Disposal of Harrow Estate and use of proceeds

Big Yellow announces that it has sold its industrial estate in Harrow, London for £38.4 million, subject to a £2 million retention from the sale price which will be released on the satisfaction of certain conditions.

The Board of Big Yellow takes this opportunity to restate its capital allocation strategy.

The proceeds from the disposal will be used to fund the build out of 11 new stores and one replacement store in the development pipeline on land owned by the Group. On a proforma basis, the 12 pipeline stores are expected to generate £35 million net operating income, representing an income return of 16.5% on the £212 million total cost to complete.

The Board believes that currently there is no other use for the capital that comes close to delivering this level of long term returns.

The new store development will be completed within the Group's existing funding arrangements. The Group continues to forecast a net debt to EBITDA ratio of between 3.5x and 4x over the short to medium term, trending over time to the Board's preferred level of up to 3.5x. This reflects the Board's long held view that the unwarranted risk from elevated levels of debt outweighs the potential rewards.

Big Yellow is an operating platform trading from arguably the highest quality store portfolio in its sector, assembled selectively over the past 28 years.

The Board and management will remain thoughtful and disciplined in executing the Group's strategy, including the delivery of the new stores, several of which are in key Central London locations.