Big Yellow Trading Update - July 2019
19th July 2019
The 75 Big Yellow Self Storage stores increased occupancy over the quarter by 125,000 sq ft resulting in a closing occupancy of 84.0%. Like for like closing occupancy was 85.1%, an increase of 1.8 ppts from 30 June 2018. The Group's average achieved net rent per sq ft increased by 1.6% compared to the same quarter last year. The Group's like for like revenue increased by 4.4% compared to the same quarter last year, driven by a combination of growth in occupancy and rate.
Revenue from the 24 store Armadillo portfolio for the quarter to 30 June 2019 increased by 7% to £3.9 million compared to the same quarter last year. Like for like revenue, excluding Grimsby and Daventry (acquired in April 2019 and May 2019 respectively) increased by 4% compared to the same quarter last year.
Our landmark Manchester city centre store of 60,000 sq ft on Water Street opened in May 2019, and its trading performance in the first two months has been encouraging. The construction of our 77,000 sq ft store in Camberwell, London is on schedule and we anticipate that the store will open in April 2020. During the period we demolished our existing 34,000 sq ft Battersea store, with construction due to commence shortly, with the larger store of approximately 75,000 sq ft scheduled to re-open in Summer 2020. We will shortly commence construction on our 57,000 sq ft Bracknell store, which is also due to open in Summer 2020. We are continuing planning discussions on our other development sites and will provide further updates in due course.
Acquisition and disposal:
During the period the Group acquired a 6.4 acre site in Harrow, London for £20 million. The land has the benefit of an outline planning consent and Big Yellow will therefore make a reserved matters planning application for a 78,000 sq ft self storage centre and for approximately 110,000 sq ft of warehouse space. Upon receipt of planning the Group will decide how to deal with the five acres of land which will be surplus to requirement. During the period the Group sold the part of the Wyvern Industrial Estate in New Malden, London that it does not occupy for £11.8 million. Big Yellow acquired the entire estate for £29 million (including costs) in January 2019, giving security of tenure over our 81,000 sq ft New Malden store, and extinguishing the rental liability. The current net operating income of the Big Yellow store is approximately £1.7 million, representing a 10% yield on the net investment of £17.2 million.
James Gibson, Chief Executive Officer, commented:
"We are pleased to have reported a further increase in like-for-like occupancy to 85.1%, up from 83.3% at 30 June 2018, with growth of 125,000 sq ft in the quarter (2018: 131,000 sq ft). This occupancy performance was helped by a recovery in prospect numbers to more normal levels over the quarter. The like for like growth in revenue this quarter of 4.4% was affected by the more muted occupancy performance in the final quarter of last year, given the heightened uncertainty in the run-up to 29 March, the UK's original proposed exit date from the EU.
We remain focussed on our core objective of 90% like for like occupancy across the portfolio.
As reported in our full year results in May we are continuing our expansion strategy and are pleased to have acquired an excellent development site in Harrow, North West London. This acquisition takes the pipeline to 13 potential Big Yellow stores, approximately 900,000 sq ft (19% of the Group's current MLA), of which three have planning consents and are either currently under construction or will shortly be so"