Growth and yield outlook attractive for National Storage (NSR)

Growth and yield outlook attractive for National Storage (NSR). We are very positive on National Storage (ticker NSR) which is a stapled security. NSR is Australia's second largest self-storage service provider with a national network of mainly freehold facilities (some leasehold) that are used by both the residential and small commercial markets for short to medium-term off-site storage. We believe NSR will grow its earnings strongly in two ways over the next five years: 1) through improving the utilisation of its existing facilities that are currently underutilised in many instances; and 2) through acquiring on attractive multiples other existing centres from mum & dad operators that are looking to exit the industry as they reach retirement age. As a result, we believe NSR can grow EPS at a high single digit rate over the next five years with relatively low risk. We have it on an initial prospective yield of over 6% and see that yield as growing in-line with EPS.