.
The recoverable amount of the CGU has been
determined based on a fair value less cost of
disposal calculation. The assumptions used in
the estimations of the recoverable amount and
the carrying amount of goodwill are discussed in
note 11.5.
Annual Report 2024
89
4.
SEGMENT INFORMATION
During the 2024 and 2023 financial years, the Group operated wholly within one business segment,
being the operation and management of storage centres in Australia and New Zealand.
The Managing Director is the Group’s chief operating decision maker and monitors the operating results
on a portfolio wide basis. Monthly management reports are evaluated based upon the overall
performance of NSR consistent with the presentation within the consolidated financial statements. The
Group’s financing (including finance costs and interest income) is managed on a Group basis and is
not allocated to operating segments.
The operating results presented in the consolidated statement of profit or loss represent the same
segment information as reported in internal management information.
Geographic information
2024
2023
$'000
$'000
Revenue from external customers
Australia
317,991
295,253
New Zealand
35,158
32,129
Total
353,149
327,382
The revenue information above excludes interest income and is based on the location of storage
centres.
2024
2023
$'000
$'000
Non-current operating assets
Australia
4,314,981
3,917,271
New Zealand
522,678
476,157
Total
4,837,659
4,393,428
Non-current assets for this purpose consists of property, plant and equipment, investment properties,
right of use assets, and intangible assets (excluding goodwill).
The Group has no individual customer which represents greater than 10% of total revenue.
5.
REVENUE FROM CONTRACTS WITH CUSTOMERS
2024
2023
$'000
$'000
Revenue from contracts with customers
Sale of goods and services
6,945
7,396
Agency fees and commissions
6,765
5,951
Design and development fees
4,292
468
Management fees
2,039
832
Total revenue from contracts with customers
20,041
14,647
6.
EXPENSES
7.
INTEREST INCOME AND FINANCE COSTS
8.
FAIR VALUE ADJUSTMENTS
2024
$'000
2023
$'000
Gains / (losses) for the year in profit or loss
Realised losses – lease diminution of leasehold property
(9,715)
(8,361)
Unrealised gains associated with investment property
93,601
193,949
Movement in provisions presented in fair value adjustments
572
369
Change in fair value of derivatives recognised through profit or loss
2,244
2,054
86,702
188,011
2024
2023
Notes
$'000
$'000
Other operational expenses
Professional fees
4,127
3,817
Cost of packaging and other products sold
2,955
3,877
Bank charges
1,988
2,001
Motor vehicle expenses
499
540
Depreciation
1,736
2,054
Amortisation of intangible assets
11.5
997
775
Travel and entertainment costs
2,035
1,883
Other expenses
3,008
2,888
Total other operational expenses
17,345
17,835
Employee expenses
Salaries and wages
47,268
45,911
Post-employment benefits
4,180
3,907
Share-based payments
21
1,224
1,504
Payroll tax
2,552
2,308
Other employee costs
4,475
4,533
Total employee expenses
59,699
58,163
2024
2023
$'000
$'000
Interest income
Bank interest
1,642
2,186
Interest income from related parties
579
468
Total interest income
2,221
2,654
Finance costs
Interest on borrowings
44,117
37,617
Reclassification from cash flow hedge reserve to
consolidated statement of profit or loss
15
3,481
5,359
Interest on lease liabilities relating to investment property
4,423
4,875
Interest on other lease liabilities
105
109
Total finance costs
52,126
47,960
Annual Report 2024
91
9.
INCOME TAX
NSPT is a ‘flow through’ entity for Australian income tax purposes and is an Attribution Managed
Investment Trust, such that the determined tax components of NSPT will be taxable in the hands of
unitholders on an attribution basis. NSPT’s subsidiary, National Storage New Zealand Property Trust
(“NSNZPT”), is an Australian registered trust which owns investment property in New Zealand. For New
Zealand tax purposes NSNZPT is classed as a unit trust and is subject to New Zealand income tax at a
rate of 28%.
The major components of income tax expense for the years ended 30 June 2024 and 30 June 2023 are:
2024
2023
Notes
$'000
$'000
Consolidated statement of profit or loss
Current tax
9,833
13,364
Deferred tax
1,564
1,272
Adjustment in relation to prior periods
74
(819)
Total income tax expense
11,471
13,817
Deferred tax relating to items recognised in statement of changes
in equity
Cost of issuing share capital
(2)
(124)
Reconciliation of tax expense and accounting profit multiplied by
Australia’s domestic tax rate for 2024 and 2023:
Profit before tax
241,742
334,217
Deduct profit before tax from trusts owning Australian properties
(197,958)
(269,180)
Accounting profit before income tax
43,784
65,037
Tax at the Australian tax rate of 30% (2023: 30%)
13,135
19,511
Non-deductible / assessable amounts
1,419
1,360
Deductible / non-assessable amounts
(3,020)
(5,796)
Adjustments in respect of previous years
(2)
(1,227)
Effect of lower tax rates in New Zealand
(32)
(266)
Tax losses not recognised
(29)
235
Income tax expense
11,471
13,817
The Group offsets tax assets and liabilities if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax asset and deferred tax liabilities relate to income taxes
levied by the same tax authority.
The Group has the following gross tax losses which arose in Australia and New Zealand:
2024
2023
$’000
$’000
Recognised group tax losses
10,914
818
Unrecognised group tax losses
698
805
Total
11,612
1,623
For the year ended 30 June 2024, all recognised tax losses relate to NSNZPT and are available for
offsetting against future taxable profits in New Zealand. Unrecognised group tax losses relate to
Australian losses incurred by National Storage Finance Pty Ltd.
2024
2023
$'000
$'000
Deferred tax expense included in income tax expense comprises:
Increase in deferred tax assets
(70,921)
(50,454)
Increase in deferred tax liabilities
69,550
52,051
Movement of deferred tax asset on carry forward losses
2,828
(389)
Exchange variations
105
(60)
Movement in deferred tax asset recognised in consolidated
statement of changes in equity
2
124
Total deferred tax expense
1,564
1,272
Deferred tax assets and liabilities
Deferred tax assets
The balance comprises temporary differences attributable to:
Lease liabilities
529,666
461,528
Employee benefits
2,138
1,907
Accrued expenses
1,875
1,908
Carry forward losses
3,056
229
Make good provisions
2,232
2,391
Revaluation of investment property assets
398
645
Other
1,348
1,184
Total deferred tax assets
540,713
469,792
Deferred tax liabilities
The balance comprises temporary differences attributable to:
Right of use assets
981
1,301
Trade and other receivables
2
16
Intangibles
108
141
Revaluations of investment properties
535,276
465,351
Unrealised foreign exchange losses
7
15
Total deferred tax liabilities
536,374
466,824
Net deferred tax assets
4,339
2,968
Reconciliation to consolidated statement of financial position
Deferred tax assets
10,995
9,176
Deferred tax liabilities
(6,656)
(6,208)
Net deferred tax assets
4,339
2,968
Annual Report 2024
93
10.
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Group holds the following financial instruments:
2024
2023
Notes
$'000
$'000
Financial assets
At amortised cost
Cash and cash equivalents
10.1
55,245
67,330
Trade and other receivables
10.2
20,496
17,489
Deposits
10.3
6,944
8,876
82,685
93,695
Interest rate derivatives measured at fair value
Designated as hedging instruments
10.3
7,840
16,483
Not designated as hedging instruments
10.3
18,573
3,343
Total financial assets
109,098
113,521
Financial liabilities
Trade and other payables
10.4
41,664
31,400
Borrowings
10.5
1,399,208
946,958
Lease liabilities
10.7
93,746
101,371
1,534,618
1,079,729
Interest rate derivatives measured at fair value
Not designated as hedging instruments
10.6
14,274
1,289
Total financial liabilities
1,548,892
1,081,018
The Group’s approach to financial risk management is discussed in note 16. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount of each class of financial asset
mentioned above.
Derivatives designated as hedging instruments reflect the change in fair value of interest rate
derivatives, designated as cash flow hedges. Derivatives not designated as hedging instruments reflect
the change in fair value of interest derivatives that are not designated in hedging relationships, but are,
nevertheless, intended to manage the risk associated with interest rate fluctuations.
All derivatives are presented as current assets or liabilities if they are expected to be settled within 12
months after the end of the reporting period.
10.1.
Cash and cash equivalents
2024
2023
$'000
$'000
Current assets
Total cash and cash equivalents
55,245
67,330
Cash flow reconciliation of net profit after tax to net cash flows from operations
Disclosure of non-cash financing activities
Non-cash financing activities include capital raised pursuant to the NSR’s distribution reinvestment plan.
During the year 21.2m stapled securities (2023: 10.9m) were issued with a cash equivalent of $46.6m
(2023: $25.7m).
10.2.
Trade and other receivables
2024
2023
$'000
$'000
Profit after income tax
230,271
320,400
Income tax expense
11,471
13,817
Profit before income tax
241,742
334,217
Adjustments to reconcile profit before tax to net cash flows:
Depreciation
1,736
2,054
Loss on disposal of property, plant and equipment
-
132
Amortisation of intangible assets
997
775
Derecognition of intangible assets presented in restructuring costs
49
-
Fair value adjustments
(86,702)
(188,011)
Derecognition of capitalised borrowing costs presented in
restructuring costs
3,452
-
Share-based payments
1,224
1,504
Share of (profit) / loss from joint ventures and associates
(1,245)
23
Interest income
(2,221)
(2,654)
Finance costs
52,126
47,960
Changes in operating assets and liabilities:
(Increase) / decrease in receivables
(2,173)
1,980
Decrease / (increase) in inventories
495
(252)
Increase in other assets
(995)
(1,187)
(Decrease) / increase in payables
(7,541)
2,060
Decrease in deferred revenue
(673)
(555)
Increase in provisions
774
1,260
Cash flows from operating activities
201,045
199,306
Interest received
3,274
2,330
Income tax paid
(19,902)
(13,325)
Net cash flows from operating activities
184,417
188,311
2024
2023
Notes
$'000
$'000
Current
Trade receivables
6,359
3,818
Goods and services tax receivable
2,428
-
Other receivables
3,061
6,654
Receivables from related parties
18
6,924
7,117
Allowance for expected credit losses on trade receivables
(638)
(281)
18,134
17,308
Non-current
Other receivables
181
181
Receivables from related parties
18
2,181
-
2,362
181
Total current and non-current
20,496
17,489
Annual Report 2024
95
Classification as trade and other receivables
Trade receivables are amounts due from customers for rental income, goods sold or services performed
in the ordinary course of business. Other receivables are held to collect contractual cash flows of solely
payments of principal and interest. If collection is expected in one year or less, they are classified as
current assets. If not, they are presented as non-current assets.
