Big Yellow occupancy falls, but rents improve

14th Jan 2014 07:49

- Occupancy down 2.8 per cent q/q, up y/y- Rents rise 4.4 per cent year to date- CEO confident about housing outlookSelf storage operator Big Yellow reported a dip in occupancy in its third quarter, partially offset by an increase in rental yields since the start of the financial year.Occupancy fell by 96,000 square foot (sq ft) over the three months to December 31st 2013, a decrease of 2.8% of maximum lettable area (MLA) in what Big Yellow labelled as a "seasonally weaker quarter". Closing occupancy was 2.315sq ft, representing 67.7% of total capacity which was up from 63.3% at the same time the previous year but down from 70.5% at the end of its second half."The loss of occupancy in the group this quarter is in the normal range of 2% to 3% (albeit at the higher end of the range) of MLA and an improvement on last year's 4.1%," said Chief Executive Officer James Gibson.However, net rent per sq ft over its 54 wholly owned stores was £25.83, up 4.4% since the start of the financial year (March 31st 2013).Total store revenue for the 54 stores was £17.9m during the quarter, up 6.5% year-on-year but down 2.7% from the second quarter."We have previously articulated a more optimistic view on prospects for trading, and current performance would appear to bear that out, although we do expect improvements to be incremental," Gibson said.He also pointed that a "significant number" of large-scale residential developments are currently being announced, which is likely to fuel housing activity and, in turn, demand for self storage.The stock was 0.77% lower at 488.1p in early trading on Tuesday.BC