R
NATIONAL STORAGE PROPERTY TRUST (NSPT) CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2025
CONTENTS
CORPORATE INFORMATION 3
DIRECTORS' REPORT 4
AUDITOR'S INDEPENDENCE DECLARATION 7
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 8
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 9
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 11
CONSOLIDATED STATEMENT OF CASH FLOWS 12
NOTES TO THE FINANCIAL STATEMENTS 13
DIRECTORS' DECLARATION 54
INDEPENDENT AUDITOR'S REPORT 55
CORPORATE INFORMATIONNational Storage Property Trust ARSN 101 227 712 ("NSPT")1
Responsible Entity of NSPT
National Storage Financial Services Limited ("the Responsible Entity"), a wholly owned subsidiary of
National Storage Holdings Limited ACN 600 787 246
AFSL 475 228
Level 16, 1 Eagle Street
Brisbane QLD 4000
Directors - the Responsible Entity
Andrew Catsoulis Anthony Keane Howard Brenchley Scott Smith Inmaculada Beaumont
Simone Haslinger (appointed 24 October 2024)
Joint Company Secretaries - the Responsible Entity
Katherine Hammond
Tanya Mangold (appointed 2 June 2025)
Registered office
Level 16, 1 Eagle Street
Brisbane QLD 4000
Principal place of business
Level 16, 1 Eagle Street
Brisbane QLD 4000
Unit registry
Computershare Investor Services Pty Limited 452 Johnston Street
Abbotsford VIC 3067
Auditor
Ernst & Young 111 Eagle Street
Brisbane QLD 4000
1 NSPT is stapled to National Storage Holdings Limited ("NSH") to form National Storage REIT ("NSR"). NSR stapled securities are quoted on the Australian Securities Exchange ("ASX") - trading code ASX:NSR.
DIRECTORS' REPORTThe Group is a Consolidated Group of Trusts which hold investment properties in Australia and New
Zealand. The units in NSPT are stapled to the shares of National Storage Holdings Limited ("NSH") to form
National Storage REIT ("NSR"). NSR is quoted 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 NSH and the number of units in NSPT shall be equal and that the shareholders and unitholders be identical. The Responsible Entity of the Trust must at all times act in the best interest of NSPT. The stapling arrangement will continue until either the winding up of NSH or NSPT, or either entity terminates the stapling arrangements.
The Directors of National Storage Financial Services Limited as responsible entity of NSPT present their report together with the financial statements of National Storage Property Trust ("the Group") for the financial year ended 30 June 2025 ("Reporting Period").
DIRECTORS National Storage Financial Services Limited - the Responsible EntityThe Directors of the Responsible Entity in office during the Reporting Period and continuing as at the
date of this Directors' Report are set out below.
Andrew Catsoulis Director
Anthony Keane Director Howard Brenchley Director Scott Smith Director Inmaculada Beaumont Director
Simone Haslinger Director (appointed 24 October 2024)
PRINCIPAL ACTIVITIESNSPT and its sub-trusts hold investment properties in Australia and New Zealand for the purpose of earning rental returns and generating capital growth.
REVIEW AND RESULTS OF OPERATIONSThe Financial Statements are prepared in compliance with Australian Accounting Standards. Users of the financial information should familiarise themselves with the Corporate Information and Basis of Preparation in Notes 1 and 2 in the Financial Statements.
Operating results
The Group achieved IFRS profit after tax for the period of $208.7m (30 June 2024: $201.3m).
Total revenue increased by 15% to $186.3m (30 June 2024: $162.5m) in FY25 primarily driven by increased rental income from investment properties acquired during the current and prior years. In addition, the Group received $5.4m revenue classified as contracts with customers from National Storage Ventures Trust ("NSVT"), a related party.
Gains from fair value adjustments totalled $99.7m for the year (30 June 2024: $100.2m).
Capital management
Cash and cash equivalents as at 30 June 2025 were $33.8m (30 June 2024: $25.2m). Net operating cashflow for the year increased by $23.9m to $174.1m (30 June 2024: $150.2m).
The Group invested $52.0m in the NSVT joint venture during the year and received proceeds of $319.0m following the sale of freehold investment property to NSVT and other third parties.