The allowance for expected credit losses represents an estimate of receivables that are not considered
to be recoverable. The Group recognises an expected loss provision based on lifetime expected credit
losses at each reporting date. The Group applies judgement in assessing this allowance based on its
historical credit loss experience, adjusted for forward-looking factors specific to the receivable, and
wider economic factors.
See note 18 for terms and conditions relating to related party receivables.
See below for the movements in the allowance for expected credit losses in the Group.
2024
2023
$'000
$'000
At 1 July
281
219
Charge for the year
358
114
Reversed in the year
-
(54)
Effect of movement in foreign exchange
(1)
2
At 30 June
638
281
The age of trade receivables not impaired was as follows:
2024
2023
$'000
$'000
0 to 3 months
5,017
3,205
3 to 6 months
452
294
Over 6 months
252
38
5,721
3,537
The carrying amounts of current receivables are assumed to be the same as their fair values, due to
their short-term nature. The fair value of non-current receivables approximates carrying value.
10.3.
Other assets
2024
2023
$'000
$'000
Current
Prepayments
11,756
10,864
Financial assets (derivatives)
2,995
519
14,751
11,383
Non-current
Deposits
6,944
8,876
Financial assets (derivatives)
23,418
19,307
30,362
28,183
Total current and non-current
45,113
39,566
Deposits include advances on contracts or options on investment property purchases. Contracts where
the Group has a future commitment to acquire an investment property are detailed in note 19.
For details on the classification of financial instruments see note 10.
10.4.
Trade and other payables
2024
2023
$'000
$'000
Current
Trade payables
388
6,144
Accrued expenses
35,306
20,886
GST and employment taxes payable
887
1,463
Other payables
3,927
1,624
40,508
30,117
Non-current
Other payables
1,156
1,283
Total current and non-current
41,664
31,400
Trade payables are unsecured and are usually paid within 30 days of recognition. Other payables and
accruals are paid when amounts fall due. The carrying amounts of trade and other payables are
assumed to be the same as their fair values, due to their short-term nature.
10.5͘
Borrowings
2024
2023
$'000
$'000
Non-current
Bank finance facilities
1,399,208
946,958
Non-amortised borrowing costs
(3,677)
(5,825)
Total borrowings
1,395,531
941,133
The Group has non-current borrowing facilities denominated in Australian Dollars (“AUD”) and New
Zealand Dollars (“NZD”). All facilities are interest only facilities with any drawn balances payable at
maturity. Drawn amounts and facility limits are as follows:
2024
2023
$'000
$'000
Bank finance facilities (AUD)
Drawn amount
1,275,000
855,000
Facility limit
1,645,000
1,410,000
Bank finance facilities (NZD)
Drawn amount
136,000
100,000
Facility limit
215,000
225,000
AUD equivalent of NZD facilities
Drawn amount
124,208
91,957
Facility limit
196,358
206,904
The major terms of these agreements are as follows:
•
At 30 June 2024 maturity dates on these facilities range from 2 September 2025 to 13 June 2030 (30
June 2023: maturity dates from 1 September 2023 to 13 June 2030).
•
All facilities are unsecured and interest only with any drawn balance payable at maturity.
•
The interest rate applied is the bank bill rate plus a margin.
The Group has a bank overdraft facility with a limit of $3m that was undrawn at 30 June 2024 and 30
June 2023. During the year ended 30 June 2024, the Group refinanced existing facilities which previously
had upcoming maturities in FY25, negotiated $325m (AUD equivalent) of additional facilities and repaid
Annual Report 2024
97
$100m of term loan facilities. As a result of these initiatives, Group finance facilities increased to $1,841m
at 30 June 2024 (30 June 2023: $1,617m).
Transaction costs of $3.5m relating to extinguished facilities were expensed in the year. These costs are
included within restructuring costs in the Consolidated Statement of Profit or Loss.
The Group has complied with the financial covenants of their borrowing facilities during the 2024 and
2023 reporting periods (see note 17). The fair value of interest-bearing loans and borrowings
approximates carrying value. Details of the exposure to risk arising from current and non-current
borrowings are set out in note 16.
Interest rate derivatives
The Group uses interest rate derivatives as part of its risk management strategy to manage exposure to
interest rate fluctuations. These derivatives include interest rate swaps, interest rate caps, and interest
rate swaptions. The purpose of using a combination of these instruments is to mitigate the impact of
interest rate changes on the Group's future cash flows in accordance with its risk management policies.
The Group has the following interest rate derivatives at the end of the reporting period:
2024
2023
$'000
$'000
Interest rate swaps (AUD) at face value
Current interest rate swaps
550,000
300,000
Future interest rate swaps
200,000
50,000
Interest rate swaps (NZD) at face value
Current interest rate swaps
50,000
50,000
Future interest rate swaps
25,000
25,000
AUD equivalent of NZD interest rate swaps
Current interest rate swaps
45,665
45,979
Future interest rate swaps
22,832
22,989
Sold interest rate caps (AUD) at face value
540,000
40,000
Interest rate swaptions (AUD) at face value
540,000
40,000
Interest rate swaptions (NZD) at face value
50,000
50,000
AUD equivalent of NZD interest rate swaptions
45,664
45,979
Interest rate swaps
Interest rate swaps are financial contracts where the Group agrees to exchange interest rate cash flows
with a counterparty. Typically, the Group exchanges fixed-rate interest payments for floating-rate
interest payments based on a notional principal amount.
Interest rate caps
Interest rate caps are financial instruments that set a maximum interest rate payable on a notional
amount over a specified period. The Group enters into interest rate caps which impact an interest rate
swap by providing a maximum or minimum limit on the floating interest rate payments that the Group's
counterparty must make to the Group under the swap. The Group has sold interest rate caps to lower
the blended swap rate when the BBSY rate is below the agreed threshold (set quarterly). If the BBSY is
above this threshold at the quarterly roll date the Group is required to pay additional interest
payments.
Interest rate swaptions
Interest rate swaptions are options contracts that provide the counterparty with the option but not the
obligation to extend an interest rate swap at a specified future date on predetermined terms.
Interest rate derivatives in place at the end of the reporting period have maturity dates ranging from 23
September 2024 to 23 September 2030 (30 June 2023: 23 September 2023 to 23 June 2027).
10.6͘
Other liabilities
2024
2023
$'000
$'000
Current financial liabilities – interest rate derivatives
519
-
Non-current financial liabilities – interest rate derivatives
13,755
1,289
Total current and non-current other liabilities
14,274
1,289
10.7.
Right of use assets and lease liabilities
a) Right of use assets
b) Lease liabilities
2024
2023
$’000
$’000
Current lease liabilities
Lease liabilities relating to right of use assets
1,230
1,151
Lease liabilities relating to right of use assets presented as leasehold
investment properties
10,409
10,134
Total current lease liabilities
11,639
11,285
Non-current lease liabilities
Lease liabilities relating to right of use assets
2,570
3,756
Lease liabilities relating to right of use assets presented as leasehold
investment properties
79,537
86,330
Total non-current lease liabilities
82,107
90,086
Total lease liabilities
93,746
101,371
Premises
leases
Equipment
leases
Advertising
leases
Total
$'000
$'000
$'000
$'000
Opening balance at 1 July 2023
4,259
5
117
4,381
Additions
-
57
-
57
Depreciation
(1,111)
(11)
(8)
(1,130)
Reassessment of variable lease payments
-
(4)
-
(4)
Effect of movement in foreign exchange
(3)
-
-
(3)
Closing balance at 30 June 2024
3,145
47
109
3,301
Opening balance at 1 July 2022
4,656
386
123
5,165
Additions
585
101
-
686
Depreciation
(1,010)
(469)
(8)
(1,487)
Reassessment of variable lease payments
28
(13)
-
15
Effect of movement in foreign exchange
-
-
2
2
Closing balance at 30 June 2023
4,259
5
117
4,381
Annual Report 2024
99
2024
2023
$’000
$’000
Amounts recognised in consolidated statement of profit or loss:
Depreciation of right of use assets
1,130
1,487
Interest expense on lease liabilities
4,528
4,984
Expenses relating to short term leases presented within premises costs
29
36
Lease diminution on leasehold investment properties presented within
fair value adjustments (note 8)
9,715
8,361
Total
15,402
14,868
The Group has several lease contracts that include extension and termination options. The Group has
included the extension period as part of the lease term for leases of investment property where the
option is expected to be exercised at the next renewal period.
Set out below are the undiscounted potential future rental payments relating to periods following the
exercise date of extension options that are not included in the lease term:
Group as a lessor
Future minimum rentals receivable under non-cancellable operating leases are as follows:
30 June
2024
30 June
2023
$’000
$’000
Within one year
5,772
5,930
After one year but not more than five years
10,170
5,026
More than five years
1,216
-
Total
17,158
10,956
10.8.
Financial instruments fair value measurement
Fair value hierarchy
This note explains the judgements and estimates made in determining the fair values of the financial
instruments recognised in the financial statements, as detailed in notes 10.1 to 10.7. To provide an
indication about the reliability of the inputs used in determining fair value, financial instruments are
classified into the following three levels.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded
derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end
of the reporting period. The quoted market price used for any financial assets held is the current bid
price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example,
over-the-counter derivatives) is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
Within five
years
More than
five years
Total
$'000
$'000
$'000
Extension options expected not to be exercised
At 30 June 2024
5,239
242,670
247,909
At 30 June 2023
5,583
247,540
253,123
Specific fair valuation techniques used to determine fair values include:
•
The fair value of interest rate derivatives is calculated as the present value of the estimated future
cash flows based on observable yield curves, adjusted for counterparty or own credit risk.
The resulting fair value estimates for interest rate derivatives are included in level 2.
There were no transfers between levels of fair value hierarchy during the years ended 30 June 2024 and
30 June 2023.
11.
NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group’s non-financial assets and liabilities including:
•
An overview of all non-financial assets and liabilities held by the Group;
•
Specific information about each type of non-financial asset and non-financial liability; and
•
Information about determining the fair value of the non-financial assets and liabilities, including
areas of judgement, estimates and other assumptions.
11.1.
Inventories
2024
2023
$’000
$’000
Finished goods - at lower of cost and net realisable value
1,592
2,107
11.2.
Assets held for sale
On 13 June 2024, NSR entered into binding agreements with GIC to establish the National Storage
Ventures Fund (“NSVF”).
