U.K. self-storage operator Lok’nStore Group PLC announced financial results for the first half of its fiscal year, which ended Jan. 31. Revenue during the period increased 2.2 percent from the previous year, and occupancy rose 6.1 percent year over year. The company attributed the gains in part to the effects of the 20 percent value-added tax (VAT) imposed last October on self-storage facilities across the United Kingdom. While some operators have been negatively impacted by the VAT, Lok’nStore was already compliant with the tax.
“This compares to last year when occupancy was down 0.3 percent in this traditionally weaker period,” company officials said. Since the implementation of the VAT on self-storage on Oct. 1, new move-ins at Lok’nStore are up 12.4 percent compared to the same period the previous year.
"The harmonization of VAT across the U.K. self-storage sector has benefited Lok'nStore with our major competitors having to register for VAT, while our own business was already VAT-compliant,” said Andrew Jacobs, CEO. “Activity levels across the portfolio have been robust, reflected by our strong occupancy growth of 6.1 percent year on year. We expect this to continue into the second half and into the next financial year.”
Part of the company’s optimism is tied to the opening of two new locations during the next year. By the end of 2014, Lok’nStore expects to have 13 freehold sites, nine leasehold sites and three managed stores in its portfolio.
Lok'nStore currently operates 22 self-storage facilities in Southeast England. The company builds, buys or leases large warehouses or industrial buildings and rents storage units to customers on a weekly basis. Around 60 percent of the company's 7,000 customers are residential and 40 percent are commercial. Lok’nStore has more than 920,000 square feet of net rentable space, which is evenly split between freehold and leasehold.