Big Yellow, the listed self-storage company, is raising £36.4m of new equity to part-fund the cost of converting into a REIT
The company announced this morning that it was issuing 9.1 million new shares at 400p each. A quarter of the new money will be used to pay for the approximate £9.5m cost of converting into a REIT next year, which is equivalent to 2% of its gross assets, which at 31 March were £475m.
Chairman Nick Vetch revealed in May – on the day the annual results were revealed – that the company ‘was minded to convert to a REIT’.
He said today that in order to comply with the requirements for REITs, an internal reorganisation of the assets would need to be carried out.
The rest of the money raised will be used to acquire new sites and roll out self-storage centres.
The company opened 34 stores between the time of its flotation in May 2000 and 30 June 2006, and has a further 19 sites under development. It acquired 10 sites in the year to 31 March 2006 and has already secured a further five in the current financial year.
‘The build-out of the sites that are owned or controlled by the group will involve further capital expenditure of £128m over the next three years,’ said Vetch.