Level 1
Level 2
Level 3
Total
Notes
$'000
$'000
$'000
$'000
At 30 June 2024
Interest rate derivatives
Current financial assets
10.3
-
2,995
-
2,995
Non-current financial assets
10.3
-
23,418
-
23,418
Current financial liabilities
10.6
-
(519)
-
(519)
Non-current financial liabilities
10.6
-
(13,755)
-
(13,755)
-
12,139
-
12,139
At 30 June 2023
Interest rate derivatives
Current financial assets
10.3
-
519
-
519
Non-current financial assets
10.3
-
19,307
-
19,307
Non-current financial liabilities
10.6
-
(1,289)
-
(1,289)
-
18,537
-
18,537
2024
2023
Notes
$'000
$'000
Current assets
Opening balance at 1 July
-
-
Items reclassified from investment properties under
construction
11.4
141,409
-
Items reclassified from current assets
129
-
Items reclassified from non-current assets
1,135
-
Total assets held for sale
142,673
-
Annual Report 2024
101
9
NSVF will acquire and develop an initial portfolio of ten foundation assets from NSR’s existing portfolio at
consideration equal to the assets’ carrying value.
As a result of these agreements, these assets have been classified as held for sale at 30 June 2024. The
sale of these assets is expected to complete during September 2024.
11.3.
Property, plant and equipment
Reconciliation of the carrying amounts of property, plant and equipment at the beginning and end of
the financial periods are shown below:
2024
2023
$'000
$'000
At cost
3,729
2,899
Accumulated depreciation
(2,263)
(1,658)
Total property, plant and equipment
1,466
1,241
2024
2023
$'000
$'000
Plant and equipment
Opening balance at 1 July
1,241
1,365
Additions
830
573
Disposals
-
(132)
Depreciation
(606)
(567)
Effect of movement in foreign exchange
1
2
Closing balance at 30 June
1,466
1,241
11.4.
Investment properties
2024
2023
Notes
$'000
$'000
Leasehold investment properties in operation
11.8
127,146
136,775
Freehold investment properties in operation
11.8
4,387,352 3,978,791
Investment properties under construction
315,102
269,170
Total investment properties
4,829,600
4,384,736
Leasehold investment properties in operation
Opening balance at 1 July
136,775
140,681
Property acquisitions
-
2,048
Improvements to investment properties
477
324
Reassessment of lease terms
3,742
1,641
Items reclassified to freehold investment properties
(437)
(230)
Lease diminution, presented as fair value adjustments
10.7b
(9,715)
(8,361)
Net (loss) / gain from other fair value adjustments
(3,696)
672
Closing balance at 30 June
127,146
136,775
Freehold investment properties in operation
Opening balance at 1 July
3,978,791
3,612,082
Property acquisitions
205,508
136,944
Improvements to investment properties
11,002
5,875
Items reclassified from leasehold investment properties
437
230
Items reclassified to investment properties under construction
(22,255)
(6,109)
Items reclassified from investment properties under construction
119,830
28,949
Net gain from fair value adjustments
97,297
193,277
Effect of movement in foreign exchange
(3,258)
7,543
Closing balance at 30 June
4,387,352
3,978,791
Investment properties under construction
Opening balance at 1 July
269,170
77,471
Property acquisitions
58,889
114,014
Development costs
226,027
100,525
Items reclassified to freehold investment properties
(119,830)
(28,949)
Items reclassified from freehold investment properties
22,255
6,109
Items reclassified to assets held for sale
11.2
(141,409)
-
Closing balance at 30 June
315,102
269,170
Annual Report 2024
103
11.5.
Intangible assets
Impairment testing of goodwill
The Group performed its annual impairment test at 30 June 2024 and 30 June 2023.
Goodwill has been allocated to the listed group (NSR). Management have determined that the listed
group, which is considered one operating segment (see note 4), is the appropriate CGU against which
to allocate these intangible assets owing to the synergies arising from combining the portfolios of the
Group.
The recoverable amount of the listed group has been determined based on the fair value less costs of
disposal method using the fair value quoted on an active market and an estimate for the value
attributable to control over the CGU (e.g. control premium) and costs of disposal. The key estimation
input used in the calculation is the control premium. The basis for determining the value assigned to the
control premium is reflective of observed examples of premiums to the pre-announcement share prices
paid for acquisitions of public companies.
The Group also uses a secondary calculation based on the incremental value attributable to
investment properties as a portfolio. This sits above the stand-alone valuation permitted for assessing the
fair value of investment property under AASB 140. The portfolio premium is estimated using the same
capitalisation method used for the valuation of the investment properties detailed in Note 11.8.
The key estimation input of the portfolio premium is the incremental capitalisation rate. This is
determined from independent valuations with regard to observable premiums paid from recent sales of
portfolio transactions, and assessing the level of premium which would be attached to a portfolio of the
Group’s size. Management believes an incremental capitalisation rate of between 50 to 100 basis
points to the portfolio is the minimum level appropriate to be used in this calculation.
As a result of the analysis, management did not identify an impairment for this CGU.
11.6.
Deferred revenue
Deferred rental income revenue represents funds received in advance from customers.
2024
2023
Notes
$'000
$'000
Goodwill
Opening and closing net book value
43,954
43,954
Other intangible assets
Opening net book value
3,070
2,847
Additions
1,268
998
Derecognition losses presented within restructuring and
other non-recurring costs
(49)
-
Amortisation
6
(997)
(775)
Closing net book value
3,292
3,070
Total intangible assets
47,246
47,024
2024
2023
$'000
$'000
Deferred rental income revenue
16,372
17,045
11.7.
Provisions
The Group is required to restore the leased premises in a number of leasehold properties to their original
condition at the end of lease term. A provision has been recognised for the present value of the
estimated expenditure required to remove any leasehold improvements.
11.8.
Non-financial assets fair value measurement
The Group has classified its non-financial assets held at fair value into the three levels prescribed in note
10.8 to provide an indication about the reliability of inputs used to determine fair value.
Recognised fair value measurements
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels at the end of the
reporting period. There were no transfers between levels 1 and 2 or between levels 2 and 3 for recurring
fair value measurements during the current or prior year.
Fair value measurements using significant unobservable inputs (level 3)
Valuation techniques used to determine level 3 fair values and valuation process
Investment properties, principally storage centres, are held for rental to customers requiring self-storage
facilities and are carried at fair value. Changes in fair values are presented in profit or loss as fair value
adjustments.
Fair values are determined by a combination of external valuations and internal valuations. The external
valuations are performed by an accredited independent valuer. Investment properties are
2024
2023
$'000
$'000
Current
Make good provisions
-
243
Annual leave
3,677
3,304
Long service leave
1,682
1,400
5,359
4,947
Non-current
Make good provisions
7,666
7,695
Long service leave
1,782
1,664
9,448
9,359
Reconciliation of movement in make good provisions
As at 1 July
7,938
8,079
Extinguished during the year
(248)
-
Reassessment of existing provisions
-
760
Movement in discount rates
(24)
(901)
Utilised
-
-
As at 30 June
7,666
7,938
Level 1
Level 2
Level 3
Total
Notes
$'000
$'000
$'000
$'000
At 30 June 2024
Leasehold investment properties
11.4
-
-
127,146
127,146
Freehold investment properties
11.4
-
-
4,387,352 4,387,352
-
-
4,514,498 4,514,498
At 30 June 2023
Leasehold investment properties
11.4
-
-
136,775
136,775
Freehold investment properties
11.4
-
-
3,978,791
3,978,791
-
-
4,115,566
4,115,566
Annual Report 2024
105
independently valued on a rotational basis every three years unless a more frequent valuation cycle is
required. For properties subject to an independent valuation report management verify all major inputs
to the valuation and review the results with the independent valuer. The internal valuations are
completed by management and reviewed by the NSH Group Board. The valuations are determined
using the same techniques and similar estimates to those applied by the independent valuer.
The Group obtains the majority of its independent valuations at each financial year end. The Group’s
policy is to maintain the valuation of the investment property at external valuation for all properties
valued in the preceding year, unless there is an indication of a significant change to the property’s
valuation inputs. Investment properties acquired in the year ended 30 June 2024 have been held at
acquisition price.
Valuation inputs and relationship to fair value
Description
Significant unobservable inputs
Range at 30
June 2024
Range at 30
June 2023
Investment
properties -
freehold
Primary capitalisation rate
5.0% to 8.0%
4.7% to 7.9%
Secondary capitalisation rate
5.3% to 8.5%
5.3% to 8.1%
Weighted average primary cap rate
5.8%
5.8%
Weighted average secondary cap rate
6.3%
6.4%
Weighted average sustainable occupancy
86.3%
87.3%
Stabilised average EBITDA
$1,168,619
$1,134,151
Investment
properties -
leasehold
Primary capitalisation rate
6.3% to 40.0%
6.0% to 55.0%
Secondary capitalisation rate
6.3% to 40.0%
6.5% to 55.0%
Weighted average primary cap rate
15.7%
13.4%
Weighted average secondary cap rate
16.2%
13.6%
Weighted average sustainable occupancy
87.5%
88.1%
Stabilised average EBITDA
$610,317
$469,764
Under the income capitalisation method, a property’s fair value is estimated based upon a
combination of current trading income and potential income. Potential income is subject to a higher
degree of risk, reflected in a higher secondary capitalisation rate.
Current earnings before interest, tax, depreciation and amortisation (“EBITDA”) generated by the
property is divided by the primary capitalisation rate (the investor's required rate of return).
Potential income is represented by additional EBITDA (stabilised EBITDA less current EBITDA) divided by
the secondary capitalisation rate. Stabilised EBITDA reflects the estimated EBITDA generated once a
property reaches a sustainable level of operations. The value attributed to the secondary capitalisation
is then discounted to account for the estimated time and the additional costs required to deliver this
additional value.
The capitalisation rates are derived from recent sales of similar properties. The secondary capitalisation
rate is typically higher than the primary capitalisation rate to reflect the additional risk associated with
these cashflows. Generally, an increase in stabilised EBITDA will result in an increase in fair value of an
investment property. An increase in the vacancy rate will result in a reduction of the stabilised EBITDA.
Investment properties are valued on a highest and best use basis. The current use of all of the
investment properties (self-storage) is considered to be the highest and best use.
The capitalisation rate adopted reflects the inherent risk associated with the property. For example, if
the lease expiry profile of a particular property is short, the capitalisation rate is likely to be higher to
reflect additional risk to income. The higher capitalisation rate then reduces the valuation of the
property.
