Safestore Third Quarter Update, May to July 2020

10th September 2020

Third quarter trading update for the period 1 May 2020 to 31 July 2020:
Encouraging trading following the COVID-19 lockdown, the business is on course to meet full year expectations.


All geographies operating normally post lockdown, the health, safety and well-being of our employees and customers remains of paramount importance.

Group revenue in Q3 grew by 5.0%.

Group like for like storage revenue in Q3 increased 2.2%.

Group like for like closing occupancy of 4.944m sq ft up 0.2% on Q3 2019.

Record Q3 increase in like for like occupancy in the UK of 279,000 sq ft (2019: 247,000).

Group like for like average storage rate in Q3 grew 3.5%.

Barcelona acquisition performing strongly with Q3 closing occupancy increased to 93.5%.

Freehold interest of existing Basildon store acquired.

Joint venture with Carlyle completed acquisition of Lokabox in Belgium.

New freehold 2.17 acre site acquired in Birmingham (Middleway)

Frederic Vecchioli, Chief Executive Officer commented:

"I am pleased to report a solid performance in the third quarter despite strong comparative quarters in both 2018 and 2019. I would like to thank our staff for the tremendous effort and resilience demonstrated over recent months, the result of which is that the business has responded well to the COVID-19 lockdown. Occupancy performances in June and July, as lockdown eased, were strong driving like for like closing occupancy for the Group above prior year levels. Our top priority is to build on the post lockdown recovery and deliver the significant organic growth opportunity represented by the 1.7m square feet of unlet space in our existing fully invested estate.

"Our recent openings in London Carshalton, Gateshead and Sheffield have started well and, despite the impact of COVID-19, are performing in line with or better than their business plans.

"I am especially pleased with the performance of OMB in Barcelona, growing occupancy from 89% at the end of April to 93.5% in July, in particular given the period of lockdown in the city. I am also excited by our entry into the Belgian market via our joint venture with Carlyle and the acquisition of Lokabox.
"I am confident that our leading market positions in the UK and Paris and our resilient business model leaves us well positioned for the future. The Company remains on course to meet the Board's full year expectations."

The UK business grew total revenue by 2.8% in the quarter. Like for like storage revenue was up 2.2% but ancillary revenues were down 9.7%. As a result, like for like revenue was down 0.3% in the quarter.

The third quarter is traditionally the busiest period of the Group's financial year. After the lockdown was relaxed we saw a strong occupancy performance in both June and July 2020. As a result, the business added 279,000 sq ft of like for like occupancy in the quarter which compared favorably to the strong performance in the equivalent quarter in the prior year (2019: 247,000 sq ft added). As a result, by the end of the quarter, the decrease in occupancy during lockdown had been reversed and closing occupancy was up 0.4% on the prior year. However, the average like for like occupancy was down 1.2% for the quarter as the occupancy lost in March and April 2020 was gradually recovered over the quarter.

Like for like average storage rate in the UK was up 3.5% compared to Q3 2019 and is up 2.4% for the year to date. We anticipate some erosion of this rate growth in Q4 as recent strong new lets are accompanied by relatively higher levels of initial discounting.

The reduction in like for like ancillary sales reflected the gradual recovery from the reduced level of activity during the lockdown period. Certain ancillary revenue streams, such as Pick Up and Drop Off services (PUDO), car parking and workshop rentals were particularly affected but are now recovering.

In 2019 and 2020 we opened or acquired new stores at Peterborough, Birmingham Merry Hill, London- Chelsea, London- St John's Wood, London Carshalton, Sheffield and Gateshead which are not included in the like for like figures. All new stores are performing in line with or ahead of their business plans.

Recent revenue collections have been largely unaffected by the COVID-19 pandemic. By the end of August 2020, 97.8% of July 2020 revenues had been collected which was in line with 2019. In addition, 75.5% of August 2020 revenues had been collected within the month (2019: 77.6%).
Paris had a strong quarter, growing revenue by 3.8% compared to last year.

On a like for like basis the business grew storage revenue by 2.9% for the quarter driven by rate growth of 3.1% compared to the third quarter of 2019 and flat average occupancy. Ancillary revenues were in line with the prior year resulting in a 2.6% increase in like for like revenue.

Like for like occupancy grew by 35,000 sq ft since the end of Q2 (2019: 37,000 sq ft) resulting in closing occupancy of 80.2%, down 0.5 percentage points compared to the prior year but up by 2.8 percentage points over the peak season as compared to the position at the end of Q2.

