Investment Rating - The report maintains a Neutral rating for Big Yellow (BYG.L) with a 12-month price target of 1,110p, implying a 12.5% upside from the current price of 987p [1][33]. Core Insights - Revenue growth is expected to decelerate due to a subdued demand environment, with occupancy forecasted to remain stable at around 80.3% to 81% for FY26E and FY27E [2][3]. - The company's balance sheet is strong, with a net debt to EBITDA ratio of 3.1x and a loan-to-value ratio of 12.8%, the lowest in the sector [3][4]. - Valuation appears fair, trading at a 6.3% earnings yield, above its long-term average of 4.6%, and at a 31% discount to net tangible assets (NTA) [4][28]. Revenue and Occupancy - Revenue growth is projected to slow, with occupancy rates expected to stabilize at 80.3% in FY26E and 81% in FY27E, compared to 79.1% in FY24/25 [2][36]. - The average rent achieved has declined to 3.2% year-on-year since its peak of 8.6% in FY23 [20][36]. Financial Performance - Adjusted EPS forecasts for FY26E to FY28E have been updated with a change of -2% for FY26E and a 0% change for FY27E [1][32]. - The forecasted total revenue for FY26E is £183.2 million, with a projected EBITDA of £133.9 million [14][36]. Development Pipeline - Big Yellow has a development pipeline of 14 sites, with 9 currently under construction, expected to generate a net operating income (NOI) of £36.6 million, yielding 8.7% [3][36]. Valuation Metrics - The report indicates that Big Yellow's valuation reflects both upside and downside risks, with a current earnings yield of 6.3% and a significant discount to NTA [4][28]. - The forecasted dividend yield is expected to increase from 4.2% in FY25 to 5.2% by FY28 [11][36].

Investment Rating - The report maintains a Neutral rating for Big Yellow (BYG.L) with a 12-month price target of 1,110p, implying a 12.5% upside from the current price of 987p [1]. Core Insights - Revenue growth is expected to decelerate, with occupancy forecasted to remain stable at around 80.3% to 81% for FY26E and FY27E, compared to 79.1% in FY24/25. Rate growth has moderated to 3.2% year-on-year, down from a peak of 8.6% [2][3]. - The balance sheet is solid, with a net debt to EBITDA ratio of 3.1x, an interest coverage ratio of 6.1x, and a loan-to-value ratio of 12.8%, the lowest in the sector. The development pipeline includes 14 sites, with 9 under construction, expected to generate a net operating income (NOI) of £36.6 million [3]. - Valuation appears fair, trading at a 6.3% earnings yield, above its long-term average of 4.6%, and at a 31% discount to net tangible assets (NTA), below its long-term average of 0% [4]. Revenue and Earnings Forecast - Revenue is projected to grow from £177.8 million in FY25 to £216.5 million in FY28, with adjusted EPS estimates for FY26E to FY28E showing minimal changes of 0% to -2% [1][14]. - The forecasted EPS for FY26E is 59.55p, with a dividend yield expected to increase from 4.2% in FY25 to 5.2% in FY28 [11][14]. Financial Metrics - The report highlights that the average net achieved rent per square foot has declined to 3.2% year-on-year, down from a peak of 8.6% [20]. - The company’s leverage is noted to be the lowest among its peers, with a net debt to property value ratio of 13% [22]. Market Context - The demand environment remains subdued, with forward demand indicators showing a 3% year-on-year decline in prospect numbers for FY24/25 and a decrease in Google searches for self-storage options [2][18]. - The broader UK economic context is characterized by low growth and global macroeconomic uncertainty, which may continue to impact occupancy and revenue growth [2][25].