The following tables present the sensitivity of investment property fair values to changes in input
assumptions:
At 30 June 2024:
Unobservable inputs
Leasehold
Freehold
Increase/
(decrease)
in input
Increase/
(decrease) in fair
value
$’000
Increase/
(decrease)
in input
Increase/
(decrease) in fair
value
$’000
Primary capitalisation rate
1% / (1%)
(2,375) / 2,975
1% / (1%)
(537,649) / 764,217
Secondary capitalisation
rate
2% / (2%)
(1,175) / 2,025
2% / (2%)
(131,698) / 260,293
Sustainable occupancy
5% / (5%)
7,425 / (5,075)
5% / (5%)
284,256 / (195,555)
Stabilised EBITDA
5% / (5%)
1,925 / (1,675)
5% / (5%)
194,215 / (148,239)
At 30 June 2023:
Unobservable inputs
Leasehold
Freehold
Increase/
(decrease)
in input
Increase/
(decrease) in fair
value
$’000
Increase/
(decrease)
in input
Increase/
(decrease) in fair
value
$’000
Primary capitalisation rate
1% / (1%)
(3,275) / 4,200
1% / (1%)
(524,915) / 746,138
Secondary capitalisation
rate
2% / (2%)
(575) / 950
2% / (2%)
(94,237) / 186,433
Sustainable occupancy
5% / (5%)
8,125 / (3,475)
5% / (5%)
256,914 / (136,278)
Stabilised EBITDA
5% / (5%)
2,100 / (1,375)
5% / (5%)
182,084 / (131,438)
Annual Report 2024
107
12.
INFORMATION RELATING TO SUBSIDIARIES
The ultimate holding company of the Group is National Storage Holdings Limited. This entity is domiciled
in Australia.
The consolidated financial statements of the Group as at 30 June 2024 include:
Name of controlled entity
Place of
incorporation
Equity interest
2024
2023
National Storage (Operations) Pty Ltd
Australia
100%
100%
Southern Cross Storage Operations Pty Ltd
Australia
100%
100%
Wine Ark Pty Ltd
Australia
100%
100%
National Storage Financial Services Limited
Australia
100%
100%
National Storage Finance Pty Ltd
Australia
100%
100%
NS Development Co 1 Pty Ltd
Australia
100%
100%
National Storage No.2 Pty Ltd
Australia
100%
100%
National Storage No.3 Pty Ltd
Australia
100%
100%
National Storage Limited
New Zealand
100%
100%
National Storage Pty Ltd
Australia
100%
100%
National Storage Developments Pty Ltd*
Australia
100%
100%
National Storage Investments Pty Ltd
Australia
100%
100%
Runway Technologies Pty Ltd
Australia
100%
100%
National Storage Property Trust**
Australia
100%
100%
National Storage Victorian Property Trust
Australia
100%
100%
National Storage New Zealand Property
Trust***
Australia
100%
100%
National Storage Southern Trust
Australia
100%
100%
National Storage Investment Trust
Australia
100%
100%
National Storage Active Investment Trust
Australia
100%
100%
National Storage Finance Trust
Australia
100%
100%
*Strategic Storage Consulting Pty Ltd changed name to National Storage Developments Pty Ltd on 4 July 2024
** The result of NSPT has been consolidated due to the stapling arrangement between NSPT and NSH which
constitutes NSR. Equity attributable to NSPT is presented as non-controlling interest.
*** NSNZPT is an Australian registered trust which holds investment properties in New Zealand
13.
INTEREST IN JOINT VENTURES AND ASSOCIATES
Interest in joint ventures
* Included within share of profit / (loss) from joint ventures in the year ended 30 June 2024 was $0.3m representing
NSR’s share of fair value gain related to investment properties held by joint ventures (30 June 2023: $0.1m loss).
The above investments are classified as joint ventures as all parties are subject to a Securityholders
Agreement that has been contractually structured such that the parties to the agreement have equal
representation on the advisory board responsible for the overall direction and supervision of each trust.
During the year the Group subscribed to a 30% interest in BFNS Trust and BFNS Operations Pty Ltd for
$5.5m. BFNS Trust subsequently purchased a newly constructed self-storage centre in Queensland,
Australia. This centre commenced trading in December 2023 and is operated by BFNS Operations Pty
Ltd.
During the year, the Group also acquired a storage centre investment property asset from the Bundall
Storage Trust for $40.2m. This centre was previously operated by Bundall Storage Operations Pty Ltd. The
Group also acquired commercial investment property from Bundall Commercial Trust for $5.4m, and the
TBF & NS Trust for $7.1m. There was no change in the share of the Group’s interest following this
transaction. The Group received distributions totalling $5.2m as a result of these transactions.
Following the completion of the above transactions and prior to 30 June 2024, Bundall Storage Trust and
the TBF & NS Trust have been terminated, and Bundall Storage Operations Pty Ltd and Moorooka
Storage Operations Pty Ltd are in the process of being deregistered.
On 26 June 2024, the Group disposed of its interest in Bundall Commercial Trust for $1.7m.
On 13 June 2024, the Group subscribed to a 25% interest in National Storage Ventures Trust and a 4.9%
interest in National Storage Ventures Operations Pty Ltd both for nominal initial investments. These
entities form the National Storage Ventures Fund (“NSVF”) (see note 11.2).
Interest in associate
The Group holds a 21% (30 June 2023: 21%) holding in Spacer Technologies Pty Ltd (“Spacer”). Spacer
operate online peer-to-peer and corporate marketplaces for parking and self-storage in Australia and
North America. During the year ended 30 June 2024, the Group made a capital contribution of $0.1m
into Spacer. (30 June 2023: $0.1m).
See note 18 for fees received and purchases from joint ventures and associates. None of the Group’s
joint ventures or associates are listed on any public exchange.
2024
2023
$'000
$'000
Opening balance at 1 July
5,794
7,433
Acquisition of shareholding / capital contribution in joint venture
5,460
-
Share of profit / (loss) from joint ventures*
1,166
(20)
Distributions received from joint ventures
(5,200)
(1,619)
Disposal of shareholding in joint venture
(1,748)
-
Closing balance at 30 June
5,472
5,794
2024
2023
$'000
$'000
Opening balance at 1 July
3,192
3,095
Capital contribution in associate
112
100
Share of profit / (loss) from associate
79
(3)
Closing balance at 30 June
3,383
3,192
Annual Report 2024
109
14.
CONTRIBUTED EQUITY
Number of stapled securities on issue
2024
2023
Opening balance at 1 July
1,348,382,592
1,195,498,309
Institutional and retail capital raises
-
141,229,611
Distribution reinvestment plan
21,153,845
10,928,651
Securities issued under equity incentive plan
816,693
726,021
Closing balance at 30 June
1,370,353,130
1,348,382,592
Distribution reinvestment plan
During the year, 21,153,845 (2023: 10,928,651) stapled securities were issued to securityholders
participating in the Group’s Distribution Reinvestment Plan for consideration of $46.6m (2023:
$25.7m). The stapled securities were issued at the volume weighted average market price of the
Group's stapled securities over a period of ten trading days, less a 2% discount.
Securities issued under equity incentive plan
During the year 254,993 stapled securities were issued to the NSH senior executive team for FY23 Short-
Term Incentive (“STI”). No consideration was paid by the recipients for the issue of the stapled securities,
which were issued for a deemed price of $2.2589 per stapled security under the terms of the STI award.
The deemed price was calculated using the volume weighted average market price of the Group’s
stapled securities over a 30-day trading period to 30 June 2022.
561,700 stapled securities were issued to the NSH senior executive team following the vesting of
performance rights under Long Term Incentive (“LTI”) remuneration. No consideration was paid by the
recipients for the issue of the stapled securities, which were issued for a deemed price of $2.044 per
stapled security calculated using the volume weighted average market price of the Group’s stapled
securities over a 30-day trading period to 30 June 2021 under the terms of the LTI award.
Terms and conditions of contributed equity
Stapled securities
A stapled security represents one share in NSH and one unit in NSPT. Stapled securityholders have the
right to receive declared dividends from NSH and distributions from NSPT and are entitled to one vote
per stapled security at securityholders’ meetings. Holders of stapled securities can vote their shares and
units in accordance with the Corporations Act 2001, either in person or by proxy, at a meeting of either
NSH or NSPT. The stapled securities have no par value.
In the event of the winding up of NSH and NSPT, stapled securityholders have the right to participate in
the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
stapled securities held. Ordinary stapled securityholders rank after all creditors in repayment of capital.
There is no current on or off market security buy-back.
2024
2023
$’000
$’000
Issued and paid up capital
196,004
191,938
15.
OTHER RESERVES
The share-based payments reserve is used to recognise the value of equity-settled share-based
payments provided to key management personnel as part of their remuneration. Refer to note 21 for
further details of these plans.
The financial statements for the Group are prepared on the basis that NSH was the acquirer of NSPT. On
this basis, foreign currency translation reserve and share-based payment reserve movements relating to
the NSH Group are presented within other reserves in the Group’s consolidated statement of changes in
equity.
The movements below in foreign currency translation reserve and cash flow hedge reserve relating to
the NSPT Group are presented within non-controlling interest in the Group’s consolidated statement of
changes in equity.
The hedging reserve is used to record gains or losses on derivatives that are designated as cash flow
hedges and recognised in other comprehensive income, as described in note 2(m). Amounts are
reclassified to profit or loss in the period when the associated hedged transaction takes place.
In previous years, the Group has reset the interest rates associated with interest rate derivatives
designated as cash flow hedges. In accordance with AASB 9 Financial Instruments, as the nature of the
underlying hedged instrument is unchanged the fair value of these outflows remain in the cash flow
hedge reserve and are amortised to the consolidated statement of profit or loss in both the current and
2024
2023
$'000
$'000
Share-based payment reserve
Opening balance at 1 July
2,420
2,556
Expense for the year
1,393
1,504
Forfeited in the year
(169)
-
Issue of securities upon vesting
(1,498)
(1,640)
Closing balance at 30 June
2,146
2,420
Foreign currency translation reserve
Opening balance at 1 July
(77)
(141)
Foreign exchange translation differences
(10)
64
Closing balance at 30 June
(87)
(77)
Other reserves
2,059
2,343
NSPT Group
2024
2023
$'000
$'000
Foreign currency translation reserve
Opening balance at 1 July
(1,897)
(6,190)
Net investment hedge
(976)
1,158
Foreign exchange translation differences
(1,386)
3,135
Closing balance at 30 June
(4,259)
(1,897)
Cash flow hedge reserve
Opening balance at 1 July
11,215
10,636
Revaluation of cash flow hedges
(8,642)
(4,780)
Reclassification to consolidated statement of profit or loss (see
note 7)
3,481
5,359
Closing balance at 30 June
6,054
11,215
Other reserves
1,795
9,318
Annual Report 2024
111
future periods relating to the profile of the original instrument. During the year ended 30 June 2024,
$3.5m (30 June 2023: $5.4m) has been recognised in finance costs relating to this item (see note 7).
