U.K. self-storage operator Big Yellow Group PLC released operating-performance results for the third quarter of its 2015 fiscal year, which ended Dec. 31. The company reported revenue of £21.3 million for the quarter, up 16 percent from the same quarter a year ago. Excluding the company’s 12 partnership facilities, revenue was £20.3 million for the period, an 11 percent increase.
Occupancy across the company’s portfolio of 68 locations closed at 71.1 percent for the quarter compared to 65.8 percent the previous year, but fell 103,000 square feet or 2.4 percent of the maximum leasable area (MLA). Move-ins were up 14 percent year over year. For the 56 facilities wholly owned by Big Yellow as of Sept. 30, 2014, the loss in occupancy was 2.1 percent of MLA.
Net rent per square foot across the portfolio was £25.31 for the quarter, a decrease of 2 percent from the same period a year ago. Excluding partnership facilities, which have a lower net rent per square foot, the company achieved a rent yield of £26.55, which is a 3 percent increase from March 31, 2014.
"The seasonal loss of occupancy in the group this quarter is in the normal range of 2 to 3 percent of MLA, and pleasingly towards the lower end of this range, driven by year-on-year improvement in move-in numbers in the stores,” said James Gibson, CEO. “This improving demand is broad based across domestic and business customers. Whilst our main focus remains on occupancy performance, we are pleased to have delivered net-rent-per-square-foot growth of 1.6 percent from Sept. 30, 2014, across the total portfolio of 68 Big Yellow stores.”
During the quarter, the company completed its acquisition of two-thirds of the Big Yellow Limited Partnership facilities it didn’t already own. The acquisition was partly financed by placing 14.35 million ordinary shares in November 2014. The 12 partnership locations are in large metropolitan areas outside of London, company officials said in a press release.
Big Yellow also acquired the freehold interest in its existing facility in the Battersea area of London, which had 12 years remaining on the lease, along with an adjoining retail building. The company plans to redevelop the 1.5-acre site to include a larger self-storage facility together with other uses.
Elsewhere on the development front, the company completed the shell of its 60,000-square-foot storage project in the Enfield area of North London. The facility is scheduled to open in April. Big Yellow also acquired a Royal Mail depot, which it plans to convert to self-storage. That project is expected to be completed later this year.
“We have had a positive start to January with the seasonal return to occupancy growth and an improving book of reservations,” Gibson said. “As we have indicated previously, the uncertainty around the general election in May could lead to some prospects deferring decisions in the run up to and over the election period.
“Looking through that, we believe the structural changes in London and other major cities, the barriers to new self-storage supply, the recent changes to stamp duty, reducing energy costs, and continued low interest rates are all positive for self-storage demand. We now look forward to our seasonally busier spring and summer trading period.”
Big Yellow Group operates 78 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 4.7 million square feet.
Sources:
- Big Yellow Group PLC: Interim Management Statement
