U.K. self-storage operator Big Yellow Group PLC is finding available commercial real estate on which it can develop new locations scarce amid a flurry of housing development in London and Southeast England. Though the company recently took over two Lock & Leave self-storage facilities in Nine Elms and Twickenham and established a new location in Wapping, Big Yellow is concerned it won’t be able to expand and meet demand as its current Greater London properties lease up, according to the source.
"As our vacant capacity reduces, it increases the imperative to create more,” Nicholas Vetch, executive chairman, told the source. “The tight supply of land in our core areas of activity, and a planning regime broadly focused on housing, remain very significant barriers for our competitors and ourselves."
Big Yellow began construction in December on a 55,000-square-foot self-storage facility in Guildford, England, which is expected to open in early 2018. In addition, the company previously announced it had received planning approval for a 25,000-square-foot expansion of its Wandsworth, England, location. That project is expected to be complete next spring.
For its 2017 fiscal year, which ended March 31, Big Yellow reported an 8 percent increase in revenue to £109.1 million. Adjusted pre-tax profit grew 11 percent to £54.6 million year over year. Occupancy has also increased across its portfolio with the company poised to surpass 80 percent, moving toward its goal of 85 percent average occupancy, Vetch said.
Big Yellow Group operates 89 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 5.3 million square feet.