DIRECTORS' REPORTAn interim distribution of 5.5 cents per stapled security ($76.0m) was paid on 3 March 2025 with an estimated final distribution of 5.6 cents per stapled security ($77.9m) declared on 18 June 2025 with a payment date of 2 September 2025.
NSR continues to offer a Distribution Reinvestment Plan ("DRP") enabling eligible securityholders to receive part or all of their distribution by way of stapled securities rather than cash.
For the December 2024 interim distribution approximately 28% of eligible securityholders (by number of securities) elected to receive their distributions as securities totalling approximately $21.2m. The DRP price was set at $2.1982 which resulted in 9,635,243 new securities being issued.
The June 2025 final distribution has seen approximately 37% of eligible securityholders (by number of securities) elect to receive their distributions as securities totalling approximately $28.9m. The DRP price was set at $2.3916 which will result in approximately 12.1m 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 2025, the Group refinanced existing facilities which previously had maturities in FY25 and FY26, issuing its inaugural
$300m 3.625% 5 year Exchangeable Notes, and negotiated $325m of additional AUD facilities and
$15m of additional NZD facilities. As a result of these initiatives, Group finance facilities increased to
$2.5bn at 30 June 2025 (30 June 2024: $1.8bn) with approximately $0.6bn of committed undrawn facilities available.
The Group's weighted average debt tenor at the Reporting Date is 2.9 years (2024: 3.3 years). NSR's gearing level as at 30 June 2025 was 33.0% (2024: 26.6%) against a target gearing range of 25% - 40%, providing flexibility for the Group to act expeditiously on acquisition and development opportunities as they arise.
The Group utilises interest rate derivatives as part of its risk management strategy to manage exposure to interest rate fluctuations. As at the Reporting Date, interest rate derivatives totalling $1,113 million were in place (2024: $596 million) with expiry dates ranging from July 2025 to September 2030.
Acquisitions and revaluation of investment properties
The Group 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. The Group 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
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.
The Group has executed on its focused acquisition strategy with 12 new storage centres, and 16 development sites acquired during the reporting period, for a total of $350m.
The Group re-values all assets each Reporting Period. For the year ending 30 June 2025, this process has been undertaken by external independent valuers. The valuers have performed full property valuations for a third of the portfolio, and independent desktop assessments for the remaining assets. Following this process, the weighted average primary capitalisation rate of the Group's portfolio has decreased to 5.84% (30 June 2024: 5.91%) and the value of the 30 June 2025 portfolio increased by $117.5m.
DIRECTORS' REPORT SIGNIFICANT EVENTS AFTER BALANCE SHEET DATEFor the period from 1 July 2025 to the date of this report the Group purchased three storage centre investment properties for total consideration of $39.8m.
The Group completed the sale of freehold investment property classified as assets held for sale at 30 June 2025 receiving proceeds of $2.8m.
ROUNDINGThe amounts contained in this report and in the financial report have been rounded to the nearest
$100,000 (unless otherwise stated) under the option available under ASIC Corporations (Rounding in Financial / Directors' Reports) Instrument 2016/191. The Group is an entity to which the class order applies.
AUDITOR'S INDEPENDENCE DECLARATIONA copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 7.
FEES PAID TO AND INTERESTS HELD IN NSPT BY THE RESPONSIBLE ENTITY OR ITS ASSOCIATESFees paid to the Responsible Entity and its associates from NSPT during the year are disclosed in the Consolidated Statement of Comprehensive Income and are detailed in note 16 to the financial statements.
No fees were paid to the Directors of the Responsible Entity during the year out of NSPT.
This report is made on 21 August 2025 in accordance with a resolution of the Responsible Entity and is signed for and on behalf of the Responsible Entity.
Anthony Keane Andrew Catsoulis
Director Director
National Storage Financial Services Limited National Storage Financial Services Limited Brisbane Brisbane
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 Financial Services Limited as responsible entity of National Storage Property Trust and its controlled entitiesAs lead auditor for the audit of the financial report of National Storage Property Trust and its controlled entities for the financial year ended 30 June 2025, I declare to the best of my knowledge and belief, there have been:
No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
No contraventions of any applicable code of professional conduct in relation to the audit; and
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 Property Trust and the entities it controlled during the financial year.
