26th Nov 2007 07:01
Big Yellow Group PLC26 November 2007 26 November 2007 Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company") £150 million Partnership to develop up to 25 stores in the Midlands, the North of England and Scotland Big Yellow Group PLC is pleased to announce the establishment of a £150minvestment partnership ("the Partnership") with funds managed by Pramerica RealEstate Investors ("Pramerica") to develop up to 25 stores in the Midlands, theNorth of England and Scotland. The Partnership will have a four-year exclusivityperiod on the defined territory. Big Yellow and Pramerica are investing up to £25 million and £50 millionrespectively into the Partnership, of which £4.5m and £9m respectively, will beinvested on 30 November 2007, the completion date. All further investments intothe Partnership by Big Yellow and Pramerica will be in the ratio of one thirdand two thirds respectively. A five year term non recourse loan of £75 million has been secured by thePartnership from the Royal Bank of Scotland PLC to provide investment anddevelopment funding. Big Yellow has initially agreed to sell five of its development sites togetherwith its existing store in Leeds to the Partnership. The consideration for thesites and the store to be transferred into the Partnership is £20.3 million incash, representing a small surplus on book value. Big Yellow has also enteredinto conditional contracts to sell two more of its development sites atManchester and Birmingham to the Partnership. In the case of Birmingham it isintended that Big Yellow will develop the store which will be transferred to thePartnership shortly prior to its completion at cost plus a small surplus. In thecase of Manchester, Big Yellow has previously entered into a conditionalagreement with Crosby Homes (North West) Limited, ("Crosby") for the developmentof a significant sized mixed use scheme to include the shell of an 80,000 sq ftself storage centre to be developed at the expense of Crosby. In the event thatthe conditions of that agreement are satisfied, then Big Yellow will fit out thestore at its own cost and shortly prior to its completion transfer the store, tothe Partnership at the then open market value. The initial proceeds to be received by Big Yellow from the sale of thedevelopment sites and the Leeds store to the Partnership will be used to furtherthe Group's southern UK business, and also to finance its contributions to thePartnership. For the year ending 31 March 2007, the profits before tax attributable to thedevelopment sites and the Leeds store being sold to the Partnership, amounted to£0.3 million. Big Yellow has further entered into agreements with the Partnership to provideboth development and operational management services on the initial sites andfuture sites and stores. In consideration for these services, Big Yellow willreceive certain acquisition, planning, construction management and operatingfees. Big Yellow has an option to purchase the assets contained within the Partnershipor the interest in the Partnership which it does not own exercisable from the 31March 2013. On exit whether by way of exercise of the options as set out aboveor a sale to a third party, Big Yellow is entitled to certain promotes, whichwould result in Big Yellow sharing in the surplus created in the partnership. The Board of the Partnership will comprise two representatives of both Pramericaand Big Yellow. James Gibson, Chief Executive Officer of Big Yellow comments: "We are very pleased to announce the formation of this Partnership withPramerica. We have enjoyed an excellent relationship with them over an eightyear period commencing with their investment in Big Yellow in 1999. Joining forces with this prestigious institution will allow us to continue toexpand with confidence into the northern part of the UK, whilst at the same timeimproving the financial performance of the group. Further it will release fundsfor deployment into the South of England where we expect to see moreopportunities in a less competitive property market. We expect that the partnership will have strong operating cash flow at the pointthat our option can be exercised in 2013". As previously announced, Big Yellow will announce interim results for the sixmonths ended 30th September 2007 on Tuesday 27th November, a briefing foranalysts will be held at 10.00am at the offices of Weber Shandwick Financial,Fox Court, 14 Gray's Inn Road, WC1. For further information, please contact: Big Yellow Group PLC 01276 477811Nicholas Vetch, ChairmanJames Gibson, Chief Executive Officer Weber Shandwick Financial 020 7067 0700Louise Robson/John Moriarty/Charlie Hooper Notes to Editors About Big YellowBig Yellow Group PLC is one of the leading and most dynamic self-storage groupsin the UK. It was founded in 1998 by Nicholas Vetch, Philip Burks and JamesGibson and listed on AIM in May 2000, moving to the Official List of the LondonStock Exchange in 2002. Big Yellow has expanded rapidly and now operates from 45 stores, 44 in Londonand the South, and one in Leeds, with a further 27 stores in development and ofthe 72, 61 are held freehold and three long leasehold (approximately 90%). Allthe stores have the distinct yellow branding, in accessible main road locations,with the majority being within the M25 or in strong urban conurbations. Whenfully built out the portfolio will provide approximately 4.5 million sq ft offlexible storage space. The Group has pioneered the development of the latest generation of self-storagefacilities, which utilise state of the art technology and are located in highprofile, main road locations. Its focus on the location and visibility of itsbuildings, coupled with excellent customer service, has created the mostrecognised brand name in the UK self-storage industry. About Pramerica Real Estate InvestorsPramerica Real Estate Investors' is the real estate investment management andadvisory business of Prudential Financial, Inc. of the United States (NYSE:PRU). Its specialised operating units offer a broad range of investmentopportunities and investment management services in the United States, Europe,Asia, and Latin America. The company's fund management operations, located inParsippany, N.J.; Atlanta, Ga.; Munich, London, Mexico City and Singapore, aresupported by a network of local offices throughout the world. As of June 30,2007, Pramerica Real Estate Investors managed $39.6 billion of gross assets($28.8 billion net) on behalf of more than 300 clients and is ranked among thelargest real estate investment managers. For more information, visitwww.pramericarei.com. About Pramerica FinancialPramerica Financial is a tradename used by Prudential Financial, Inc., a companyincorporated and with its principal place of business in the United States, andits affiliates in select countries outside the United States. PrudentialFinancial, Inc. (NYSE: PRU), a financial services leader with approximately $637billion of assets under management as of September 30, 2007, has operations inthe United States, Asia, Europe, and Latin America. Leveraging its heritage oflife insurance and asset management expertise, Prudential Financial is focusedon helping individual and institutional customers grow and protect their wealth.The company's well-known Rock symbol is an icon of strength, stability,expertise and innovation that has stood the test of time. Prudential Financial'sbusinesses offer a variety of products and services, including life insurance,annuities, retirement-related services, mutual funds, asset management, and realestate services. For more information, please visit www.prudential.com.Prudential Financial is not affiliated in any manner with Prudential plc, acompany incorporated in the United Kingdom. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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