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Big Yellow reports uptick in net rent as occupancy levels rise

By BFN News | 09:08 AM | Thursday 22 July, 2021

Big Yellow Group has reported improving growth in net rent per square foot over the past quarter as occupancy levels increase. In a trading update, the company said the growth in occupancy this quarter was significantly ahead of last year, which in itself was greater than the 125,000 sq ft growth delivered in 2019, following a strong recovery once restrictions began to ease in mid-May 2020. The group's average achieved net rent per sq ft increased by 2.7% compared to the same quarter last year, with closing net rent up 3.5% compared to 30 June 2020. The company saw strong demand from domestic customers in the quarter, in part due to the stamp duty holiday tapering off from 1 July. This, it said, resulted in an acceleration of housing-related demand in June. Some of this occupancy growth from both the housing and student sectors is relatively short term, and Big Yellow expects the current quarter to be impacted by these customers moving out. In addition, there will be customers who sold their properties several months ago, who have now successfully acquired a new property prior to the 30 June deadline and have moved out in early July. There has been an increase in move-outs in July to date above normal levels, although this is now normalising, with current notices to move out in line with 2019, and reservations building again. The current like-for-like occupancy of the Big Yellow portfolio is 91.0%. The group's like-for-like store revenue increased by 13.8% compared to the same quarter last year, mostly driven by occupancy growth, but with a contribution from year-on-year growth in average net rent and ancillary sales. Jim Gibson, CEO of Big Yellow Group, said: 'We would caution that this is during our normally strong summer trading period, short term uncertainties remain, and we do expect a return to more normal seasonal trading patterns over the remainder of the year. 'We successfully raised £100 million from our shareholders by way of a placing in June, which allowed us to continue to invest in future growth through the recent strategic acquisitions. These, along with our existing development pipeline, have the potential to generate in excess of £40 million of net operating income over the short to medium term, and in so doing create significant value for our shareholders.' Story provided by

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