Ernst & Young
Wade Hansen Partner Brisbane
21 August 2025
CONSOLIDATED STATEMENT OF PROFIT OR LOSSFor the year ended 30 June 2025
Notes | 2025 $m | 2024 $m | |
Revenue from rental income | 180.3 | 161.7 | |
Revenue from contracts with customers | 5.4 | - | |
Interest income | 0.6 | 0.8 | |
Total revenue | 186.3 | 162.5 | |
Management fees | (4.9) | (4.4) | |
Other operational expenses | (5.3) | (5.4) | |
Finance costs | 5 | (64.0) | (48.1) |
Share of profit from joint venture | 11 | 1.1 | 0.7 |
Restructuring and other costs | (3.5) | (3.6) | |
Gain from fair value adjustments | 6 | 99.7 | 100.2 |
Profit before income tax | 209.4 | 201.9 | |
Income tax expense | 7 | (0.7) | (0.6) |
Profit after income tax | 208.7 | 201.3 | |
Profit for the year attributable to: | |||
Unitholders of National Storage Property Trust | 208.7 | 201.3 | |
Basic earnings per unit (cents) | 18 | 15.08 | 14.76 |
Diluted earnings per unit (cents) | 18 | 15.07 | 14.76 |
The above Consolidated Statement of Profit or Loss should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2025
2025 $m | 2024 $m | |
Profit after income tax | 208.7 | 201.3 |
Other comprehensive income | ||
Items that may be reclassified to profit or loss | ||
Exchange differences on translation of foreign operations | 4.8 | (2.4) |
Net loss on cash flow hedges | (4.4) | (5.1) |
Other comprehensive gain / (loss) for the year, net of tax | 0.4 | (7.5) |
Total comprehensive income for the year | 209.1 | 193.8 |
Total comprehensive income for the year attributable to: | ||
Unitholders of National Storage Property Trust | 209.1 | 193.8 |
As at 30 June 2025
Notes | 2025 $m | 2024 $m | |
ASSETS | |||
Current assets | |||
Cash and cash equivalents | 8.1 | 33.8 | 25.2 |
Trade and other receivables | 8.2 | 10.2 | 2.6 |
Assets held for sale | 9.1 | 2.8 | 142.5 |
Other current assets | 8.3 | 1.4 | 3.6 |
Total current assets | 48.2 | 173.9 | |
Non-current assets | |||
Investment properties | 9.2 | 5,248.4 | 4,671.4 |
Investment in joint venture | 11 | 53.1 | - |
Other non-current assets | 8.3 | 15.5 | 30.4 |
Total non-current assets | 5,317.0 | 4,701.8 | |
Total assets | 5,365.2 | 4,875.7 | |
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 8.4 | 57.6 | 169.9 |
Interest-bearing loans and borrowings | 8.5 | 307.3 | - |
Lease liabilities | 8.7 | 0.9 | 0.9 |
Deferred revenue | 0.1 | 0.1 | |
Distribution payable | 15 | 77.9 | 75.4 |
Other liabilities | 8.6 | - | 0.5 |
Total current liabilities | 443.8 | 246.8 | |
Non-current liabilities | |||
Interest-bearing loans and borrowings | 8.5 | 1,583.7 | 1,395.5 |
Lease liabilities | 8.7 | 18.3 | 18.4 |
Deferred tax liabilities | 7 | 7.5 | 6.7 |
Other liabilities | 8.6 | 18.7 | 13.8 |
Total non-current liabilities | 1,628.2 | 1,434.4 | |
Total liabilities | 2,072.0 | 1,681.2 | |
Net assets | 3,293.2 | 3,194.5 | |
EQUITY | |||
Contributed equity | 12 | 2,016.7 | 1,973.2 |
Retained earnings | 1,274.3 | 1,219.5 | |
Foreign currency translation reserve | 13 | 0.5 | (4.3) |
Cash flow hedge reserve | 13 | 1.7 | 6.1 |
Total equity | 3,293.2 | 3,194.5 |
For the year ended 30 June 2025
Attributable to unitholders of National Storage Property Trust
Contributed | Retained | Foreign currency translation | Cash flow hedge | Total | |
Notes | equity $m | earnings $m | reserve $m | reserve $m | equity $m |
Balance at 1 July 2024 | 1,973.2 | 1,219.5 | (4.3) | 6.1 | 3,194.5 |
Profit for the year | - | 208.7 | - | - | 208.7 |
