Big Yellow sells Harrow industrial estate for €45m

UK self-storage company Big Yellow Storage has announced the sale of its industrial estate in Harrow, London, for £38.4 mln (€45 mln).

Big Yellow Self Storage

A £2 mln retention from the sale price is subject to certain conditions.

The company plans to use these proceeds to finance the construction of 11 new self-storage facilities and one replacement store, all on land already owned by the Group. These 12 pipeline stores are projected to generate a net operating income of £35 mln (€41 mln), representing an impressive 16.5% income return on the estimated total completion cost of £212 mln (€248 mln). The Board believes this investment offers superior long-term returns compared to other available capital uses.

This new store development will be funded within Big Yellow's existing financial arrangements. The Group anticipates maintaining a net debt to EBITDA ratio of 3.5x to 4x in the short to medium term, with a long-term goal of reaching the Board's preferred level of up to 3.5x. This strategy reflects the Board's conviction that the risks associated with higher debt levels outweigh potential rewards.

Big Yellow highlights its position as an operating platform with a high-quality store portfolio, built over 28 years. The Board and management remain committed to a thoughtful and disciplined approach to executing their strategy, including the development of these new stores, several of which are in prime Central London locations.