Big Yellow Group has raised £110m in a placing, which it will use to out its existing development pipeline of self-storage sites.
A total of 11,470,212 new ordinary shares have been placed at a price of 945 pence, and with existing and new institutional investors raising £108.4m, the executive directors participated to the tune of 301,586 shares and £2.85m.
Concurrently with the placing, retail investors have subscribed in the separate offer made by the company via the PrimaryBid platform for a total of 170,000 new ordinary shares, raising £1.6m.
The placing price represents a discount of 2.88% to the closing share price of 973 pence on 10 October 2023.
The proceeds will be used to fund the construction of an initial six sites – in Farnham Road, Slough, Wapping, Wembley, Queensbury, Staines, and Slough Bath Road – all of which have planning consent at an incremental cost of £90m.
The company suspended construction on all its development projects in May 2022 because of unfavourable conditions in the construction market. The company said that these conditions have improved considerably.
Following the construction of the initial six sites, construction (subject to planning) will then follow in due course on the remaining sites the company owns at a further incremental cost of £147m.
In total, 11 new stores and two replacement stores are in the pipeline totalling 902,000 sq ft. The projected net operating income when stabilised is £30.4m, representing a 13% return on the incremental capital deployed.
On a proforma basis at stabilisation, the return is approximately 8.7% on the total development cost, including land already expensed.
BYG : Big Yellow Group raises £110m for new developments
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