Big Yellow Group PLC (LON:BYG) has seen demand shift under the coronavirus pandemic, with business customers accounting for a much larger proportion as a the housing market freeze hit occupation levels among domestic customers.
Like-for-like revenue was up 1.9% in the three months to June 30, the first month of its financial year, but closing occupancy was down 40 basis points to 83.6%.
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Average achieved rents were up 3.7% on the same quarter last year, the FTSE 250 group said.
Move-ins were down 28% in the quarter, but move-outs were also down 32%, with In the month of June seeing total move-in and move-out activity both down around 15%.
Big Yellow said the increase in business demand as the initial lockdown was lifted was being driven by “online retailers, B2B traders looking for flexible mini-warehousing for e-fulfilment, the shortening of supply chains, and businesses looking to rationalise their other fixed costs of accommodation”.
Chief executive Jim Gibson said cash collection has been “relatively secure” and now broadly in line with last year.
“Although it is early in the second quarter, we are continuing to see an improvement in year-on-year occupancy growth.
“Significant economic uncertainty remains, and it should be noted that we have limited visibility in this business, with customers tending to reserve only a few weeks before moving in.”
Analysts at Liberum said: “Despite resilience, we do not think the business is immune to a material slowdown in wider economic activity. The macro backdrop is far from benign.”
Those at Peel Hunt noted revenue is running ahead of their forecast, “but we still think that there is potential for a turbulent period on the unwinding of the furlough scheme”.