U.K. self-storage company Lok'nStore Group PLC has sold its facility in Swindon, England, to an unidentified investment fund for £3.5 million. The operator will continue to manage the asset as a branded Lok’nStore location on behalf of the investor, according to a press release. It intends to use proceeds from the sale to fund development projects, officials said.
The Swindon property originally operated as one freehold and one leasehold location, but a recent £500,000 expansion increased capacity at the freehold asset, and the two locations were consolidated into one, the release stated.
"The sale of our Swindon business on a manage-back basis is another step in the expansion of our operating business while keeping a tight lid on leverage,” said Andrew Jacobs, CEO. “This structure allows us to retain and grow our operating footprint without stretching our balance sheet or diluting our equity capital.”
The company is scheduled to open three new self-storage facilities during the next 12 months in Bristol, Chichester and Southampton, England, according to the release. Once those projects are complete, Lok’nStore will operate 26 self-storage facilities and two assets dedicated to document storage.
As a result of the Swindon sale, Lok'nStore's pro forma loan-to-value ratio will fall from 28.2 percent last year to 25.3 percent, company officials said. The operator is scheduled to announce financial results for its fiscal year through July 2015 on Oct. 19.
Lok’nStore 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 historically has been evenly split between freehold and leasehold.