Lok'nStore to dispose of document storage business

Self-storage company Lok'nStore has announced the disposal of its document storage business, Saracen, to Iron Mountain UK for £7.64m in cash.

The company said that in the short term, proceeds from the disposal will be used to reduce overall group borrowing and will improve all key banking ratios.

Lok’nStore estimated that its loan to value ratio would drop from 19.7% to 15.1%, while the net asset value per share would increase from £4.80 to £4.89.

In the medium term, the proceeds will be used to fund the ongoing investment into its highly accretive development pipeline of new self-storage centres, fulfilling the company's objective of growing asset value by recycling capital from lower growth assets into high growth landmark stores.

Chief executive officer Andrew Jacobs said: "Executing this strategic disposal and making these further acquisitions continues our strategy of increasing the number of fast growing landmark self-storage centres. We are reallocating capital to enhance the efficiency and quality of our portfolio and expand our asset value whilst further strengthening our balance sheet.

"We take a tactical approach to the management of both property and financial assets creating value without significantly increasing risk whilst maintaining the predictable growth in dividends for investors."

At 1320 GMT, the shares were up 0.7% to 405.25p.