16.
FINANCIAL RISK MANAGEMENT
This note outlines the Group’s exposure to financial risks and how these risks could affect future financial
performance.
The Group’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the business. The Group
uses derivative financial instruments such as interest rate swaps, caps, and interest rate swaptions to
hedge certain market risk exposures. Risk management and risk exposure is governed by the Treasury
Policy, which is reviewed at least annually. This considers interest rate exposure and evaluates treasury
management strategies in the context of the most recent economic conditions and forecasts.
Derivatives
Derivatives are only used for economic hedging purposes and not as trading or speculative instruments.
The fair value of the Group’s derivative financial instruments is presented below:
Classification of derivatives
Derivatives entered into prior to 30 June 2022 were designated as cash flow hedges with changes in the
fair value of the instrument recognised in OCI and accumulated in the Groups cash flow hedge
reserve. The Group continues to hedge account for these derivatives until the expiry date of the
instrument. The Group will discontinue hedge accounting should the instrument fail to meet the risk
management objective, no longer comply with the qualifying criteria, or is sold or terminated.
Derivatives entered into post 30 June 2022 have not been designated as hedging instruments and are
therefore classified as held for trading. Changes in the fair value of the derivatives is recognised directly
in fair value adjustments within the consolidated statement of profit or loss. All derivatives are presented
as current assets or liabilities if they are expected to be settled within 12 months after the end of the
reporting period.
The Group’s accounting policy for cash flow hedges is set out in note 2(m).
Fair value measurement
For information about the methods and assumptions used in determining fair values of derivatives refer
to note 10.8.
2024
2023
Notes
$'000
$'000
Interest rate derivatives not designated as hedging
instruments presented in:
Current assets
10.3
1,595
-
Non-current assets
10.3
16,978
3,343
Current liabilities
10.6
(519)
-
Non-current liabilities
10.6
(13,755)
(1,289)
Net assets
4,299
2,054
Interest rate derivatives designated as cash flow
hedges presented in:
Current assets
10.3
1,400
519
Non-current assets
10.3
6,440
15,964
Net assets
7,840
16,483
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises of three types of risk: interest rate risk,
currency risk and other price risk, such as equity price and commodity risk. Financial instruments
affected by market risk include loans and borrowings, deposits, debt and equity investments, and
derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at 30 June 2024 and 30 June
2023. The sensitivity analysis has been prepared on the basis that the amount of net debt, the ratio of
fixed to floating interest rates of debt and derivatives and the proportion of financial instruments in
foreign currencies are all constant on the basis of hedge designations in place at each year end.
The analysis excludes the impact of movements in market variables on provisions and the non-financial
assets and liabilities of foreign operations.
The following assumptions have been made in calculating sensitivity analysis:
•
The sensitivity of the relevant consolidated statement of profit or loss item is the effect of the
assumed changes in respective market risks. This is based on the financial assets and financial
liabilities held at 30 June 2024 and 30 June 2023 including the effect of hedge accounting.
•
The sensitivity of equity is calculated by considering the effect of any associated cash flow hedges
and hedges of a net investment in a foreign subsidiary in place at 30 June 2024 and 30 June 2023.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s exposure to the risk of changes in market
interest rates relate primarily to its debt obligations, which are principally by way of variable rate loan
facilities.
The Group manages its interest rate margin risk by having a balanced portfolio of debt from a variety of
providers and markets, with multiple maturities. Interest rate risk is also managed by using financial
derivatives, which include interest rate swaps, forwards, options and caps. At 30 June 2024, after taking
into account the effect of interest rate derivatives, 42.6% (2023: 36.5%) of the Group’s borrowings are at
a fixed rate of interest.
Interest rate sensitivity
The following table demonstrates the sensitivity to a possible change in interest rates on the portion of
loans and borrowings affected, after the impact of hedge accounting.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently
observable market environment.
Increase/ decrease
in basis points
Effect on profit before tax
$'000
2024
Australian dollar denominated debt
+50 / -50
(2,103) / 2,103
New Zealand dollar denominated debt
+50 / -50
(266) / 266
2023
Australian dollar denominated debt
+50 / -50
(2,143) / 2,143
New Zealand dollar denominated debt
+50 / -50
(775) / 775
Annual Report 2024
113
Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign
exchange rates relates primarily to the Group’s operating activities (when revenue or expense is
denominated in a foreign currency), and the Group’s net investment in foreign subsidiaries.
The Group hedges its exposure to fluctuations on the translation into Australian dollars of its New
Zealand operations by holding a level of borrowings in New Zealand dollars.
Foreign currency sensitivity
The following tables demonstrate the sensitivity to a possible change in New Zealand Dollar exchange
rate with all other variables held constant.
The movement in the profit before tax is a result of a change in the fair value of the monetary assets
and liabilities denominated in NZD. The movement in pre-tax equity arises from changes in NZD
borrowings in the hedge of net investments in New Zealand operations and cash flow hedges. These
movements will offset the translation of New Zealand operations’ net assets into AUD.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including deposits with banks and
other financial instruments.
Trade receivables
The exposure to credit risk for trade and other receivables is influenced mainly by the individual
characteristics of each customer. The Group’s customer credit risk is managed by requiring customers
to pay monthly storage rentals in advance. Customer credit risk is reduced through a contractual lien
over the contents stored in the rented units. The terms of the storage agreement provide for the auction
of the customer’s stored contents to recover any unpaid amounts. Outstanding customer receivables
are regularly monitored and credit concerns reviewed.
The allowance for expected credit losses represents an estimate of trade receivables that are not
considered to be recoverable. For the year ended 30 June 2024, the Group has recognised an
expected loss provision of $638,000 (30 June 2023: $281,000) based on lifetime expected credit losses at
each reporting date. The Group assesses this allowance based on its historical credit loss experience,
adjusted for forward-looking factors specific to classification groups of receivables.
Cash and cash equivalents
The Group’s credit risk on cash and cash equivalents is limited as the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies. The maximum exposure to credit risk for
the components of the consolidated statement of financial position at 30 June 2024 and 30 June 2023 is
the carrying amounts as indicated in the consolidated statement of financial position.
Guarantees
Credit risk also arises in relation to financial guarantees given to certain parties (refer to notes 19, 23,
and 24). Such guarantees are only provided in exceptional circumstances.
Change in
NZD rate
Effect on profit
before tax
Effect on pre-
tax equity
$'000
$'000
2024
+5%
-5%
(403)
445
(18,557)
20,510
2023
+5%
-5%
(793)
876
(18,056)
19,957
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The objective of managing liquidity risk is to ensure the Group will have sufficient liquidity to meet its
liabilities when they fall due, under both normal and stressed conditions. NSH on behalf of the Group
has established a number of policies and processes for managing liquidity risk. These include:
•
Continuously monitoring cash flows on a daily basis as well as forecasting cash flows on a medium
and long-term basis.
•
Monitoring the maturity profiles of financial assets and liabilities in order to match cashflows.
•
Maintaining adequate reserves and support facilities.
•
Monitoring liquidity ratios and all constituent elements of working capital.
•
Maintaining adequate borrowing and finance facilities.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without
notice. All other unsecured bank loans may be drawn at any time and are subject to an annual review.
Further details of the bank loans are detailed in notes 10.5 and 17.
Maturity of financial liabilities
The tables below summarise the maturity profile of the Group’s financial liabilities based on contractual
undiscounted payments. As amounts disclosed in the table are the contractual undiscounted cash
flows including future interest payments, these balances will not necessarily agree with the amounts
disclosed on the consolidated statement of financial position.
2024
2023
$'000
$'000
Expiring within one year (bank overdraft)
3,000
3,000
Expiring within one year (loans)
-
30,000
Expiring beyond one year (loans)
442,150
639,947
Total
445,150
672,947
On
demand
Less than
3 months
3 to 12
months
1 to 5
years
Over 5
years
Total
At 30 June 2024
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other payables
1,704
37,758
1,046
1,156
-
41,664
Borrowings
-
22,425
62,785 1,371,609
212,098 1,668,917
Lease liabilities
-
3,876
11,801
48,310
58,917
122,904
Distribution payable
-
75,369
-
-
-
75,369
Total non-derivatives
1,704
139,428
75,632 1,421,075
271,015 1,908,854
Derivatives
Inflows
-
(3,396)
(8,236)
(14,744)
(2,326)
(28,702)
Outflows
-
252
1,451
3,513
-
5,216
Total derivatives
-
(3,144)
(6,785)
(11,231)
(2,326)
(23,486)
1,704
136,284
68,847 1,409,844
268,689 1,885,368
Annual Report 2024
115
Changes in liabilities arising from financing activities
On
demand
Less than 3
months
3 to 12
months
1 to 5
years
Over 5
years
Total
At 30 June 2023
$'000
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Trade and other payables
1,310
22,535
6,272
1,283
-
31,400
Borrowings
-
17,447
51,352
893,441
245,713
1,207,953
Lease liabilities
-
3,798
11,747
50,598
63,310
129,453
Distribution payable
-
74,161
-
-
-
74,161
Total non-derivatives
1,310
117,941
69,371
945,322
309,023
1,442,967
Derivatives
Inflows
-
(3,084)
(7,954)
(10,573)
(231)
(21,842)
Outflows
-
33
175
925
-
1,133
Total derivatives
-
(3,051)
(7,779)
(9,648)
(231)
(20,709)
1,310
114,890
61,592
935,674
308,792
1,422,258
1 July
2023
Cash
flows
Foreign
exchange
movement
Change
in fair
value
New
leases
Other
30 June
2024
$'000
$'000
$'000
$'000
$’000
$'000
$'000
Interest rate derivatives:
Current financial
liabilities
-
-
-
519
-
-
519
Non-current financial
liabilities
1,289
-
-
12,466
-
-
13,755
Distributions payable
74,161
(102,378)
-
-
-
103,586*
75,369
Borrowings
941,133
453,247
(946)
-
-
2,097
1,395,531
Lease liabilities
Current liabilities
11,285
(11,132)**
-
-
57
11,429
11,639
Non-current liabilities
90,086
-
(4)
-
-
(7,975)
82,107
Total liabilities from
financing activities
1,117,954
339,737
(950)
12,985
57
109,137
1,578,920
1 July
2022
Cash
flows
Foreign
exchange
movement
Change
in fair
value
New
leases
Other
30 June
2023
$'000
$'000
$'000
$'000
$’000
$'000
$'000
Interest rate derivatives:
Current financial liabilities
-
-
-
-
-
-
-
Non-current financial
liabilities
-
-
-
1,289
-
-
1,289
Distributions payable
64,557
(104,888)
-
-
-
114,492*
74,161
Borrowings
972,017
(30,948)
2,426
-
-
(2,362)
941,133
Lease liabilities
Current liabilities
10,636
(10,677)**
-
-
342
10,984
11,285
Non-current liabilities
97,954
-
2
-
1,532
(9,402)
90,086
Total liabilities from
financing activities
1,145,164
(146,513)
2,428
1,289
1,874
113,712
1,117,954
* Other balances presented above represent distributions declared in the year: $150.2m (30 June
2023: $140.2m) (see note 17), less units issued under the distribution reinvestment plan which do not
result in a cash outflow: $46.6m (30 June: 2023: $25.7m), (see note 14).
