BYG : Big Yellow expanding in Oxford and Cambridge
Big Yellow has announced its interim figures for the six months ended 30 September 2014. Big Yellow’s net asset value rose from 436.3p to 461.9p and its interim dividend was raised from 10.1p to 13.0p. Year on year occupancy increased from 70.5% to 75.2% and they drove up rents from £25.25 per sq ft to £26.38 per sq ft – these two factors combined to boost revenues by 11%.
They bought a freehold store in Oxford from Fort Box Self Storage for £4.1m. It has a lettable area of 35,000 sq ft with expansion space for a further 10,000 sq ft. They say their existing 33,000 sq ft Oxford store is over 90% occupied. In Cambridge Big Yellow has exchanged contracts to acquire the freehold of a former Royal Mail depot adjacent to the Cambridge Retail Park, Newmarket Road. They plan to refurbish it and convert it into a 55,000 sq ft self storage centre, opening in late 2015, spending about £9.3m on the site – this is the first time in seven years that they have bought a site to construct storage.
They plan to raise c£80m of fresh equity to help fund the acquisition of the two thirds of The Big Yellow Limited Partnership (a Joint Venture with Pramerica Real Estate Investors) that they don’t already own as well as the Cambridge development. The Big Yellow Limited Partnership was created in November 2007 and the portfolio consists of 12 stores located in Birmingham, Camberley, Edinburgh, High Wycombe, Leeds, Liverpool, Nottingham, Poole, Reading, Sheffield (two stores) and Stockport. The portfolio’s net operating income (pre-admin expenses) for the six months ended 30 September 2014 was £3.4m. They say that, at the option price, the portfolio has an implied first year pre-admin net operating income yield of 6.8%, which would rise to 8.1% if the stores achieve 85% occupancy at today’s rental levels.