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13 Jan 2021 07:00
13 January 2021
Big Yellow Group PLC
("Big Yellow" or "the Group")
Trading Statement
The Board of Big Yellow Group PLC, the UK's brand leader in self storage, is pleased to provide the following update on trading for the third quarter ended 31 December 2020.
Results
| Quarter ended 31 December 2020 | Quarter ended31 December 2019 | Change |
Store maximum lettable area ("MLA") | 4,913,000 | 4,688,000 | 4.8% |
Closing occupancy (sq ft) | 4,074,000 | 3,745,000 | 8.8% |
Occupancy loss in the quarter (sq ft) | (32,000) | (165,000) | 133,000 sq ft |
Occupancy change year to date (sq ft) | 293,000 | (65,000) | 358,000 sq ft |
Closing occupancy (% of MLA) | 82.9% | 79.9% | 3.0 ppts |
Like-for-like closing occupancy(1) | 85.7% | 79.9% | 5.8 ppts |
Total revenue for the quarter | £34.7m | £32.3m | 7.4% |
Like-for-like store revenue for the quarter(2) |
£33.7m |
£31.6m | 6.6% |
Year to date total revenue | £100.5m | £96.6m | 4.0% |
Like-for-like store revenue year to date(2) | £97.9m | £94.3m | 3.8% |
Average achieved net rent per sq ft | £28.01 | £28.03 | (0.1%) |
Closing net achieved rent per sq ft | £28.40 | £28.42 | (0.1%) |
(1) Excluding Camberwell (opened July 2020), Bracknell (opened September 2020) and Battersea (opened November 2020).
(2) Like-for-like store revenue excludes Manchester (opened May 2019), Camberwell, Bracknell and Battersea.
Business move-ins in the quarter were up 18% compared to the prior year, with domestic move-ins up 11%. Move-outs were down 1% compared to the same quarter last year. The table below shows the monthly move-ins compared to the prior year.
Month | Move-ins 2020 | Move-ins 2019 | % | Move-outs 2020 | Move-outs 2019 | % |
October | 6,339 | 5,356 | 18 | 6,789 | 6,714 | 1 |
November | 5,265 | 5,003 | 5 | 5,607 | 5,763 | (3) |
December | 4,718 | 4,284 | 10 | 4,890 | 4,947 | (1) |
Total | 16,322 | 14,643 | 11 | 17,286 | 17,424 | (1) |
In our seasonally weaker third quarter, occupancy decreased by 32,000 sq ft (0.7% of the MLA at 31 December 2020) compared to a loss of 165,000 sq ft in the same quarter last year (3.5% of the MLA at 31 December 2019) and a loss of 126,000 sq ft in 2018 (2.7% of the MLA at 31 December 2018). The table below shows the net occupancy movement compared to the prior quarter by customer type:
Customer type | Net sq ft change in quarter ended 31 December 2020 | Net sq ft change in quarter ended 31 December 2019 | Change |
Domestic | (26,000 sq ft) | (128,000 sq ft) | 102,000 sq ft |
Business | 9,000 sq ft | (18,000 sq ft) | 27,000 sq ft |
Student | (15,000 sq ft) | (19,000 sq ft) | 4,000 sq ft |
Total | (32,000 sq ft) | (165,000 sq ft) | 133,000 sq ft |
Like-for-like closing occupancy was 85.7%, an increase of 5.8 ppts from the same time last year. Closing occupancy was 82.9%, with three stores having opened in the current year.
Closing net achieved rent per sq ft was £28.40, an increase of 2.3% from 30 September 2020, and a decrease of 0.1% from the same time last year. This reflects a recovery from the impact on rental growth of the suspension of price increases to existing customers in the first half of the year, with move-in activity and hence opening offers being higher this quarter than last year. The Group's average achieved net rent per sq ft was broadly in line with last year and we expect to see continued rental growth as we go into our normal Spring/Summer growth period at higher levels of occupancy.
The Group's like-for-like store revenue increased by 6.6% in the quarter, driven entirely from occupancy gains as year-on-year average rate remained stable. Like-for-like store revenue growth for the year to date is up 3.8%, compared to 2.4% at the half year.
As of 12 January, 98.1% of our third quarter revenue has been collected, in line with the prior year.
Armadillo
The occupancy of the 25 store Armadillo portfolio at 31 December 2020 was 81.3%, an increase of 1.0 ppt from 30 September 2020 (2019: decrease of 2.6 ppts). Revenue for the quarter to 31 December 2020 increased by 7.0% to £4.6 million compared to the same quarter last year (£4.3 million).
Development
In December, the Group exchanged contracts to acquire a 5.6 acre site at the Causeway, Staines. The £44.6 million development will, subject to planning, comprise a 65,400 sq ft self storage centre including 5,400 sq ft of external access units and 98,500 sq ft of warehousing and logistical space which the Group will develop itself. This is a strategic site with excellent access to the M25 motorway and Heathrow Airport and fills a gap in our London store network.
During the period, as previously reported, we obtained planning consent on our development sites at Kings Cross and Harrow (both in London).
The construction of our stores in Uxbridge (London), and Hove, are on schedule and we anticipate that the stores will open in Summer 2021 and Spring 2022 respectively.
We will shortly be commencing construction on our development sites in Harrow, Hayes, Kings Cross and Kingston North (all in London).
We are continuing planning discussions on our other development sites and will provide further updates in due course.
James Gibson, Chief Executive Officer, commented:
"The trading momentum we referred to when announcing our half year results has continued through the quarter, and this has been our best occupancy performance in the third quarter for many years. The main driver of this occupancy performance has been our domestic customer base, although business demand has also continued to improve.
What is becoming clear is that awareness of our product has accelerated during this difficult time, as people reflect on how they live their lives or operate their businesses. As we have stated previously, the structural tail winds which have been accelerated by this health crisis continue to outweigh the economic head winds, in so far as they impact our demand. We also believe that our performance during this period is reflective of self storage being better established than it was during the Global Financial Crisis.
We are now just over a week into a third lockdown, albeit unlike the first lockdown, industry, construction and the housing and property markets remain open. Although it is early in the fourth quarter, we are continuing to see growth in year-on-year prospects and occupancy, however as we have always stated, our visibility of future demand is limited to two to four weeks.
We remain confident of the longer-term growth prospects of our business; the principal drivers being revenue growth from the existing portfolio and targeted expansion focussed principally in our core area of London and its commuter towns, where new supply remains constrained."
For further information, please contact:
Big Yellow Group PLC 01276 477 811
Nicholas Vetch, Executive Chairman
James Gibson, Chief Executive Officer
John Trotman, Chief Financial Officer
Teneo
Ben Foster 07776 240 806
Matthew Denham 07825 735 596
Notes to Editors
Big Yellow is the UK's brand leader in self storage. Big Yellow now operates from a platform of 103 stores, including 25 stores branded as Armadillo Self Storage, in which the Group has a 20% interest. We own a further 12 Big Yellow self storage development sites, of which eight have planning consent. The current maximum lettable area of the existing platform (including Armadillo) is 6.0 million sq ft. When fully built out the portfolio will provide approximately 6.8 million sq ft of flexible storage space. Of the Big Yellow stores and sites, 98% by value are held freehold and long leasehold, with the remaining 2% short leasehold.
The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Our focus on the location and visibility of our Big Yellow stores, coupled with our excellent customer service and our market leading online platform, has created the most recognised brand name in the UK self storage industry.
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