Big Yellow Group PLC on Tuesday launched a £110 million fundraise as it seeks to press on with the build-out of its existing store pipeline.
The Surrey, England-based self-storage facilities operator said it would raise funds via a placing to both existing shareholders and new institutional investors, plus a separate retail offer via the PrimaryBid platform.
In May 2022, the firm suspended construction on all projects that were not already on site because conditions were unfavourable. Those conditions have improved considerably. it said.
It intends to press on with the construction of an initial six sites including Farnham Road, Slough, Wapping, Wembley, Queensbury, Staines, and Slough Bath Road, all of which have planning consent at an incremental cost of £90 million. Construction will then follow on the remaining owned sites at a further incremental cost of £147 million.
Big Yellow said the projected net operating income of the increase in total capacity of 902,000 square feet is £30.4 million.
It explained the placing will be marginally earnings accretive in the short term and is expected to be significantly so over the medium to long term.
Net debt stands at £498.2 million, and the firm said the placing would allow it build out its sites with planning without increasing absolute levels of debt. Further funding should come from the sale of surplus land and property of around £90 million over the next 18 months, in addition to retained cash flow.
Directors are expected to participate in the placing with an aggregate subscription amount of £2.85 million.
Big Yellow also updated on current trading for the six months ended September. Revenue rose 6% in the period, with storage income up 7%, offset by lower growth in non-storage income. The average occupied space for the period was down 1% from last year, with average rate growth of 8%.
It said demand and revenue growth in London and the South East, representing 74% of revenue, has been stronger than that of regional stores.
Shares in Big Yellow closed up 0.4% at 968.50 pence in London on Tuesday.
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