Other comprehensive (income) / loss | - | - | 4.8 | (4.4) | 0.4 |
Total comprehensive income | - | 208.7 | 4.8 | (4.4) | 209.1 |
Issue of units | 43.6 | - | - | - | 43.6 |
Costs associated with issue of units | (0.1) | - | - | - | (0.1) |
Distributions 15 | - | (153.9) | - | - | (153.9) |
43.5 | (153.9) | - | - | (110.4) | |
Balance at 30 June 2025 | 2,016.7 | 1,274.3 | 0.5 | 1.7 | 3,293.2 |
Balance at 1 July 2023 | 1,929.2 | 1,168.4 | (1.9) | 11.2 | 3,106.9 |
Profit for the year | - | 201.3 | - | - | 201.3 |
Other comprehensive income | - | - | (2.4) | (5.1) | (7.5) |
Total comprehensive income | - | 201.3 | (2.4) | (5.1) | 193.8 |
Issue of units | 44.1 | - | - | - | 44.1 |
Costs associated with issue of units | (0.1) | - | - | - | (0.1) |
Distributions 15 | - | (150.2) | - | - | (150.2) |
44.0 | (150.2) | - | - | (106.2) | |
Balance at 30 June 2024 | 1,973.2 | 1,219.5 | (4.3) | 6.1 | 3,194.5 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 30 June 2025
Notes | 2025 $m | 2024 $m | |
Operating activities | |||
Receipts from customers | 191.9 | 163.8 | |
Payments to suppliers and employees | (18.4) | (14.6) | |
Interest received | 0.6 | 1.0 | |
Net cash flows from operating activities | 8.1 | 174.1 | 150.2 |
Investing activities | |||
Purchase of investment properties | (144.9) | (204.7) | |
Proceeds on sale of investment property | 319.0 | - | |
Improvements to investment properties | (9.8) | (5.8) | |
Development of investment properties under construction | (425.2) | (248.6) | |
Development of assets classified as held for sale at 30 June 2024 | (16.8) | - | |
Distribution received from joint venture | - | 3.2 | |
Investments in joint venture | (52.0) | - | |
Net cash flows used in investing activities | (329.7) | (455.9) | |
Financing activities | |||
Distributions paid to unitholders | 15 | (104.8) | (102.4) |
Costs associated with issue of units | (0.1) | (0.1) | |
Proceeds from borrowings | 8.5 | 1,258.7 | 738.4 |
Repayment of borrowings | 8.5 | (771.8) | (285.1) |
Borrowings from related party | 16 | - | 3.5 |
Repayment of borrowings from related party | 16 | (128.4) | - |
Payment of principal and interest on lease liabilities | 8.7 | (0.9) | (0.9) |
Interest and other finance costs paid | 5 | (88.5) | (64.7) |
Net cash flows from financing activities | 164.2 | 288.7 | |
Net increase / (decrease) in cash and cash equivalents | 8.6 | (17.0) | |
Cash and cash equivalents at 1 July | 25.2 | 42.2 | |
Cash and cash equivalents at 30 June | 8.1 | 33.8 | 25.2 |
The above Consolidated Statement of Cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE FINANCIAL STATEMENTSFor the year ended 30 June 2025
CORPORATE INFORMATION
The Group is a Consolidated Group of Trusts which hold investment properties in Australia and New
Zealand. The units in NSPT are stapled to the shares of National Storage Holdings Limited ("NSH") to form
National Storage REIT ("NSR"). NSR is quoted 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 NSH and the number of units in NSPT shall be equal and that the shareholders and unitholders be identical. The Responsible Entity of the Trust must at all times act in the best interest of NSPT. The stapling arrangement will continue until either the winding up of NSH or NSPT, or either entity terminates the stapling arrangements.
The financial report of Group for the year ended 30 June 2025 was approved on 21 August 2025, in accordance with a resolution of the Directors the Responsible Entity.
