U.K. self-storage operator Big Yellow Group PLC released financial operating-performance results for the first six months of its 2017 fiscal year, which ended Sept. 30. The company reported same-store revenue of £57.1 million for the period, up 6 percent from a year ago. It attributed the growth to strong gains in average occupancy across its portfolio, which closed at 83.8 percent compared to 78.5 percent a year ago, according to a press release.
Same-store occupancy was 84.3 percent, up from 79.6 percent a year ago. Though it fell short of its total-portfolio average-occupancy goal of 85 percent, Big Yellow officials were encouraged by the positive movement and 1.6 percent increase in rent per square foot despite no rate growth year over year. As a result, the company has increased its occupancy target to 90 percent.
“In our view, it makes no sense to have significant unutilized capacity, and consequently we have focused on occupancy and will continue to do so for the time being,” said Nicholas Vetch, executive chairman. “Our pricing model is largely automated, and higher levels of occupancy deliver more traction on pricing. We know this because we can see the performance of stores with elevated occupancy.”
While Big Yellow would like to add rental capacity through acquisitions, “there are few self-storage centers that meet our quality criteria, and for those that do exist, they are generally not for sale,” Vetch said, noting the company has no interest is expanding internationally. “We will, therefore, continue to develop the Big Yellow platform organically, site by site.”
Total revenue for the six months was £58.1 million, a 6 percent increase year over year. Adjusted pre-tax profit was £30.6 million, up 13 percent from a year ago. The group's pre-tax “statutory profit” was £78.7 million, a 36 percent increase compared to the same period last fiscal year. The growth was attributed to increases in operating profit and a higher revaluation gain during the period.
The company has acquired three development sites since March, increasing its project pipeline to eight new facilities and two expansions. Together the London-area projects will add 575,000 square feet. Of current developments, Big Yellow expects to open a 56,000-square-foot facility in Guildford, England, in March and complete a 25,000-square-foot expansion in London’s Wandsworth borough in April.
Big Yellow Group operates 92 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 5.4 million square feet.
- Big Yellow Group: Results for the Six Months Ended 30 September 2017
- DigitalLook: Increased Revenue and Profit Leads Big Yellow to Raise Occupancy Targets