Lok'nStore upbeat on progress with property pipeline
By Josh White
Date: Wednesday 24 May 2023
(Sharecast News) - Self-storage operator Lok'nStore Group announced a series of transactions in a pipeline update on Wednesday, including the completion of a new 20-year lease for its existing store in Eastbourne.
The AIM-traded company said the lease included a tenant-only break clause after five years.
In addition, it said it had exchanged contracts for a new landmark managed store in Bromborough, Wirral.
The site, spanning 49,500 square feet, had already received planning permission, and would be owned by an existing managed store client.
Under Lok'nStore's managed store programme, the company would receive one-time fees for site acquisition, development guidance, and use of the Lok'nStore brand.
Once operational, Lok'nStore would then receive a recurring monthly management fee based on revenue and an additional recurring performance fee once agreed returns were achieved.
Construction was expected to start in the coming months, with the store expected to open in late 2024.
The board said the firm's landmark store development was progressing well, with four new stores set to open over the next 12 months.
It said the recently-opened landmark store in Bedford showed promising early trading performance.
At the same time, construction was underway at new landmark store locations in Peterborough, Staines, Basildon and Kettering.
Together, the developments would add 208,000 square feet of trading space to the undersupplied UK self-storage market.
With a secured pipeline of 11 new stores, Lok'nStore said it was expecting to operate a total of 52 stores once fully developed.
Of the 11 pipeline stores, six had already received planning permission, and four of those were currently under construction.
Additionally, the company said it had identified four additional sites that were now progressing with legal procedures, while numerous other opportunities were being explored.
The company said its trading momentum also remained strong, reporting that for the quarter through April, Lok'nStore recorded year-on-year revenue growth of 13.2%.
"Trading continues to be excellent with store revenue up 13.2% year on year in the quarter ended April," said the company's chair Andrew Jacobs.
"We continue to deliver on our objective of opening more landmark stores whilst maintaining the strength of our balance sheet and remaining conservatively geared."
Jacobs said the firm's secured pipeline was now 11 stores, which would add "considerable momentum" to earnings growth in the coming years, while the company was continually assessing more new sites.
"The transactions announced today, will add further value to the group, and demonstrates that Lok'nStore is well positioned to build and open more new stores in the under-supplied UK self-storage market."
At 1224 BST, shares in Lok'nStore Group were down 0.23% at 883p.
Reporting by Josh White for Sharecast.com.
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