The nature of the operations and principal activities of the Group are described in the Directors' Report.
SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION
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. NSPT 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 hundred thousand dollars ($100,000) unless otherwise stated.
The accounting policies applied by NSPT in these financial statements are the same as the 30 June 2024 financial statements except for the accounting policies impacted by new or amended accounting standards detailed in this note.
The Group presents only financial information relating to the NSPT Group within these financial statements. A separate financial report for NSR has also been prepared for the year ended 30 June 2025, this is available at https://www.nationalstorageinvest.com.au.
Deficiency of net current assets
As at 30 June 2025, the Group had an excess of current liabilities over current assets of $395.6m (30 June 2024: $72.9m).
This deficit primarily relates to the classification of the five-year term Exchangeable Notes (held at fair value of $307.3m at 30 June 2025) as a current liability. The Notes have a contractual tenor of five years and a final maturity date of 19 September 2029. Under the terms of the Notes, Noteholders can request to convert the Notes at any time into NSR stapled securities. NSR can elect to settle any such Exchange Request by way of NSR stapled securities or cash.
In the event that NSR elected to settle an Exchange Request via the issue of stapled securities, there would be no cash outflow. The Group held undrawn committed debt facilities of $604.9m at 30 June 2025 all of which have tenor of greater than one year.
The Group has payables of $28.7m due to National Storage Holdings Limited (a related party entity) and its subsidiaries, which are not expected to fall due within the period (30 June 2024: $144.5m).
The Group generated operating cash flows of $174.1m for the year ended 30 June 2025 (30 June 2024:
$150.2m). Sufficient cash inflows are expected to enable all liabilities to be paid when due throughout the next financial year. The Group's gearing levels at 30 June 2025 were 33.0% (30 June 2024: 26.6%).
The financial report has been prepared on a going concern basis as the Directors of the Responsible Entity believe the Group will continue to generate operating cash flows and has available undrawn committed debt facilities to meet all payment obligations in the ordinary course of business.
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.
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.
The Group issued Exchangeable Notes for the first time during the year ended 30 June 2025 and has applied AASB 9 Financial Instruments in relation to this transaction. The accounting policies related to the Group's treatment of Exchangeable Notes is provided in Note 2(i).
Other standards, amendments and interpretations
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, interpretations and sustainability standards issued but not yet effective
Australian Accounting Standards, Interpretations and sustainability 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 period ended 30 June 2025 are outlined in the following table:
Reference
Title
Summary and impact on Group financial report
Application date of standard
Application date for Group
AASB S2 (a
Sustainability Standard not an Accounting Standard)
Climate-related Disclosures (mandatory)
AASB S2 establishes principles for sustainability-related financial disclosures. This includes the disclosure of information about the Group's exposure and response to climate-related risks and opportunities, and the governance, oversight, and risk management arrangements that an entity has in place. In addition, the disclosure of performance in relation to climate-related metrics and targets is required.
1 January 2025
1 July 2025
In the first annual reporting period in which an entity applies AASB S2, the entity is not required to disclose:
AASB 2024-2
Amendments to AASB's -
These amendments to AASB 7 and AASB 9 Financial Instruments:
1 January 2026
1 July 2026
Comparative information
Scope 3 greenhouse gas emissions
Reference
Title
Summary and impact on Group financial report
Application date of standard
Application date for Group
Classification and Measurement of Financial Instruments
The new requirements will be applied retrospectively with an adjustment to opening retained earnings.
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.
1 January 2027
1 July 2027
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.
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 2028
1 July 2028
Clarify that a financial liability is derecognised on the 'settlement date', i.e., when the related obligation is discharged, cancelled, expires or the liability otherwise qualifies for derecognition.
For classification of a financial asset, clarify how to assess contractual cash flow characteristics that include environmental, social and governance linked features and other similar contingent features
Clarify how non-recourse features and contractually linked instruments are assessed for the purpose of applying the SPPI test when determining the measurement basis of financial assets.
Require additional disclosures in AASB 7 for financial assets and liabilities with contractual terms that reference a contingent event.
Basis of consolidation
The consolidated financial statements of NSPT comprises the consolidated group consisting of the parent entity, sub-trusts, and subsidiary.
