Acquisition of sites by Big Y
25 June 2008
Big Yellow Group PLC
("Big Yellow", "the Group" or "the Company")
Acquisition of five sites by Big Yellow Limited Partnership
Big Yellow Group PLC is pleased to announce that it has reached agreement with Big Yellow Limited Partnership (the "Partnership"), a venture with Pramerica Real Estate Investors Limited, in which it has a 33.3% stake, to sell four additional sites to the Partnership. These development sites are in Camberley, High Wycombe, Poole and Reading (the "Additional Development Sites"), and will provide additional self storage space for the Partnership of 235,000 sq ft. The 53,000 sq ft store planned at Poole has received planning consent, and negotiations are in progress with the planning authorities in respect of the other three sites. The Partnership has also recently exchanged contracts with a third party to acquire a prominent site in Stockport, Greater Manchester. This site, for the development of a 60,000 sq ft self storage centre, is part of a 15 acre new mixed commercial scheme, overlooking the M60 orbital motorway.
Contracts have been exchanged for the sale of the Additional Development Sites to the Partnership, and completion is expected to take place on or before 11 July 2008.
In addition to the Additional Development Sites, the Group has agreed that the next seven sites acquired by the Partnership can include sites outside the M25 as well as the area of the Midlands and the North. Thereafter, any additional sites in the Partnership will only be in the Midlands and the North.
The consideration for the portfolio comprising the Additional Development Sites is £14.9 million in cash, being the aggregate book value of the Additional Development Sites. Big Yellow will re-invest £4.5 million of the consideration as its equity contribution giving a net cash receipt of £10.4 million.
The proceeds to be received by Big Yellow from the sale of the Additional Development Sites will be used to further the Group's core London business, and also to finance its contributions to the Partnership.
For the year ended 31 March 2008, the profits before tax attributable to the Additional Development Sites amounted to £0.1 million. This net income arises from an existing tenant at High Wycombe.
These transactions increase the number of sites in the Partnership to 12, of which one is open, and a further six have been granted planning permission. In addition the Partnership has a conditional contract with the Group to acquire a site in Manchester. In the event that the conditions of that agreement are satisfied, then Big Yellow will fit-out the store at its own cost and, shortly prior to its completion, transfer the store to the Partnership at the then open market value.
The total expenditure to date on the eleven sites under development in the Partnership (including the Additional Development Sites but excluding Manchester) is £29 million, with estimated further costs to completion of approximately £74 million.
Big Yellow has previously entered into agreements with the Partnership to provide both development and operational management services on sites and stores. In consideration for these services, Big Yellow will receive certain acquisition, planning, construction management and operating fees.
Big Yellow has an option to purchase the assets contained within the Partnership or the interest in the Partnership which it does not own exercisable from the 31 March 2013. On exit whether by way of exercise of the options as set out above or a sale to a third party, Big Yellow is entitled to certain promotes, which would result in Big Yellow sharing in the surplus created in the partnership.
James Gibson, Chief Executive Officer of Big Yellow comments:
"We are very pleased to announce the sale of these four sites to our Partnership with Pramerica. This allows us to continue to expand with confidence throughout the UK, whilst at the same time improving the financial performance of the group.
The site in Stockport is in a prominent location, adjacent to the M60 motorway, and reflects the Partnership's strategy of acquiring high class sites in areas where the drivers for self storage are strong."
Big Yellow will announce its interim management statement for the quarter ending 30 June 2008 on Wednesday 9 July, coinciding with the date of our Annual General Meeting.
For further information, please contact:
Big Yellow Group PLC 01276 477811
Nicholas Vetch, Chairman
James Gibson, Chief Executive Officer
Weber Shandwick Financial 020 7067 0700
Louise Robson/John Moriarty
Notes to Editors
About Big Yellow
Big Yellow Group PLC is one of the leading and most dynamic self-storage groups in the UK. It was founded in 1998 by Nicholas Vetch, Philip Burks and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in 2002.
Big Yellow has expanded rapidly and now operates (both directly and within Big Yellow Limited Partnership) from 49 stores, 48 in London and the South, and one in Leeds, with a further 22 stores in development and of the 71, 61 are held freehold and three long leasehold, together representing more than 90% of the portfolio. All the stores have the distinct yellow branding, in accessible main road locations, with the majority being within the M25 or in strong urban conurbations. When fully built out the portfolio will provide approximately 4.6 million sq ft of flexible storage space.
The Group has pioneered the development of the latest generation of self-storage facilities, which utilise state of the art technology and are located in high profile, main road locations. Its focus on the location and visibility of its buildings, coupled with excellent customer service, has created the most recognised brand name in the UK self-storage industry.
About Pramerica Real Estate Investors
Pramerica Real Estate Investors' is the real estate investment management and advisory business of Prudential Financial, Inc. of the United States (NYSE: PRU). Its specialised operating units offer a broad range of investment opportunities and investment management services in the United States, Europe, Asia, and Latin America. The company's fund management operations, located in Parsippany, N.J.; Atlanta, Ga.; Munich, London, Mexico City and Singapore, are supported by a network of local offices throughout the world. As of March 31, 2008, Pramerica Real Estate Investors managed $45.1 billion of gross assets ($31.5 billion net) on behalf of more than 400 clients and is ranked among the largest real estate investment managers. For more information, visit www.pramericarei.com.
About Pramerica Financial
Pramerica Financial is a tradename used by Prudential Financial, Inc., a company incorporated and with its principal place of business in the United States, and its affiliates in select countries outside the United States. Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $631.1 billion of assets under management as of March 31, 2008, has operations in the United States, Asia, Europe, and Latin America. Leveraging its heritage of life insurance and asset management expertise, Prudential Financial is focused on helping individual and institutional customers grow and protect their wealth. The company's well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. Prudential Financial's businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, asset management, and real estate services. For more information, please visit www.prudential.com. Prudential Financial is not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom.
This information is provided by RNS
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