** Relates to principal portion of lease liability payment. Total lease payments for the year ended 30
June 2024 were $15.9m (30 June 2023: $14.6m) as disclosed in the Consolidated Statement of
Cashflows.
17.
CAPITAL MANAGEMENT
The Group’s objectives when managing capital are two-fold, to safeguard its ability to continue as a
going concern, and to maintain an optimal structure to reduce the cost of capital and maximise long
term value for its securityholders.
One component of achieving the capital management objectives is ensuring that the Group meets
financial covenants attached to interest-bearing borrowings, which includes a Gearing ratio and an
Interest Coverage ratio, consistent with the methodology held within the Common Terms Deed relating
to the Group’s borrowings. As at 30 June 2024, the Group was in compliance with all financial
covenants.
A failure to meet a financial covenant could permit the lender to seek repayment of committed
facilities. There have been no breaches of financial covenants relating to any loans and borrowings in
the current or prior year.
The Group manages its capital structure carefully to ensure it meet its capital management objectives
through economic cycles. Furthermore, it can make additional adjustments, including amending
distribution payments to securityholders, returning capital to securityholders, or issuing new securities.
Loan covenants
Financial covenants under the terms of the Group’s borrowing agreement require the Group to ensure
that the gearing ratio does not exceed 55% and the interest cover ratio does not fall below 2.0x. The
Group has complied with these covenants throughout the reporting period. The Gearing Ratio at 30
June 2024 was 26.6% (30 June 2023: 19.8%) against a maximum covenant level of 55%. The Interest
Cover Ratio at 30 June 2024 was 3.2x (30 June 2023: 4.1x), against a minimum covenant level of 2.0x.
Dividends and distributions
Distributions have been made and declared as noted below.
There are no proposed distributions not recognised as a liability for the year ended 30 June 2024.
The Directors of NSH have not declared an interim or final dividend for the year ended 30 June 2024.
Franking credit balance
NSPT Group
2024
2023
$'000
$'000
NSPT interim distribution of 5.5 cents per unit paid on
1 March 2024 (2023: 5.5 cents per unit)
74,863
66,001
NSPT final distribution of 5.5 cents per unit payable on
2 September 2024 (2023: 5.5 cents per unit)
74,161
75,369
150,232
140,162
2024
2023
$'000
$'000
Franking credits available for subsequent financial
years based on a tax rate of 30% (2023: 30%)
36,106
17,409
Annual Report 2024
117
The above amounts are calculated from the balance of the NSH franking account at the end of the
reporting period. The NSPT Group does not have franking credits as distributions are paid from NSPT
which is not liable to pay income tax provided all taxable income is distributed.
18.
RELATED PARTY TRANSACTIONS
The following tables provide the total amount of transactions that have been entered into with related
parties for the relevant financial years.
Transactions with Related Parties
Revenue
from
related
parties
Purchases
from
related
parties
Amount
owed by
related
parties
Amount
owed to
related
parties
$
$
$
$
Bundall Commercial Trust
2024
152,086
-
-
-
2023
230,036
-
2,915,866
-
Bundall Storage Trust
2024
67,521
-
-
-
2023
327,056
-
3,717,686
-
Bundall Storage Operations Pty Ltd
2024
187,020
-
-
-
2023
199,408
-
390,732
-
Spacer Technologies Pty Ltd
2024
-
82,645
-
22,500
2023
-
73,148
-
-
The TBF & NS Trust
2024
1,279,052
-
-
-
2023
224,026
-
51,346
-
Moorooka Storage
2024
77,289
-
-
-
Operations Pty Ltd
2023
38,217
-
41,551
-
BFNS Operations Pty Ltd
2024
132,309
-
134,127
-
2023
-
-
-
-
BFNS Trust
2024
2,421,141
-
8,971,141
-
2023
-
-
-
-
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made on terms equivalent to those that prevail in
arm’s length transactions.
As at 30 June 2024, the Group had receivables outstanding of $6,550,000 with the BFNS Trust relating to
amounts drawn under facility agreements. During the year, receivables owing from Bundall
Commercial Trust (30 June 2023: $1,775,000) and Bundall Storage Trust (30 June 2023: $2,850,000) were
fully repaid. These are included in the table above.
The BFNS Trust facility agreement has a term of 2 years and is interest bearing on commercial rates. The
receivable with the BFNS Trust have been classed as a current receivable in the consolidated statement
of financial position as it is expected to be repaid within 12 months of 30 June 2024. All other
outstanding balances are unsecured and interest free.
The remaining amounts owed by these entities relate to management fees and accrued interest not
paid at 30 June 2024 and 30 June 2023.
There have been no guarantees provided or received for any related party receivables or payables.
For the years ended 30 June 2024 and 30 June 2023, the Group has not recorded any impairment of
receivables relating to amounts owed by related parties.
Key management personnel compensation
Consolidated Group
2024
2023
$'000
$'000
Short-term employee benefits
4,626
4,571
Post-employment benefits
120
122
Equity settled short-term benefits
556
576
Equity settled long-term benefits
1,015
1,148
Other long-term benefits
490
546
Termination benefits
263
-
7,070
6,963
The amounts disclosed in the table are the amounts recognised as an expense during the reporting
period relating to key management personnel (KMP). Detailed remuneration disclosures are provided in
the Remuneration Report which is included in the Directors’ Report.
Key management personnel’s’ interest in the Equity Incentive Plan
Performance rights held by key management personnel under the Equity Incentive Plan for the year
ended 30 June 2024 and 30 June 2023 are listed below:
Date of grant
Assessment period
2024
Number
outstanding
2023
Number
outstanding
2022
1-July-20 to 30-June-23
-
561,700
2022
1-July-21 to 30-June-24
496,600
561,700
2023
1-July-22 to 30-June-25
514,500
595,100
2024
1-July-23 to 30-June-26
549,800
-
1,560,900
1,718,500
19.
COMMITMENTS AND CONTINGENCIES
Capital commitments
As at 30 June 2024, the Group held commitments to purchase four freehold investment properties and
five development sites in Australia for $89.4m (30 June 2023: three freehold investment properties and six
development sites for $69.4m).
As at 30 June 2024, the Group has contractual commitments in place for the construction of self-
storage centres in Australia for $249.6m (30 June 2023: $161.4m). (see note 11.4). $66.2m of these
commitments relate to assets held for sale at 30 June 2024 where the resultant commitment cash
outflow is not expected to be incurred by the Group.
The Group is also committed to invest $34.1m into the National Storage Ventures Fund.
There is no other capital expenditure contracted for at the end of the reporting period but not
recognised as a liability. There are no other contingent assets or liabilities for the Group.
Lease liability commitments
For details of lease liability commitments see note 10.7.
Guarantees and contingent liabilities
The Group has provided bank guarantees of $6.6m (2023: $6.8m). These are provided to third party
lessors and other related entities.
The Group did not have any other contingent liabilities as at 30 June 2024 or 30 June 2023.
Annual Report 2024
119
20.
EARNINGS PER STAPLED SECURITY (“EPS”)
Basic earnings per stapled security is calculated as net profit attributable to stapled security holders,
adjusted to exclude costs of servicing equity (other than distributions) divided by the weighted average
number of stapled securities on issue during the period under review.
Diluted earnings per stapled security adjust the figures used in the determination of basic earnings per
share to take into account:
•
The after-tax effect of interest and other financing costs associated with dilutive potential stapled
securities; and
•
The weighted average number of additional stapled securities that would have been outstanding
assuming the conversion of all dilutive potential stapled securities.
2024
cents
2023
cents
(restated)
Basic earnings per stapled security
16.90
25.75
Diluted earnings per stapled security
16.89
25.71
Reconciliation of earnings used in calculating earnings per stapled security
$’000 $’000
Net profit attributable to stapled security holders
230,271
320,400
No. of
securities
No. of
securities
(restated)
Weighted average number of securities on issue during the
year
1,361,883,416
1,236,914,113
Adjustment under AASB 133 to reflect discount to market
price on issue of new capital
348,043
7,414,878
Weighted average number of securities used to calculate
basic and diluted earnings per stapled security
1,362,231,459
1,244,328,991
Effects of dilution from issue of performance rights and
restricted securities
1,241,610
1,678,856
Weighted average number of securities for diluted earnings
per stapled security
1,363,473,069
1,246,007,847
As required by AASB 133 Earnings per share, for issues of capital raises during the year ended 30 June
2024 and 30 June 2023, the weighted average number of securities on issue used to calculate statutory
basic and diluted earnings per stapled security has been adjusted to reflect the difference between
the issue price and the fair value of securities prior to issue. No actual securities were issued relating to
this adjustment.
The weighted average number of stapled securities for the year ended 30 June 2023 used to calculate
basic and diluted earnings per stapled security has also been restated on this basis.
Diluted EPS is calculated by dividing the profit attributed to members by the weighted average number
of securities for basic earnings per stapled security plus the weighted average number of securities that
would be issued on conversion of all dilutive potential stapled securities into stapled securities.
21.
SHARE-BASED PAYMENTS
Executive remuneration plan
Under the Group’s Equity Incentive Plan, key management personnel (“KMP”) receive a component of
their short-term incentive (“STI”) and long-term incentive (“LTI”) remuneration in the form of share-based
payments.
