Big Yellow turns in decent third quarter performance

Self storage company Big Yellow Group updated the market on its trading for the third quarter ended 31 December on Tuesday, reporting closing occupancy of 81.1% - an increase of 1.4 percentage points over the same time last year.

The FTSE 250 company said like-for-like closing occupancy increased by 2.4 percentage points to 82.1%.

In its “seasonally weaker” third quarter, Big Yellow said occupancy decreased by 126,000 square feet, or 2.7% of its maximum lettable area as at 31 December,compared to a loss of 170,000 square feet in the same quarter last year, or 3.7% of the maximum lettable area.

The average achieved net rent per square foot for the quarter was up 3.0% compared to the same quarter a year earlier, with closing net achieved rent per square foot totalling £27.64 - an increase of 2.8% year-on-year and up 3.4% from 31 March.

Big Yellow said its revenue increased 7.1% year-on-year for the third quarter to £31.7m, and was ahead 7.0% for the year to date.

Like-for-like revenue rose 6.4% compared to the same quarter last year to £31.5m.

The firm said the revenue from the Armadillo portfolio for the quarter to 31 December increased 17% to £3.8m, compared to the same quarter last year.

Like-for-like revenue, excluding the three most recent store acquisitions, was up 5% year-on-year.

Looking at the firm’s property portfolio, Big Yellow said construction was underway on its Manchester and Camberwell stores, which it anticipated would open in summer 2019 and spring 2020 respectively.

It said it was recently granted planning consent for a 57,000 square foot store in Bracknell, which was set to open in summer 2020.

As it had reported previously, Big Yellow obtained planning consent for a “comprehensive redevelopment” of its Battersea store.

The company said it had started the process of transferring customers to nearby stores, and was aiming to begin construction next summer, with a view to re-opening the larger store in summer 2020.

Big Yellow also completed the purchase of the Wyvern Industrial Estate in New Malden, London for £28m in early January.

The company occupied around half of the estate, with an 81,000 square foot net lettable area store.

“We are pleased to be reporting a solid set of results, with revenue growth of 7.1% compared to the same quarter last year, and like-for-like revenue growth of 6.4%,” said chief executive officer James Gibson.

“As with the first half, this growth is coming from both occupancy and rate, and we would expect to see this continuing in 2019 as we return to occupancy growth in our fourth quarter and seasonally stronger spring and summer trading period.

“We remain focussed on our core objective of 90% occupancy across the portfolio.”

Gibson said the development of new stores to provide external growth was, as the firm had previously reported, a key objective of the business.

“To that end, we are delighted to have been granted planning consents at Battersea and Bracknell.”