Safestore seeing more make use of its facilities

safestore dismissed fears about tough economic conditions affecting its business, saying more people are using the self-storage retailer’s services even in a downturn.

The company, which generates much of its revenue from individuals moving houses, said it expected most of the demand coming from people refurbishing their homes, while modest growth was seen from its business customers.

“According to a survey, 78 per cent of people were more likely to refurbish than they were likely to move (especially in a tough economy). They will still need self storage facilities,” said chief executive Peter Gowers.

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“We also saw increasing share of business come from children moving in with their parents after university.”

However, the company said it was likely to see higher levels of vacancies in the next two quarters following strong occupancy growth in the third quarter when sales grew 5.4 per cent to £24.1m.

Overall occupancy level rose 3.8 per cent to 63.2 per cent, while average self storage rental rate for the quarter was 2.9 per cent higher at £25.91 per sq ft.

“Looking ahead, the fourth quarter is traditionally a weaker quarter for occupancy growth, in part owing to students returning to university,” said the company, whose peers include Big Yellow and Lok’n Stor.

Safestore, which has three sites in Leeds, said it continued to perform in line with expectations.

Last month, Big Yellow reported a 6 per cent rise in first-quarter revenue, but said it remained cautious.

“Well covered dividend yields and asset backing, which is now priced more reasonably in Big Yellow’s case and attractively in Safestore’s, means we see value in UK self storage,” Espirito Santo Investment Bank wrote in a note.