Short-term incentive remuneration
The equity component of STI remuneration is structured through the issuance of restricted securities at
the end of a one-year assessment period, subject to satisfaction of pre-determined vesting conditions.
In the event that these conditions are not met, the restricted securities do not vest.
The maximum value of the STI payable under the FY24 award is set at 30 June 2023, with the number of
instruments to be granted calculated using the 30-day volume weighted average price (“VWAP”) to 30
June 2024.
For the year ended 30 June 2024, the Group has recognised $0.6m of share-based payment expense in
the consolidated statement of profit or loss for restricted securities expected to be issued under the FY24
STI award (30 June 2023: $0.6m).
Long-term incentive remuneration
The equity component of LTI remuneration is structured through the issuance of performance rights at
the commencement of a three-year LTI assessment period. Each performance right is a right to receive
one stapled security of the Group, subject to the satisfaction of pre-determined service and vesting
conditions. If these vesting conditions are not met, the performance rights will lapse. There is no
consideration payable by the participant upon vesting of the performance rights.
The following table illustrates the number of, and movements in, performance rights during the year:
Fair value of performance rights
Performance rights contain both a market vesting condition (TSR) and a non-market vesting condition
(EPS growth target). The fair value of performance rights containing a market vesting condition are
estimated at the date of grant using a Monte Carlo simulation and trinomial lattice combination, taking
into account the terms and conditions on which the performance rights were granted. The model
simulates the TSR and compares it with a group of principal competitors. It takes into account historical
and expected dividends, and share price volatility of the Group relative to that of its competitors so as
to predict the share performance.
The fair value of performance rights containing a non-market vesting condition (EPS growth target) are
estimated at the date of grant using a binomial model, taking into account the terms and conditions
on which the performance rights were granted.
Both models were prepared by an independent valuation expert.
2024
2023
No. of rights
No. of rights
Outstanding as at 1 July
1,718,500
1,123,400
Granted during the year
633,900
595,100
Vested during the year
(561,700)
-
Forfeited during the year
(229,800)
-
Outstanding at 30 June
1,560,900
1,718,500
Exercisable at 30 June
496,600
561,700
Annual Report 2024
121
The following table lists the model inputs used to determine the fair value at grant date of performance
rights issued under the Plan:
Grant date
Vesting
date
Share
price at
grant date
$
Expected
volatility
%
Dividend
yield
%
Risk-free
interest
rate
%
FY24 performance rights
22-Nov-21
30-Jun-24
2.43
30.22
3.37
0.96
FY25 performance rights
11-Nov-22
30-Jun-25
2.49
32.20
4.34
3.16
FY26 performance rights
02-Nov-23
30-Jun-26
2.03
22.00
5.42
4.31
The expected volatility reflects the assumption that the historical volatility over a period similar to the life
of the performance rights is indicative of future trends, which may not necessarily be the actual
outcome.
The weighted average fair value of performance rights granted during the year ended 30 June 2024
was $1.22 (year ended 30 June 2023: $1.61).
Expenses arising from performance rights
For the year ended 30 June 2024, the Group has recognised $0.6m of share-based payment expense in
the consolidated statement of profit or loss for performance rights granted (30 June 2023: $0.9m).
During the year ended 30 June 2024, Claire Fidler ceased to be a KMP and subsequently forfeited all
unvested performance rights. $0.2m of share-based payment expense previously recognised under
AASB 2 in respect of unvested performance rights has been reversed in the year ended 30 June 2024 as
a result. There were no other cancellations or modifications to the awards in 2023 or 2024.
22.
AUDITORS’ REMUNERATION
The auditor of the Group is Ernst & Young Australia.
2024
2023
$
$
Amounts received or due and receivable by Ernst & Young Australia for:
Category 1 – Fees for auditing the statutory financial report of the group
and any other group entity
716,881
712,094
Category 2 – Fees for assurance services that are required by legislation
to be provided by the auditor
-
-
Category 3 – Fees for other assurance services under other legislation or
contractual arrangements where there is discretion on service provider
40,200
38,200
Category 4 – Fees for other services
216,761
70,716
Total auditors’ remuneration
973,842
821,010
23.
INFORMATION RELATING TO THE PARENT ENTITY
Summary financial information
The individual financial statements for NSH, the parent entity, show the following aggregate amounts:
Guarantees entered into by the parent entity
The Group’s parent entity has provided bank guarantees of $2.4m (2023: $2.4m). These are provided to
third party lessors and other related entities. In addition, there are cross guarantees given by National
Storage Holdings Limited, National Storage (Operations) Pty Ltd, Southern Cross Storage Operations Pty
Ltd, and National Storage Pty Ltd as described in note 24. No deficiencies of assets exist in any of these
companies.
Contingent liabilities of the parent entity
The Group’s parent entity did not have any contingent liabilities as at 30 June 2024 or 30 June 2023.
24.
DEED OF CROSS GUARANTEE
As at 30 June 2024 and 30 June 2023, National Storage Holdings Limited, National Storage (Operations)
Pty Ltd, Southern Cross Storage Operations Pty Ltd and National Storage Pty Ltd are parties to a deed of
cross guarantee under which each company guarantees the debts of the others. By entering into the
deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report
and Directors’ report under ASIC Corporations (wholly-owned companies) instrument 2016/785 issued
by the Australian Securities and Investments Commission.
Set out below is a consolidated statement of comprehensive income and consolidated statement of
financial position of the entities that are parties to a deed of cross guarantee.
2024
2023
$’000
$’000
Current assets
176,096 122,620
Total assets
193,613 145,165
Current liabilities
(87,672) (21,560)
Total liabilities
(88,114) (22,298)
Net assets
105,499
122,867
Issued capital
194,253
190,186
Other reserves
2,146
2,420
Retained earnings / (deficit)
(90,900)
(69,739)
105,499
122,867
Loss after tax
(21,160)
(22,437)
Total comprehensive loss
(21,160)
(22,437)
Consolidated statement of comprehensive income
2024
2023
$'000
$'000
Profit before income tax
36,436
48,522
Income tax expense
(10,094)
(12,053)
Profit after income tax
26,342
36,469
Retained earnings at the beginning of the year
69,315
31,646
Dividends received
1,350
1,200
Retained earnings at the end of the year
97,007
69,315
Annual Report 2024
123
25.
EVENTS AFTER REPORTING PERIOD
For the period from 1 July 2024 to the date of this report the Group settled one storage centre
investment property, and four development sites for total consideration of $62.2m.
In July 2024, the Group increased the size of its NZD interest rate derivatives by $25m NZD and extended
the final maturity date to 23 June 2028.
In August 2024, the Group transacted $260m of new interest rate derivatives, comprising of interest rate
swaps and interest rate caps. These commence on 23 December 2024 and mature on 23 December
2026. The Group also entered into $260m of interest rate swaptions which commence on 23 December
2026 and mature on 23 December 2029.
Consolidated statement of financial position
2024
2023
$'000
$'000
Current assets
Cash and cash equivalents
28,577
21,797
Trade and other receivables
175,824
161,921
Inventories
1,109
1,528
Other current assets
10,600
10,129
Total current assets
216,110
195,375
Non-current assets
Trade and other receivables
135
135
Property, plant and equipment
1,383
1,168
Right of use assets
2,795
3,719
Investment properties
1,629,136 1,398,267
Investments
5,932
5,932
Intangibles
29,720
29,310
Deferred tax asset
10,642
8,810
Other non-current assets
-
7,294
Total non-current assets
1,679,743
1,454,635
Total assets
1,895,853
1,650,010
Liabilities
Current liabilities
Trade and other payables
13,779
20,785
Lease liabilities
10,557
10,240
Deferred revenue
14,750
15,404
Income tax payable
1,508
8,625
Provisions
5,130
4,731
Total current liabilities
45,724
59,785
Non-current liabilities
Trade and other payables
1,156
1,283
Lease liabilities
1,546,119
1,317,662
Provisions
9,448
9,359
Total non-current liabilities
1,556,723
1,328,304
Total liabilities
1,602,447
1,388,089
Net assets
293,406
261,921
Equity
Contributed equity
194,253
190,186
Other reserves
2,146
2,420
Retained profits
97,007
69,315
Total equity
293,406
261,921
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
As at 30 June 2024
Body corporates
Tax residency
Entity name
Entity type
Place of
incorporation
Equity
interest
Australian
or foreign
Foreign
jurisdiction
National Storage Holdings
Limited
Company
Australia
100%
Australian
N/A
National Storage
(Operations) Pty Ltd
Company
Australia
100%
Australian
N/A
Southern Cross Storage
Operations Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage Financial
Services Limited
Company
Australia
100%
Australian
N/A
Wine Ark Pty Ltd
Company
Australia
100%
Australian
N/A
Southern Cross Storage
Operations Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage Finance Pty
Ltd
Company
Australia
100%
Australian
N/A
NS Development Co 1 Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage No.2 Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage No.3 Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage Limited*
Company
New Zealand
100%
Australian
New Zealand
National Storage Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage
Developments Pty Ltd**
Company
Australia
100%
Australian
N/A
National Storage Investments
Pty Ltd
Company
Australia
100%
Australian
N/A
Runway Technologies Pty Ltd
Company
Australia
100%
Australian
N/A
National Storage Property
Trust
Trust
N/A
N/A
Australian
N/A
National Storage Victorian
Property Trust
Trust
N/A
N/A
Australian
N/A
National Storage New
Zealand Property Trust
Trust
N/A
N/A
Australian
N/A
National Storage Southern
Trust
Trust
N/A
N/A
Australian
N/A
National Storage Investment
Trust
Trust
N/A
N/A
Australian
N/A
National Storage Active
Investment Trust
Trust
N/A
N/A
Australian
N/A
National Storage Finance
Trust
Trust
N/A
N/A
Australian
N/A
* National Storage Limited is a tax resident of Australia and New Zealand.
** Strategic Storage Consulting Pty Ltd changed name to National Storage Developments Pty Ltd on 4 July 2024
Annual Report 2024
125
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of National Storage Holdings Limited, the
Directors state that:
1.
In the opinion of the Directors:
(a)
the financial statements and notes of the Group for the year ended 30 June 2024
are in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the consolidated entity’s financial position as
at 30 June 2024 and of its performance for the year ended on that date;
and
ii.
complying with Accounting Standards and the Corporations Regulations
2001;
(b)
the financial statements and notes also comply with International Financial
Reporting Standards as disclosed in note 2(b);
(c)
there are reasonable grounds to believe that NSR will be able to pay its debts as
and when they become due and payable;
(d)
as at the date of this declaration, there are reasonable grounds to believe that
the members of the Closed Group identified in Note 24 will be able to meet any
obligations or liabilities to which they are or may become subject, by virtue of the
Deed of Cross Guarantee; and
(e)
the consolidated entity disclosure statement of the Group for the year ended 30
June 2024 is true and correct.