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 (g)).
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 or joint 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.
Equity method
Under the equity method, the investment in 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 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 joint venture. Any change in Other Comprehensive Income ("OCI") of those investees is presented as part of the Group's OCI. 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 consolidated statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The aggregate of the Group's share of profit or loss from 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 joint ventures.
The financial statements of 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 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 joint venture and its carrying value, then recognises the loss as 'Share of profit or loss of joint venture' 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.
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 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 less any amount contractually refundable to customers 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, considering 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.
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. 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 the tax credits and tax losses can be utilised.
Goods and services tax ("GST")
Revenue, expenses, assets, and liabilities are recognised net 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 and the GST component of cash flows arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority is classed as part of operating cash flows.
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 OCI.
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 items recognised in OCI or profit or loss are also recognised in OCI or profit or loss).
Group entities
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 OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in profit or loss.
Business combinations and goodwill
The Group accounts for a transaction as a business combination if it meets the definition under AASB 3, 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. In order to determine if these are an integrated set of activities, an assessment of minimum business requirements and what substantive processes have been acquired, is applied.
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.
Leases
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 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.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank, 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.
Financial assets
Initial recognition and measurement
At initial recognition, financial assets are classified as subsequently 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 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 OCI
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 OCI. 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.
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;
the Group has transferred substantially all the risks and rewards of the asset; or
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.
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, Exchangeable Notes, 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. 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.
Exchangeable notes issued by the Group have been designated as financial liabilities at fair value through profit or loss.
Subsequent to initial recognition, Exchangeable Notes are subject to a mark to market valuation at each reporting period. Fair value gains and losses are recognised directly in profit or loss.
Financial liabilities art amortised cost
After initial recognition, loans and borrowings (except for exchangeable notes) 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.
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.
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 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.
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 fair
value. 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 geographical area of operations; or
Is a subsidiary acquired exclusively with a view to resale.
Investment properties
Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, 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 a proxy 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 typically 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 the year ended 30 June 2025, the Group has obtained external valuations for one third of the Group portfolio and independent desktop assessments completed by external valuers for the remaining assets.
For properties subject to an external independent valuation, management verify all major inputs to the valuation and review the results with the independent valuer.
The Responsible Entity has outsourced completion of the internal valuations to the NSH Group Board under a management agreement. These 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 with no future economic benefit 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.
Impairment of assets
Non-financial 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). Nonfinancial 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.
Contributed equity
Units 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.
Distribution to unitholders
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.
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 hundred thousand dollars unless otherwise specified.
Parent entity financial information
The financial information for the parent entity, NSPT, disclosed in note 20 has been prepared on the same basis as the consolidated financial statements, except in relation to investments in subsidiaries which are accounted for at cost in the financial statements of NSPT.
Fair value measurement
The Group measures financial instruments, such as derivatives, Exchangeable Notes and nonfinancial 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 nonfinancial 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 8.8 and 9.3.
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, and the disclosure of contingent assets and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.
Other disclosures relating to the Group's
exposure to risks and uncertainties include:
Capital management (note 15)
Financial instruments risk management and policies (notes 8.8, 14)
Sensitivity analyses disclosures (notes 9.3, 14).
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 2025 and 30 June 2024, the Group has assessed that all of its storage centre acquisitions do not meet the definitions set out in AASB 3 and are therefore accounted for as purchases of investment property per AASB 140.
Property lease classification - Group as lessor The Group has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements that it retains substantially all the risks and rewards incidental to ownership of these properties and accounts for the contracts as operating leases.
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 control of the Group. 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. For the year ended 30 June 2025, the Group has
obtained external valuations for one third of the Group portfolio and independent desktop reviews for the remaining two thirds.
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 9.3.
SEGMENT INFORMATION
The Group has identified its operating segments based on the internal management information used by the Managing Director of NSR, the Group's chief decision maker.
The Group operates wholly within one business segment being the ownership of storage centres in Australia and New Zealand. The operating results presented in the consolidated statement of profit or loss represent the same segment information as reported to the Responsible Entity of NSPT. 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
2025
$m
2024
$m
Revenue from rental income and external customers
Australia
166.0
142.2
New Zealand
19.7
19.5
Total
185.7
161.7
The revenue information above excludes interest income and is based on the location of storage centres.
