By Elena Vardon
Big Yellow Group said it intends to raise around 110 million pounds ($134.6 million) through a share placement to build out its store pipeline.
The U.K. self-storage company said Tuesday that the issue price of the placing–which is open to existing shareholders as well as institutional and retail investors–will be determined at the end of the accelerated bookbuilding process. It won’t exceed around 18.4 million shares, it added.
The projected net operating income from its expansion to 902,000 square feet is GBP30.4 million, when stabilized, the London-listed group said, adding that this represents a 13% return on incremental capital deployed.
Big Yellow Group said that of 13 pipeline sites, 11 are in or near London, which has outperformed recently.
“The net proceeds will allow us to expand capacity in London, our strongest market, and monetize land that we already own,” Executive Chairman Nicholas Vetch said, adding that the placing will also be marginally earnings accretive in the short term.
The company said that revenue for the six months ended Sept. 30 was up 6% on year, with its demand and revenue growth in London and the South East–which together make up three-fourths of its revenue–was stronger than its regional stores in the half-year period.
Write to Elena Vardon at [email protected]
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