2.
This declaration has been made after receiving the declarations required to be made
to the Directors by the Chief Executive Officer and Chief Financial Officer in
accordance with section 295A of the Corporations Act 2001 for the financial year
ended 30 June 2024.
On behalf of the Board,
Anthony Keane
Andrew Catsoulis
Non-Executive Chairman
Managing Director
21 August 2024
21 August 2024
Brisbane
Brisbane
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor’s report to the members of National Storage REIT
Report on the audit of the financial report
Opinion
We have audited the financial report of National Storage REIT (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2024, the consolidated statement of profit or loss, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, notes to the financial statements, including summary of material accounting policy
information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Investment property valuation
Why significant
How our audit addressed the key audit matter
Investment properties represent approximately
93% of the Group’s total assets. These assets
are carried at fair value, which is assessed by
the directors with reference to either external
independent property valuations or internal
valuations and are based on market conditions
existing at reporting date.
This was considered a key audit matter due to
the number of judgments required in
determining fair value. These judgments include
assessing: capitalisation rates; sustainable
occupancy; and stabilised EBITDA (earnings
before interest, tax, depreciation and
amortisation).
Disclosure relating to investment properties and
the associated significant judgments are
included in Notes 2(o), 3, 11.4, and 11.8 to the
financial report.
Our audit procedures included the following:
•
With the involvement of our real estate
valuation specialists, we assessed:
•
The suitability of the valuation
methodologies used;
•
The competence, qualifications and
objectivity of both the Group’s internal
valuers and external valuation experts;
and
•
The reasonableness of key assumptions
and inputs used in the valuations. These
assumptions and inputs included
capitalisation rates occupancy rates
including forecast occupancy levels, and
stabilised EBITDA.
•
Agreed source data used in the valuations to
supporting tenancy schedules and
accounting sub-ledgers;
•
Tested the mathematical accuracy of the
internal valuation model, including assessing
key valuation inputs with reference to those
applied by the external valuation experts
and where relevant we assessed the
reasonableness of comparable transactions
used in the valuation process;
•
Where relevant, we evaluated the movement
in the capitalisation rates, occupancy rates,
and stabilised EBITDA across the portfolio
based on our knowledge of the property
portfolio, comparable acquisition
transactions in the period, published
industry reports and comparable external
valuations; and
We considered the adequacy of disclosures in
relation to the valuation methods and principles
disclosed in Note 2(o) Summary of material
accounting policy information - Investment
properties, Note 3 Significant accounting
judgements, estimates and assumptions –
Revaluation of investment properties, Note 11.4
Investment properties and Note 11.8 Non-
financial assets fair value measurement.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2024 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001; and;
►
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
►
The financial report (other than the consolidated entity disclosure statement) that gives a true
and fair view and is free from material misstatement, whether due to fraud or error; and
►
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
Annual Report 2024
127
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 43 to 59 of the directors’ report for the
year ended 30 June 2024.
In our opinion, the Remuneration Report of National Storage REIT for the year ended 30 June 2024,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Wade Hansen
Partner
Brisbane
21 August 2024
Annual Report 2024
129
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Securities Exchange and not shown elsewhere in this
report is as follows. The information is current as at 29 July 2024 unless stated below:
(a) Distribution of equity securities
Analysis of numbers of ordinary fully paid stapled security holders by size of holding:
Holding
Total
holders
1
-
1,000
1,397
1,001
-
5,000
2,013
5,001
-
10,000
1,441
10,001
-
100,000
2,733
100,001
-
And over
150
Total
7,734
There were 400 holders of less than a marketable parcel of stapled securities, representing 12,490 units.
(b) Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities as at 15 July 2024 are listed below:
Stapled Securities
Name
Number
held
% of issued
securities
HSBC Custody Nominees (Australia) Limited
652,125,140
47.59
J P Morgan Nominees Australia Limited
242,304,499
17.68
Citicorp Nominees Pty Limited
166,967,417
12.18
BNP Paribas Nominees Pty Ltd
77,127,634
5.63
Perpetual Trustee Company Ltd
40,369,952
2.95
National Nominees Limited
28,103,058
2.05
HSBC Custody Nominees (Australia) Limited – A/C 2
19,608,964
1.43
IOOF Investment Services Ltd
5,322,397
0.39
Hooks Enterprise
3,400,000
0.25
Oakharbour Pty Ltd
3,400,000
0.25
Netwealth Investments Limited
2,999,077
0.22
BNP Paribas Nominees (NZ) Limited – A/C NZCSD
2,345,916
0.17
Leyshon Investments (Australia) Pty Ltd
2,252,449
0.16
Leendert Hoeksema
1,980,000
0.14
Brindle Super Pty Ltd
1,523,488
0.11
Merrill Lynch (Australia) Nominees Pty Ltd
1,298,211
0.09
Dorvell Pty Ltd
1,051,839
0.08
Green 9 Pty Ltd
1,020,408
0.07
Charter Hall Wholesale Management Ltd
1,000,000
0.07
Woodross Nominees Pty Limited
946,533
0.07
1,228,146,982
91.58
Unquoted equity securities
Number on
issue
Number of
holders
Performance rights
1,560,900
2
(c) Substantial shareholders
Substantial securityholders, as at 14 July 2024, are set out below:
Name
Number
held
Percentage
Vanguard Investments Australia Ltd
71,791,374
5.2%
(d) Voting rights
The voting rights attached to the ordinary fully paid stapled securities is one vote per stapled security.
Annual Report 2024
131
National Storage REIT is listed on the Australian
Securities Exchange under the code NSR.
NATIONAL STORAGE REIT SECURITIES
A stapled security comprises:
• one share in National Storage Holdings Limited; and
• one unit in the National Storage Property Trust,
stapled and traded together as one stapled security.
CONTACT DETAILS
All changes of name, address, Tax File Number,
payment instructions and document requests should
be directed to the registry.
SECURITIES REGISTRY
Computershare Investor Services Pty Limited
GPO Box 2975 Melbourne VIC 3001 Australia
Telephone: 1300 850 505 (Australia only)
International: +61 (0) 3 9415 4000
Email using the online form:
computershare.com/Investor/#Contact/Enquiry
ELECTRONIC INFORMATION
By registering your email address, you can then receive
via email notifications and announcements, distribution
statements, taxation statements and annual reports.
SECURE ACCESS TO YOUR SECURITYHOLDING
You will need to have your securityholder reference
number or holder identification number (SRN/HIN)
available to access your holding details.
ONLINE
You can access your securityholding information
via link in the Investor Centre section of the
corporate website, nationalstorageinvest.com.au,
or via the Investor Centre link on registry website at
computershare.com.au. To view your securityholding,
you will need your SRN/HIN and will be asked to verify
your registered postcode (inside Australia) or your
country of residence (outside Australia).
PHONE
You can confirm your holding balance, request forms
and access distribution and trading information
by phoning: 1300 850 505 (Australia only) or calling
International: +61 (0) 3 9415 4000 (outside Australia).
DISTRIBUTION DETAILS
Distributions are expected to be paid within 8 to
10 weeks following the end of each semi annual
distribution period, which occur in June and December
each year. To ensure timely receipt of your distributions,
please consider the following:
DIRECT CREDIT
NSR encourages securityholders to receive distribution
payments by direct credit. If you wish to register for
direct credit or update your payment details, log in
to your holding online or telephone the registry on
1300 850 505 for assistance.
TAX FILE NUMBER (TFN)
You are not required by law to provide your TFN,
Australian Business Number (ABN) or exemption status.
However, if you do not provide your TFN, ABN or
exemption, withholding tax at the highest marginal rate
for Australian resident members may be deducted from
distributions paid to you. If you wish to update your TFN,
ABN or exemption status, log in to your holding online or
telephone the registry on 1300 850 505 for assistance.
UNPRESENTED CHEQUES
If you believe you have unpresented cheques, please
contact the registry and request a search to assist in
recovering your funds. If you wish to register for direct
credit or update your payment details, log in to
your holding online or telephone the registry on
1300 850 505 for assistance.
AMMA STATEMENT AND TAX GUIDE
The annual attribution managed investment trust
member annual statement (AMMA Statement) and Tax
Guide are dispatched to securityholders in September
each year. A copy of the Tax Guide is available at
nationalstorageinvest.com.au.
INVESTOR FEEDBACK
If you have any fund specific queries or feedback
please telephone NSR Investor Relations on 1800 683 290.
Please direct any complaints in writing to NSR Company
Secretary at GPO Box 3239, Brisbane QLD 4001, Australia
or via the investor feedback form available at:
nationalstorageinvest.com.au/investor-feedback/.
The dates listed above are indicative only
and subject to change.
AUGUST
Full Year Results and Annual Report released
SEPTEMBER
Distribution paid for the six months ended 30 June
Annual AMMA Statement released
Notice of Annual General Meeting released
OCTOBER
Annual General Meeting
FEBRUARY
NSR CALENDAR 2024 - 2025
RESPONSIBLE ENTITY OF NSPT
National Storage Financial Services Limited (NSFL)
ACN 600 787 246 AFSL 475 228
Level 16, 1 Eagle Street, Brisbane QLD 4000
DIRECTORS
Anthony Keane
Andrew Catsoulis
Howard Brenchley
Inma Beaumont
Scott Smith
COMPANY SECRETARY
Katherine Hammond
REGISTERED OFFICE
Level 16, 1 Eagle Street, Brisbane QLD 4000
PRINCIPAL PLACE OF BUSINESS
Level 16, 1 Eagle Street, Brisbane QLD 4000
SHARE REGISTRY
Computershare Investor Services Pty Limited
452 Johnston Street, Abbotsford VIC 3067
Stapled Securities are quoted on the
Australian Securities Exchange (ASX)
AUDITORS
Ernst & Young, 111 Eagle Street, Brisbane QLD 4000
National Storage Holdings Limited
ACN 166 572 845 (“NSH” or the “Company”)
National Storage Property Trust
ARSN 101 227 712 (“NSPT”)
together form the stapled entity National Storage
REIT (“NSR” or the “Consolidated Group”)
CORPORATE
DIRECTORY
Half Year Results released
Distribution paid for six months ended 31 December
INVESTOR
RELATIONS
Annual Report 2024
133