2025
$m
2024
$m
Non-current operating assets
Australia
4,732.7
4,157.2
New Zealand
515.7
514.2
Total
5,248.4
4,671.4
Non-current assets for this purpose consists of investment properties. 91% of revenue received was from the NSH Group (2024: 93%), whilst 3% of revenue received was from the National Storage Ventures Sub Trust 1. Both entities are related parties of the Group.
FINANCE COSTS
2025
$m
2024
$m
Interest on borrowings
54.9
43.8
Transaction costs on issue of Exchangeable Notes
8.5
6.9
-
Reclassification from cash flow hedge reserve to
consolidated statement of profit or loss
13
1.4
3.5
Interest on lease liabilities
0.8
0.8
64.0
48.1
FAIR VALUE ADJUSTMENTS
2025
$m
2024
$m
Gains / (losses) for the year in profit or loss
Realised losses - lease diminution of leasehold property
(0.1)
(0.1)
Unrealised gains associated with investment property
122.6
98.1
Change in fair value of Exchangeable Notes
(7.3)
-
Change in fair value of derivatives
(15.5)
2.2
99.7
100.2
For the year ended 30 June 2025, fair value gains associated with investment property include $4.0m of gains realised from the sale of investment property and $1.1m of unrealised gains recognised on transfer of investment property to assets held for sale.
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 2025 and 30 June 2024 are:
Notes | 2025 $m | 2024 $m | |
Consolidated statement of profit or loss | |||
Current tax | (1.0) | (2.9) | |
Deferred tax | 1.7 | 3.5 | |
Total income tax expense | 0.7 | 0.6 | |
Reconciliation of tax expense and accounting profit multiplied by | |||
Australia's domestic tax rate for 2025 and 2024: | |||
Profit before tax | 209.3 | 201.9 | |
Deduct non-taxable profit from Trusts owning Australian properties | (272.1) | (198.0) | |
Accounting (loss) / profit before income tax | (62.8) | 3.9 | |
Tax at the Australian tax rate of 30% (2024: 30%) | (18.8) | 1.2 | |
Deductible / non-assessable amounts | (0.8) | (1.0) | |
Non-deductible / assessable expenses | 19.6 | 0.4 | |
Effect of lower tax rates in New Zealand | 0.7 | - | |
Income tax expense | 0.7 | 0.6 | |
2025 $m | 2024 $m | ||
Deferred tax expense included in income tax expense comprises: | |||
Increase in deferred tax assets | (0.9) | (3.0) | |
Increase in deferred tax liabilities | 1.7 | 3.5 | |
Movement of deferred tax asset on carry forward losses | 1.0 | 2.9 | |
Exchange variations | (0.1) | 0.1 | |
Total deferred tax expense | 1.7 | 3.5 | |
2025 $m | 2024 $m | |
Deferred tax assets and liabilities | ||
Deferred tax assets | ||
The balance comprises temporary differences attributable to: | ||
Carry forward losses | 4.1 | 3.0 |
Other | - | 0.2 |
Total deferred tax assets | 4.1 | 3.2 |
Deferred tax liabilities | ||
The balance comprises temporary differences attributable to: | ||
Revaluations of investment properties | 11.4 | 9.9 |
Unrealised FX on revaluation | 0.2 | - |
Total deferred tax liabilities | 11.6 | 9.9 |
Net deferred tax liabilities | 7.5 | 6.7 |
Reconciliation to consolidated statement of financial position | ||
Deferred tax liabilities | (7.5) | (6.7) |
Net deferred tax liabilities | (7.5) | (6.7) |
The Group offsets tax assets and liabilities if it has a legally enforceable right to set off tax assets
and tax liabilities and the deferred tax assets 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:
2025 $m | 2024 $m | |
Recognised group tax losses | 14.6 | 10.9 |
Unrecognised group tax losses | 0.5 | 0.7 |
Total | 15.1 | 11.6 |
For the year ended 30 June 2025, 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.
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National Storage REIT published this content on August 21, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on August 21, 2025 at 00:27 UTC.
