Sale of Reading Property

RNS Number : 7043Q

Lok'n Store Group PLC

17 October 2013

 



17^th October 2013

Lok'nStore Group plc

Sale of Reading Property

The Board of Lok'nStore Group, the AIM listed self-storage company, is pleased to announce the sale of its site in Reading, Berkshire for an initial consideration of £2.9 million.

The consideration is a 7.4% premium to the 31^st July 2013 valuation of £2.7 million and will be paid in cash on completion when the store is vacated in 2014. In addition the Group will receive overage, which is dependent on the value of sales achieved on the development of residential properties.

Lok'nStore owns an adjacent site in Reading on which it is building a new store to replace its current store. The new store will have 48,000 square feet of self-storage space, a 20% increase over the existing store. The highly prominent location is directly accessible by the busy main road which connects Reading town centre to the M4 motorway.

The sale allows the Company to construct its new store while continuing to operate its existing successful trading business during this period. The business will then be moved to the newly constructed store delivering vacant possession on the sold site.

The cost of constructing and fitting the new store will be funded from the combination of sale proceeds and store earnings during the transition demonstrating the Group's on-going ability to expand its operating footprint while retaining a strong balance sheet.  

Andrew Jacobs CEO of Lok'nStore said:

"We are delighted to have sold the site of our existing Reading store providing further momentum to our new store development plans.

"The new Reading store will add to our portfolio of large, modern, freehold purpose built self-storage centres across south-east England. These have proved resilient to the recession with occupancy rising strongly over the last financial year across our operations.

"Revenue and occupancy growth from our existing stores, combined with the opening of the new Crawley, Maidenhead and Aldershot stores over the next 12 months will take us to 25 trading stores. We are confident that this, along with our strong balance sheet will underpin the continued growth of the business."

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For further information: Lok'nStore	Tel: [phone]
Andrew Jacobs, CEO
Ray Davies, Finance Director
FTI Consulting	Tel: [phone]
Oliver Winters/ Latika Shah
Panmure Gordon & Co	Tel: [phone]
Corporate Finance: Dominic Morley/Fred Walsh  Corporate Broking: Charles Leigh-Pemberton

Notes to Editors

Lok'nStore runs a high quality portfolio of self-storage centres across the South East of England.  All stores carry the distinctive bright orange and silver livery and are located in prominent locations adjacent to main roads and town centres.  Lok'nStore recently opened a new store in Crawley and is due to open a store in Maidenhead before the year end and in Aldershot in 2014.

Following the above, Lok'nStore's self-storage business will be operating 25 stores from 12 freehold sites and 9 leasehold sites on its own account and 4 managed stores.

Lok'nStore recently announced its year-end results which reported strong occupancy growth performance of 10.4% and a 32% increase operating profits for the year to 31 July 2013. Net Asset value (NAV) rose by 8.8% to £2.48 pence per share.

The UK self-storage market remains undersupplied. There remains significant opportunity in the UK self-storage market where there are an estimated 830 self-storage facilities.  This equates to approximately 30.1 million square feet of storage space.  With a population of 62 million people in the UK, this equates to 0.5 square feet per person, compared to 7.5 square feet per person in the USA (2012 US Self-Storage Almanac).  

 

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