An owner and operator of self storage units, Big Yellow is more akin to an operating business which just happens to use property as its underlying product.
The business model is simple: buy warehouses in locations convenient for people to travel to and convert the space into many storage units of varying size, each of which can be rented out for a diverse set of uses. Big Yellow holds c.30% of the London market in terms of capacity which, along with competitors, means that there isn’t much left to buy in London. This has pushed Big Yellow to expand into other urban areas outside of the M25.
For an indication of the resilience of the business, we need only look to 2007, when the business saw earnings per share (EPS) growth stay positive throughout the crisis. In good times or bad times, people need storage and Big Yellow don’t expect this to change. The question now, is whether Big Yellow can find buildings to feed its growth and continue its up until now successful expansion.
