Big Yellow Group (LSE:BYG) sold its Harrow Industrial Estate for £38.4 million, subject to a £2 million retention of the sale price that will be released on the satisfaction of certain conditions.
On a pro forma basis the 12 pipeline stores, 11 new and one replacement, all on land owned by the group, are expected to generate £35.0 million of net operating income, representing an income return of 16.5% on the £212.0 million total cost to complete.
The proceeds will be deployed to fund the build-out of those 12 stores within the Group's existing funding arrangements.
It said development will be completed from existing facilities and it continues to forecast a net debt to EBITDA ratio of between 3.5x and 4x in the short to medium term, trending over time to the Board's preferred level of up to 3.5x.
The company noted several of the new stores are in key Central London locations and said management will remain thoughtful and disciplined in executing the its strategy.
"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 Board said.
