Ask a friend what springs to mind at the mention of ‘self storage’, and the chances are it will be a big, bright yellow building. This would doubtless belong to Big Yellow Group (BYG), the market leader in the billion pound UK self-storage industry, and a potentially mispriced quality Reit.
The premise of self-storage is simple. Individuals and businesses need somewhere to keep their stuff, and a nearby self-storage operator will supply them that space for a fee, normally on a rolling monthly basis. The reasons for doing so can vary from the intuitively obvious, such as moving house, to the more specific, such as the three Ds: death, divorce and decluttering. There are also small business customers, which account for around a third of Big Yellow’s occupied space.
Big Yellow bull points
Market leader focused on prime London and south-east England
Self-storage is an immature market
Strong management and value creation record