Self-storage company Big Yellow Group has sold an industrial estate in Harrow for £38.4 million as part of plans to fund a major expansion programme across the UK.
The company said the sale is subject to a £2 million retention, which will be released once certain conditions have been met.
Big Yellow plans to use the money from the Harrow sale to help fund the construction of 11 new stores and one replacement store on land it already owns. The company said the 12-store pipeline is expected to generate £35 million in net operating income once completed.
In a statement, the company said: “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 planned developments are expected to cost around £212 million and generate an income return of 16.5 per cent.
Big Yellow added that the expansion programme will be completed using its existing funding arrangements and that it expects its debt levels to remain within target ranges. The company said: “This reflects the board’s long held view that the unwarranted risk from elevated levels of debt outweighs the potential rewards.”
The company also said: “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.”
The Harrow site forms part of the wider Harrow View East regeneration area on the former Kodak land in Wealdstone. Big Yellow acquired part of the development in 2019 and secured planning permission for a new self-storage facility and industrial units. Construction began in 2021, with the Harrow unit opening the following year.
The development was built on land that once formed part of the historic Kodak site, which was one of Harrow’s largest employers for more than a century before closing in 2016.
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