The impact of the small Sterling fluctuations compared to Q3 2019 contributed to the total Sterling equivalent revenue increasing 5.3% on the prior year.

In Paris recent revenue collections have also been largely unaffected by the COVID-19 pandemic. By the end of August 2020, 86.6% of July 2020 revenues had been collected (2019: 84.4%). In addition, 71.3% of August 2020 revenues had been collected within the month (2019: 66.8%).

Spanish self storage operator OMB was acquired on 30 December 2019 so has contributed seven months of trading to the Group's results. In that period the business delivered €1.7m of revenue.

In the period since lockdown the business has performed strongly and, at the end of July 2020, the closing occupancy of the four stores had increased from 89% in April to 93.5%. The impact of the COVID-19 lockdown on the trading of the business between mid-March 2020 and the end of April 2020 was immaterial.

As previously announced, our joint venture with Carlyle, established in August 2019, acquired the six-store portfolio of Lokabox on 3 June 2020. Safestore's equity investment in the JV, relating to Lokabox, amounted to c. €2.8m funded from the Group's existing resources. Safestore also earns a fee for providing management services to the JV and expects to earn an initial return on investment of 12% before transaction related costs for the first full year reflecting its share of expected JV profits and fees for management services.

Lokabox has six prime locations in Brussels (2), Liege (2), Charleroi and Nivelles. All six stores are freehold, with the two Brussels stores having opened in the last nine months. At the time of acquisition, the business had 20,600 sq metres (222,000 sq ft) of MLA and an occupancy of 63%. This acquisition complements the six stores in Amsterdam and Haarlem in the Netherlands acquired in August 2019. In total the JV now owns twelve stores with 46,300 sq metres (499,000 sq ft) of MLA.
The Belgian self storage market is the seventh largest in Europe with 90 stores and 2.2m sq ft of MLA. This represents 0.19 sq ft per head of population, which compares to 0.73 sq ft per head in the UK, 0.20 sq ft per head in France and 9.44 sq ft per head in the USA. The Group's further investment in the JV is expected to be immediately accretive to Group earnings per share from completion and will support the Group's future dividend capacity.

Freehold acquisition- Basildon
In July 2020 the Group acquired the freehold interest in its Basildon store for £4.95m. The store had just over six years remaining on its lease and a rent review was due in September 2021. The store has an MLA of 41,600 sq ft and is currently 73% occupied. The annual rent on the store was £210,000.

New site- Birmingham Middleway
In July 2020, the Group completed the acquisition of a freehold 2.17 acre site including an existing warehouse in Birmingham. The site is located on the southern side of the inner A4540 ring road. It is anticipated that the existing warehouse will be converted to a 58,500 sq ft storage facility. Subject to planning permission, we anticipate opening the new store in the second quarter of 2021 and intend to relocate our existing Digbeth store (MLA 45,000 sq ft) to the new site.
New store opening- Sheffield

In September 2019, we acquired a freehold 1.5 acre site with an existing warehouse in Sheffield. The site is located in an accessible and prominent position on the northern side of the inner ring road (A61) which is close to the city centre in a densely populated catchment area. Planning permission for using the building for self storage and creating external units was obtained and, after a short delay resulting from COVID-19 lockdown restrictions, the 47,000 sq ft store opened during the quarter in June 2020. 

Bedford and Barking extensions openings

Since announcing our Interim Results in June 2020, two store extensions, at Bedford and Barking, have been completed. Bedford has an existing MLA of 35,300 sq ft and occupancy peaked at 94% in 2018. An additional storage building on land already in our ownership adjacent to the existing store was completed in June 2020 providing additional MLA of 26,000 sq ft.

Barking currently has an MLA of 47,900 sq ft and its occupancy also peaked at 94% in 2018. The extension, which was completed in August 2020, has added another 5,000 sq ft of MLA.


Our August 2020 occupancy performance has been stronger than in any previous year with a net like for like inflow of 135,000 sq ft (2019: 79,000 sq ft). However, reflecting normal industry trading patterns, we anticipate a reduction in occupancy in Q4 compared to Q3 over the whole quarter. The current uncertainty caused by COVID-19 has presented many challenges, but, thanks to the outstanding effort and commitment of our staff, the business has responded well and the Company remains on course to meet the Board's full year expectations.