Big Yellow Group PLC (LON:BYG) is tapping up shareholders for £67mln as it looks to expand its portfolio of self-storage stores.
The FTSE 250 group has 11 new sites in its pipeline, six of which are in London, which it estimates will increase its lettable storage space by 15%.
All in, Big Yellow reckons it will cost just shy of £200mln to complete the development of these stores, although they should boost net operating income by £17.4mln a year once up and running.
READ: Big Yellow edging towards 90% occupancy target
No price has been set yet, but the company expects the cash to come from existing shareholders and new institutional investors, while board members are coughing up £265,000 of their own money.
The combination of building out the current pipeline and the placing will drag on earnings in the short term, but Big Yellow reassured investors that this will be more than offset by the “anticipated significant medium to long term accretion”.
Executive chairman Nicholas Vetch said: “This equity raise allows us to execute our next phase of growth through the acquisition of new development sites that will deliver medium-term earnings progression.”
“Our newly acquired site at Queensbury in London is the first of these and we continue to identify attractive locations for the Big Yellow brand.”
BYG shares edged 0.8% higher to 955p early on Wednesday morning.