Big Yellow ups rent prices to offset declines in occupancy

Self-storage firm Big Yellow was able to grow sales despite a decline in occupancy levels in a seasonally weaker trading period as it was able to increase average rents by 7%.

Total revenue for the three months to 31 December was up 5% at £50.5m, slowing slightly from the 6% growth seen in the first half, with like-for-like sales growth easing to 4% from 5%.

The average achieved net rent per square foot increased by 7% on last year to £34, helping to offset a decline in occupancy to 77.6% from 80.4% at the same point the year before.

At the same time, the maximum lettable area across its portfolio increased by 2% to 6.42m square feet.

"The occupancy performance in the third quarter has been similar to last year and although it is too early in the quarter to judge whether it is sustainable, we have seen a pick-up in our book of reservations," said chief executive Jim Gibson.

"We are gearing up to commence construction on all the sites on which we have planning consent, and where vacant possession is available, which we expect will add significantly to earnings over the next few years."

The company announced last month that it has put in place a new £300m ESG-linked debt facility for an initial term of three years, with the option to extend the facility by two additional one-year terms through to December 2028, subject to lender approval.

"The refinancing of the revolving credit facility, and with net debt to EBITDA of approximately three times, means we can execute this expansion without taking undue risk," Gibson said.

The stock was up 0.4% at 1,162p in early deals on Thursday.