Lok'nStore trading well as it expands new store pipeline

Self-storage company Lok'nStore updated the market on its new store development pipeline on Monday, which when delivered would result in the group operating 51 stores.

The AIM-traded firm said contracts had exchanged on two new freehold and one leasehold acquisition, with planning permission granted for two stores and one store extension.

Good progress was reported in the construction of three new stores, due to open in late 2021 and early 2022.

Delivery of the pipeline was expected to add around 658,500 square feet of lettable space, following occupancy increasing in the 12 months ended 31 January to 81.6% of available space, from 67.1%.

Lok’nStore said the new stores would be funded from its existing revolving credit facility, operating cash flow and proceeds from the sale of surplus land.

It said its post investment loan-to-value ratio would increase to between 20% and 25%.

The company also reported that the new Salford store, opened in April, was “very encouraging” in terms of trading, while overall trading remained “excellent”.

“We continue to deliver on our objective of opening more Landmark stores whilst maintaining the strength of our balance sheet and remaining conservatively geared,” said executive chairman Andrew Jacobs.

“Our proven business model is working well - as we open new stores and build their occupancy so their value increases significantly whilst generating strong cash flows along the way.

“These cash flows can then fund future growth and an increasing dividend to our shareholders.”

Jacobs said trading since the company announced its interim results in April was “excellent”, adding that it further demonstrated that Lok'nStore was “well-positioned” to build and open more new stores in the under-supplied UK self-storage market.

“Our total secured pipeline is now 13 stores which will add considerable momentum to earnings growth in the coming years, and we are continually assessing more new sites.”

At 0918 BST, shares in Lok’nStore Group were up 1.08% at 656.99p.