Welcome to the team!
As a medium term holder (5+ years) I've done reasonably well, although there are ups and downs along the way.
A couple of points to add to your comments:
The PE for NSR isn't as relevant in other businesses as it includes revaluations of property as profit. These are all non-cash profits so skew the PE a bit. A better measurement is Price to Funds from Operations (P/FFO) which is about 21 right now. As they pay out about 95% of free cash the inverse of this gives you the Dividend/Distribution Yield of 4.5%. Not a bad yield in years gone by, but if you're getting 4% in the bank, it may look less attractive.
The business itself is very solid. I like to think of it as one of those sticky businesses that are hard to replicate. To build out a network in all the locations would be very difficult as well as the brand and image. Then you have the switching costs. Imagine you have a box full of stuff and your monthly rent is $100. Inflation is running at 7% so you get a letter in the mail saying it'll now be $107. Are you going to shop around to find a new storage unit and spend a whole day moving all that stuff from one to the other to save yourself 7 bucks a month? Probably not. So the rates can increase by small amounts over time and not many customers will notice or care.
Economies of scale apply to this industry. The more locations you have the more central costs can be spread out. There are only 2 big players in Australia, NSR and Storage King (owned by Abacus/ABP, another of my holdings). Smaller players exist but are slowly being acquired by these two. A roll-up strategy is working well for both. Old locations can be refurbished adding to valuation. Brand new locations in inner cities are hard to come by. Even locations in outer suburbs and regional cities can be hard to find.
NSR was also an acquisition target a few years ago and I believe it still might be. Three bidders emerged in late 2019 but it all fell apart with Covid. One was US-listed Public Storage (NYSE
SA) who have done a similar strategy in the US for many years and looked to add NSR. The other two were private equity buyers if I recall correctly. Interest rates are much higher now so the mathematics of the deal don't quite work as well. But with the AUD lower, a US player may still take a look.
There are some risks of course. I'm not sure what a recession would do to the business. If you lose your job you aren't going to want to pay monthly fees to store excess stuff. Higher interest rates will eat into cash flows too. And watch out for capital raises every now and then as they go on a buying spree. These seem to occur every couple of years and put a lid on the stock price for a while. I prefer to see share count going down in most cases but these companies tend to have mindset that they're building an empire. I've tipped in several times over the years at the discount price. To their credit they treat retail shareholders reasonably well in terms of entitlement, although like most will give the institutional funds the lion's share.
Overall it's a good company to have in your portfolio. I watch the stock price and look to add on any dips that happen now and then. Collect your distributions along the way and enjoy life with them!
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